TMI Blog2012 (1) TMI 35X X X X Extracts X X X X X X X X Extracts X X X X ..... ions of the Income Tax Act, be it even the provisions of section 43B. Though u/s 43B, the A.O. may not have any discretion to allow any deduction in respect of interest payable, it is the case of the revenue that by virtue of the provisions of section 32 of SICA, the assessee, who has taken over the sick industry, would have the benefit of the provisions of the scheme. Therefore, the substantial question of law is answered in the negative i.e. against the revenue. - 519 and 521 of 2005 - - - Dated:- 4-1-2012 - Mr.Justice D.MURUGESAN, Mr.Justice P.P.S.JANARTHANA RAJA, JJ. For Appellant : Mr.T.Ravikumar For Respondent: Mr.Philip George COMMON JUDGMENT D.MURUGESAN, J., These Tax Case Appeals are directed at the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 dated 31.08.1990, allowed the appeals, giving rise to the cause for these two appeals at the instance of the revenue. 5. Based on the substantial question of law, two issues arise for consideration. Firstly, whether the circulars of the Board in No.523 and 576 are applicable to the facts of the case? Secondly, whether the provisions of section 32 of SICA would override the effect on the provisions of section 43B of the Income Tax Act ? 6. As far as the said two circulars are concerned, having noticed that section 17(3) of SICA excluded the application of sections 41(1), 79 and 115J of the Income Tax Act, in respect of specified assessment years, in the said circulars No.523 dated 05.10.1988 and 576 dated 31.08.1990, it was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... virtue of the provisions under section 32 of SICA, the scheme will have overriding effect on the provisions of the section 43B of the Income Tax Act. For consideration of the said issue, it may be pointed out that in para 4.2.4 of the Rehabilitation Scheme formulated by the Board in its order dated 14.11.1990, observed that the income tax authorities may consider allowing deduction under section 43B of interest 'payable' by M/s.Press Metal Corporation to banks and financial institutions even though they have not been paid during the year. 9. Though the assessing officer has referred to the above in the scheme, he was of the view that section 43B does not give any discretion to the assessing officer to allow any deduction in respect of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (2) Where there has been under any scheme under this Act an amalgamation of a sick industrial company with another company, the provisions of section 72-A of the Income-tax Act, 1961 (43 of 1961), shall, subject to the modifications that the power of the Central Government under that section may be exercised by the Board without any recommendation by the specified authority referred to in that section, apply in relation to such amalgamation as they apply in relation to the amalgamation of a company owning an industrial undertaking with another company". 11. A reading of sub-section (1) of Section 32 shows that the provisions of the SICA and or any rules or schemes made thereunder shall have effect notwithstanding anything inconsisten ..... X X X X Extracts X X X X X X X X Extracts X X X X
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