2014 (3) TMI 1176 - HC - Income Tax

Deduction u/s 35D - HELD THAT - Appeal is ADMITTED on the following substantial questions of law (a) Whether on the facts and in the circumstances of the case and in law the Tribunal was right in not following the decision of the jurisdictional High Court in the case of Commissioner of Income Tax v/s Emirates Commercial Bank 2003 (4) TMI 2 - BOMBAY HIGH COURT ? (b) Whether on the facts and in the circumstances of the case and in law the Tribunal was right in holding that the Appellant is not an industrial undertaking so as to be entitled to deduction under Section 35D of the Income Tax Act 1961? (c) Whether on the facts and in the circumstances of the case and in law the Tribunal was right in holding that the omission of the word industrial by the Finance Act 2008 is prospective and therefore would not apply for the Assessment Year 20062007?

Summary

Issues:
1. Interpretation of Section 35B of the Income Tax Act, 1961.
2. Applicability of the decision in the case of Commissioner of Income Tax v/s Emirates Commercial Bank.
3. Eligibility of the Appellant as an industrial undertaking for deduction under Section 35D.
4. Prospective application of the omission of the word "industrial" by the Finance Act, 2008 for Assessment Year 2006-2007.

Analysis:

1. The judgment begins by acknowledging the arguments presented by both sides and examining Section 35B of the Income Tax Act, 1961. It recognizes that the appeal raises a substantial question of law warranting admission.

2. The first substantial question of law raised is whether the Tribunal erred in not following the decision of the jurisdictional High Court in the case of Commissioner of Income Tax v/s Emirates Commercial Bank as reported in 262 ITR 55. This issue pertains to the applicability and relevance of a previous court decision in the current context.

3. The second issue concerns the Tribunal's decision on the Appellant's eligibility as an industrial undertaking for claiming deductions under Section 35D of the Income Tax Act, 1961. The Tribunal's ruling on this matter is being challenged based on the facts and circumstances of the case.

4. The third substantial question of law questions the Tribunal's interpretation regarding the prospective application of the omission of the word "industrial" by the Finance Act, 2008. Specifically, the issue is whether this omission should be considered for the Assessment Year 2006-2007 or not based on the Tribunal's decision.

5. The judgment notes that the Respondent/Revenue has waived service, indicating a procedural aspect of the case.

In conclusion, the judgment addresses multiple legal issues related to the interpretation of relevant sections of the Income Tax Act, the applicability of prior court decisions, and the eligibility of the Appellant for specific deductions. The analysis delves into the specifics of each issue raised, providing a comprehensive overview of the court's considerations and decisions in this case.