1 IN HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS 9TH DAY OF JUNE 2020 PRESENT HON BLE MR. JUSTICE ALOK ARADHE AND HON BLE MR. JUSTICE HEMANT CHANDANGOUDAR I.T.A. NO.139 OF 2011 BETWEEN 1. COMMISSIONER OF INCOME TAX C R BUILDING, QUEENS ROAD, BANGALORE 2. ASST. COMMISSIONER OF INCOME TAX CIRCLE - 11(3) C R BUILDING, QUEENS ROAD, BANGALORE. APPELLANTS (BY SRI K V ARAVIND, ADV.) AND M/S JSW STEEL LIMITED (FORMERLY KNOWN AS JINDAL VIJAYANAGAR STEEL LIMITED ) JINDAL MANSION, 5A, DR G DESHMUKH MARG, MUMBAI 400026.RESPONDENT (BY SRI A.SHANKAR, SENIOR ADVOCATE FOR SRI M LAVA, ADV.) 2 THIS ITA IS FILED UNDER SECTION.260-A OF I.T.ACT, 1961 ARISING OUT OF ORDER DATED 10-12-2010 PASSED IN ITA NO.929/BANG/2009, FOR ASSESSMENT YEAR 2003-2004, PRAYING TO: I. FORMULATE SUBSTANTIAL QUESTIONS OF LAW STATED THEREIN, II. ALLOW APPEAL AND SET ASIDE ORDERS PASSED BY ITAT, BANGALORE IN ITA NO.929/BANG/2009 DATED 10-12-2010 AND CONFIRM ORDER OF APPELLATE COMMISSIONER CONFIRMING ORDER PASSED BY ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-11(3), BANGALORE, IN INTEREST OF JUSTICE AND EQUITY. THIS ITA COMING ON FOR FINAL HEARING, THIS DAY, ALOK ARADHE J., DELIVERED FOLLOWING: JUDGMENT This appeal under Section 260A of Income Tax Act, 1961 (hereinafter referred to as Act , for short) has been filed by revenue. subject matter of appeal pertains to Assessment year 2003-04. appeal was admitted by Bench of this Court vide order dated 24.11.2011 on following substantial questions of law: 3 a) Whether finding of appellate authorities that sum of Rs.211,57,21,643/- conversion of interest payable to financial institutions, banks into 10% redeemable preference shares would amount to allowable revenue expenditure when same is not actually paid, is perverse and arbitrary as payments have not been made and contrary to explanation 3C to Section 43B of Act? b) Whether finding of appellate authorities that sum of Rs.1,89,40,966/- while allowable as expenditure when said interest had been written off, is perverse and arbitrary? 2. Facts giving rise to filing of this appeal briefly stated are that assessee is carrying on business of manufacture and sale of pellets hot rolled coils, sheets and plates. assessee filed return of income declaring loss in respect of 4 Assessment year 2003-04. assessee claimed sum of Rs.211.57 Crores restructuring package as deduction and further claimed sum of Rs.1,89,40,966/- as interest written off. assessing officer by order dated 24.03.2006, disallowed claim for restructuring package as deduction and it was further held that if interest component was written off then question of allowing deduction of principal as expenditure did not arise. Commissioner of Income Tax (Appeals) partly allowed appeal. Being aggrieved, revenue preferred appeal. tribunal by order dated 10.12.2010 dismissed appeal preferred by revenue. 3. We have heard learned counsel for parties. Learned senior counsel for assessee submitted that substantial question of law No.2 5 framed in this appeal is squarely covered by decision rendered by division bench of this Court in ITA No.150/2003 dated 17.08.2011 which is answered against revenue. aforesaid statement could not be disputed by learned counsel for revenue. 4. Similarly, learned senior counsel for assessee submitted that substantial question of law No.1 is covered by decisions of this court as well as Delhi High Court in case of KIRLOSKAR ELECTRIC CO. LTD VS. CIT , 228 ITR 674 (KAR), COMMISSIONER OF INCOME TAX V. RATHI GRAPHICS TECHNOLOGIES LTD , 378 ITR 107 (DELHI) and answered against revenue. Learned counsel for revenue was unable to dispute aforesaid submissions as well. 6 5. For reasons assigned in aforesaid judgments, substantial questions of law framed by bench of this court are answered against revenue. In result, appeal is dismissed. Sd/- JUDGE Sd/- JUDGE ss Commissioner of Income-tax, Bangalore / Asst. Commissioner of Income-tax Circle 11(3), Bangalore v. JSW Steel Limited (Formerly Known as Jindal Vijayanagar Steel Limited)