2017 (8) TMI 621 - HC - Income Tax

Interest free loan given to Andhra Pradesh Rayons Limited - deduction of royalty on Bamboo exploited - Held that - Decided in favour of assessee as relying on The Commissioner of Income Tax, Nagpur Versus M/s. Ballarpur Industries Ltd. 2017 (8) TMI 610 - BOMBAY HIGH COURT Addition u/s 40A - addition on account of contribution made by the assessee to various educational institutions not in the capacity as an employer - Held that - The issue raised herein stands concluded against the revenue and in favour of the applicant-assessee by the decision of this Court in Mahindra & Mahindra Ltd. .vs. CIT (2003 (1) TMI 71 - BOMBAY High Court) and CIT .vs. Mahindra & Mahindra Ltd.(2005 (9) TMI 54 - BOMBAY High Court) .

Summary

Issues Involved:
1. Deletion of interest-free loan
2. Deduction of royalty on Bamboo exploited
3. Deletion of contribution made to educational institutions

Deletion of Interest-Free Loan:
The High Court was asked to opine on whether the Tribunal was justified in law in sustaining the deletion of a substantial amount on account of an interest-free loan given to a company. The Court referred to a previous decision where similar questions were considered, and it was established that the questions raised in the current case were already addressed in the earlier judgment. As there were no changes in facts or law, the Court ruled in favor of the respondent-assessee and against the applicant-revenue regarding the deletion of the interest-free loan.

Deduction of Royalty on Bamboo Exploited:
The Court was also tasked with determining whether the Tribunal was justified in directing that deduction of royalty on Bamboo exploited should be allowed at rates other than those specified in agreements with the Government. Similarly, the Court found that this issue had already been settled in a previous case. As per the earlier decision, the Court ruled in favor of the respondent-assessee and against the applicant-revenue regarding the deduction of royalty on Bamboo exploited.

Deletion of Contribution to Educational Institutions:
Regarding the deletion of a contribution made by the assessee to various educational institutions, the Court referred to previous judgments where similar issues were decided. The Court noted that the matter had already been concluded against the revenue and in favor of the assessee in previous cases. Therefore, the Court ruled in favor of the respondent-assessee and against the applicant-revenue regarding the deletion of the contribution made to educational institutions.

In conclusion, the High Court disposed of the reference in favor of the respondent-assessee on all three issues, citing previous judgments that had already settled the matters in question.