2004 (7) TMI 89 - HC - Income Tax

Summary

Issues:
- Disallowance of deduction under section 32AB of the Income-tax Act for the assessment years 1989-90 and 1990-91.
- Challenge of disallowance under section 32AB through additional ground of appeal.
- Applicability of Supreme Court judgment in CIT v. N.C. Budharaja and Co. [1993] 204 ITR 412.

Analysis:
The High Court judgment addressed two appeals, I.T.A. Nos. 8 and 9 of 2003, concerning the disallowance of deduction under section 32AB of the Income-tax Act for the assessment years 1989-90 and 1990-91. The appellant, a company engaged in building contracts, contested the disallowance by the Assessing Officer due to the absence of manufacturing activity. The Commissioner of Income-tax (Appeals) upheld the disallowance, prompting the appellant to appeal before the Tribunal. However, the Tribunal rejected the appellant's challenge under section 32AB, citing the precedent set by the Supreme Court in CIT v. N.C. Budharaja and Co. [1993] 204 ITR 412.

The appellant sought to challenge the disallowance under section 32AB through an additional ground of appeal before the Tribunal. Nevertheless, the Tribunal dismissed this ground, emphasizing the binding nature of the Supreme Court judgment in CIT v. N.C. Budharaja and Co. [1993] 204 ITR 412. The appellant's counsel failed to present any conflicting Supreme Court rulings, leading the High Court to conclude that no substantial question of law merited consideration. Consequently, the High Court dismissed the appeals, affirming the applicability of the Supreme Court's precedent in the matter at hand.