TMI Blog2004 (9) TMI 289X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 for asst. yr. 1993-94 which is common for all the three appeals/assessment year and is with respect to allowance of assessee's claim under s. 80-IA of the Act by the CIT(A). 4. The facts relating to this issue and as have been borne from the records are that the assessee, admittedly, was carrying on the business of rolling mill at Jhansi and of ship breaking at Bhavnagar. 5. Since it had carried on business of ship breaking during the previous years relevant to asst. yrs. 1993-94, 1995-96 and 1996-97 had claimed deduction under s. 80-IA of the IT Act. However, the AO rejected the assessee's claim for all the three assessment years. 6. On appeal by the assessee, the learned CIT(A) allowed the assessee's claim of deduction under s. 80IA from the income earned from the business of ship breaking. This issue was considered/discussed by the learned CIT(A) in great length while deciding assessee's appeal for asst. yr. 1995-96 paras 1.2 to 1.25, which has been followed in asst. yr. 1993-94 as well as in asst. yr. 1996-97. 7. It was in view of above facts and circumstances of the case that the learned senior Departmental Representative objected to the order of the CIT(A) by s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt and the decision of Bombay High Court being favourable to the assessee, the Tribunal should follow the decision of Hon'ble High Court of Bombay in case of Ship Scrap Traders and confirm the orders of the CIT(A). 9. We have heard the rival submissions, facts and circumstances of the case and decisions of both Hon'ble High Courts of Bombay and High Court of Gujarat on the point of admissibility of deduction under s. 80-IA, which is in parameter with the provisions of ss. 80HH and 80-I with utmost care. We have also considered the proposition of law with respect to binding nature of precedent as well as judicial proprietary relating to following a precedent. 10. After carefully considering the totality of the facts and circumstances of the case, we are of the opinion that the decision to the issue involved in this ground of the Revenue is dependent on the answer to the question as to whether, where there are conflicting decisions of different High Courts, none of which is jurisdictional High Court, the decision, which is favourable to the assessee, should be followed or the later decision, which is against the assessee, should be followed by the Tribunal or subordinate Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bunal decided the appeal, there existed two High Court decisions, one upholding the validity of s. 24(1)(c) and the other striking it down. That being so, neither of the two decisions was binding on the Tribunal as such." 11. After having considered the aforesaid decisions of Hon'ble Bombay High Court which are an authority with respect to the binding nature of precedent, we, first of all are of the opinion that the assessee being stationed at Jhansi (UP), within the territorial jurisdiction of Hon'ble High Court of Allahabad, and the decision relied upon by the learned Departmental Representative and by the assessee being conflicting and of different two High Courts (High Courts other than the jurisdictional High Courts), none of these decision is binding on the subordinate Court/Tribunal situated within the territorial jurisdiction of Allahabad High Court. 12. Further we, in view of decision of Bombay High Court in case of Siemens India Ltd. are of the opinion that the decision of Bombay High Court, though is of earlier date and has been dissented from by the Hon'ble High Court of Gujarat, being favourable to the assessee should be followed. Consequently, we, in view of dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lted the production of such items can be taken as manufacturing or producing of these by-products. 15. In view of above totality of the facts and circumstances of the case, we do not find any reason to interfere with the orders of CIT(A) allowing assessee's claim of deduction under s. 80-I of the Act and, therefore, the Revenue's grounds for all the three years are rejected. 16. Ground No. 2 for asst. yr. 1993-94 taken by the Revenue reads as under : "That the learned CIT(A) has erred in law and on facts in deleting the addition of Rs. 30,000 made by the AO on the grounds that this amount was even not received but credited in the books under another head." 17. We have heard the parties. 18. The facts relating to the issue involved in this ground, which are relevant for disposal of the appeals and as have been revealed from the record are that during the course of assessment proceeding it was noticed that the appellant was purchasing gas cylinders from Gujarat Ship Breaking Association at certain fixed price but later on the Association allowed credit out of purchase amounts and as per letter dt. 29th March, 1993, informed the assessee that it was allowing the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent years, are that the AO had noticed that assessee had advanced certain loans to partners/family members but had not charged interest. The AO therefore considered the interest bearing loans to that extent as having not being utilised for assessee's business and consequently disallowed interest of Rs. 1,79,029 in asst. yr. 1993-94 and interest of Rs. 1,77,736 in asst. yr. 1995-96. 27. On appeal by the assessee, the CIT(A) deleted the addition in asst. yr. 1993-94 as per para 5.2 of the order by observing that the directions given in assessee's case in asst. yr. 1995-96 may be followed. In asst. yr. 1996-97 this issue was decided as per para 2.9 of the appellate order wherein the disallowance of interest was deleted by following the appellate order in assessee's own case for asst. yr. 1994-95 dt. 22nd Aug., 1997. While discussing this issue, the CIT(A) had relied on the assessee's submission that interest-free loans given by the assessee were out of interest-free deposits. There was no nexus between the interest-free loans given and interest bearing loans taken and that the loans to the partners were for construction of a building, which was being used for assessee's business al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Steel Sales Agency at P-17, Industrial Estate, Gwalior Road, Jhansi was also searched without there being any search warrant and Panchnama was prepared in assessee's name. The stock found at this premises amounting to Rs. 60,000 was considered as assessee's stock and was added to its income. The assessee's case was that this stock belonged to Steel Sales Agency and even otherwise was covered by the disclosure having been made by the assessee during the search on account of unaccounted stock. The CIT(A) deleted the addition considering the same to be against the principles of natural justice because Revenue had not carried on necessary verification with respect to the assessee's claim. 38. Since the learned Departmental Representative has not disputed the finding of the CIT(A) which are based on facts, we do not find any merit in revenue's ground and, therefore, the same is rejected. 39. Ground No. 4 for asst. yr. 1995-96. 40. In this ground the Revenue has objected to the order of CIT(A) wherein the addition of Rs. 55,000 having been made on account of entries on loose papers Annex. A-1/84 found in the premises of Arun Kumar Jain. The CIT(A) has simply directed the AO ..... X X X X Extracts X X X X X X X X Extracts X X X X
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