TMI Blog2006 (12) TMI 499X X X X Extracts X X X X X X X X Extracts X X X X ..... ter referring to other judgments and in absence of any direct judgment of the Hon ble Supreme Court in New Jehangir Vakil Mills Co. Ltd. v. CIT [ 1963 (4) TMI 60 - SUPREME COURT] , we are of the view that the earlier order of this Court dismissing appeal of the revenue in limine cannot be taken to be conclusive. Thus, we partly allow this appeal in relation to question No. 1 and set aside the finding of the Tribunal and uphold the order of the Assessing Officer. As far as other issues are concerned, the appeal is dismissed. - ADARSH KUMAR GOEL AND RAJESH BINDAL, JJ. For the Appellant : Dr. N.L. Sharda For the Respondent : Pankaj Jain ORDER 1. This appeal has been preferred by Revenue against the order dt. 23rd Sept., 2004 of Tribunal, Chandigarh Bench 'A', Chandigarh passed in ITA Nos. 1221/Chd/1998 and 1034/Chd/1999 in respect of the asst. yr. 1995-96, proposing the following substantial questions of law: (i) Whether, on the facts and circumstances of the case, the Tribunal was right in law in deleting the addition made on account of interest on interest-free loans advanced by the assessee company to its subsidiary and associate companies in wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e as under: Re. Question No. (i): Learned Counsel for the assessee submits that the Tribunal has followed its own decision in the case of the assessee for the earlier assessment years, which view has also been upheld by this Court vide order dt. 28th March, 2006 in ITA No. 88 of 2004, CIT v. Industrial Cables (P) Ltd. on the ground that the Tribunal had only followed its view in the case of the assessee, which had become final. Learned Counsel for the Revenue pointed out that subsequently, this Court had examined the matter in great detail in its judgment in CIT v. Abhishek Industries Ltd. and after noticing different view points on the issue, respectfully disagreed with the view taken by Delhi High Court in CIT v. Tin Box Co. [2003] 260 ITR 637(Delhi) and CIT v. Orissa Cement Ltd. [2001]252 ITR 878(Delhi) , Allahabad High Court in CIT v. Radico Khaitan Ltd. [2005] 274 ITR 354(All) and CIT v. Prem Heavy Engineering Works (P) Ltd. (2006) 150 Taxman 90 , Calcutta High Court in CIT v. Britannia Industries Ltd. [2006]280 ITR 525(Cal) Madras High Court in R.D. Joshi Co. v. CIT [2001] 251 ITR 332(MP) and inter alia concurred with the view taken by Madras High Court in K. Som ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... business, that have the colour of business receipts and have no separate identification. Sources has no concern whatsoever. The only thing sufficient to disallow the interest paid on the borrowing to the extent the amount is lent to sister-concern without carrying any interest for non-business purposes would be that the assessee has some loans or other interest bearing debts to be repaid. In case the assessee had some surplus amount which, according to it, could not be repaid prematurely to any financial institution, still the same is either required to be circulated and utilised for the purpose of business or to be invested in a manner in which it generates income and not that it is diverted towards sister-concern free of interest. This would result in not presenting true and correct picture of the accounts of the assessee as at the cost being incurred by the assessee, the sister-concern would be enjoying the benefits thereof. It cannot possibly be held that the funds to the extent diverted to sister-concerns or other persons free of interest were required by the assessee for the purpose of its business and loans to that extent were required to be raised. We do not subscribe to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laid down in New Jehangir Vakil Mills Co. Ltd. v. CIT [1963] 49 ITR 137(SC) , wherein, the Hon'ble Supreme Court referring to Privy Council judgment in Hoystead v. Commissioner of Taxation (1926) AC 155 and its earlier judgment in Instalment Supply (P) Ltd. v. Union of India [1962]2SCR644, observed as under: ... As to the decision in Hoystead's case it was stated: Their Lordships are of opinion that it is impossible for them to treat Hoystead's case as constituting a legal authority on the question of estoppels in respect of successive years of tax assessment. So to treat it would bring it into direct conflict with the contemporaneous decision in the Broken Hill case; and to follow it would involve preferring a decision in which the particular point was either assumed without argument or not noticed to a decision, in itself consistent with much other authority, in which the point was explicitly raised and explicitly determined. In Instalment Supply (P) Ltd. v. Union of India, the Court referred to the decisions just mentioned and said that it was well settled that in matters of taxation there would be no question of res judicata. In view of above, question ..... X X X X Extracts X X X X X X X X Extracts X X X X
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