2005 (2) TMI 15

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..... ce, sought for its deduction. A return claiming similar losses was also filed for the assessment year 1993-94. The Assessing Officer processed the returns filed by the appellant under section 143(1)(a) of the Income-tax Act, 1961 ("the Act") and disallowed the deduction of Rs. 1,48,38,263.88 claimed by the appellant on account of interest payable to the creditors. He also imposed a penal additional tax of Rs. 11,62,502 under section 143(1A) of the Act. Being aggrieved by the said order of assessment the appellant preferred an appeal before the Commissioner of Income-tax (Appeals), Rohtak. The said appeal filed by the appellant came to be allowed. The said order of the Appellate Commissioner was challenged by the Revenue before the Income-ta .....

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..... n by it were all from IFCI, IDBI, ICICI and Harcoo Bank and under the Act interest payable to these banks are entitled to deduction. It was contended that clause (e) of section 43B will have no application as the said provision was introduced by the Finance (No. 2) Act, 1996 with effect from April 1, 1997. Learned counsel for the appellant also argued that in view of the fact that it had succeeded before the Commissioner of Income-tax (Appeals) on other grounds there was no need for it to have challenged the levy of additional tax. Learned counsel also argued that the appellant had specifically raised a ground as to the non-applicability of section 143(1A) and the consequent demand made for payment of additional tax, but the High Court with .....

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..... d the records we think there was some confusion in the mind of the Tribunal when it proceeded to consider the case of the appellant for deduction on a ground that the loan in question was taken from HFC which is a bank contemplated under section 43B(d) and since the appellant contends that it has material to show that the loan taken by it and the interest payable to institutions which would not fall within clause (d) of section 43B, in the interest of justice we think an opportunity should be given to the appellant to prove its case. We also think that since the Tribunal or the High Court have not taken into consideration the contention of the appellant in regard to the liability to pay additional tax under section 143 (1A) of the Act, an o .....

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