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1991 (12) TMI 39 - BOMBAY HIGH COURTExtract: .......n made only because the special leave petition against the Delhi High Court decision in Bharat Commerce Industries Ltd. s case 1985 153 ITR 275 is pending before the Supreme Court. We see no reason for keeping this reference pending indefinitely for that reason. Under the circumstances, we record the answer in the affirmative. No order as to costs.
Issues involved: Deduction of interest levied under section 220(2), section 215, and section 201(1A) under section 37 of the Income-tax Act, 1961 for the assessment year 1976-77.
Summary: The court was asked to consider whether the claim for deduction of interest levied under various sections of the Income-tax Act as business expenditure under section 37 was rightly rejected. The amounts in question were Rs. 6,03,168 under section 220(2), Rs. 1,38,506 under section 215, and Rs. 66,590 under section 201(1A). The Income-tax Officer, Commissioner, and Tribunal had all rejected the claim, leading to the reference to the court. The court noted that previous decisions, including Aruna Mills Ltd. v. CIT and CIT v. Ghatkopar Estate and Finance Corporation (P) Ltd., had consistently held that such interest payments were not allowable under section 37. This view was also supported by the Delhi High Court in Bharat Commerce Industries Ltd. v. CIT and the Kerala High Court in Federal Bank Ltd. v. CIT. The assessee's counsel acknowledged that there was no decision taking a contrary view. The reference was made due to a pending special leave petition before the Supreme Court, but the court saw no reason to delay its decision. Consequently, the court recorded the answer in the affirmative, affirming that the interest payments were not deductible under section 37. No costs were awarded in this matter.
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