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TMI Blog2011 (3) TMI 934X X X X Extracts X X X X X X X X Extracts X X X X ..... en made retrospectively effective from April 1, 1962, usance interest payable outside India by an undertaking engaged in the business of ship-breaking in respect of purchase of a ship from outside India is deemed to be interest payable on debt incurred in a foreign country in respect of the purchase outside India and as such the same cannot be included while computing the total income of the petitioner - Decided in favour of the assessee - 9677 of 2001 - - - Dated:- 17-3-2011 - HARSHA DEVANI MS., ANTANI H. B., JJ. JUDGMENT Ms. Harsha Devani J.- 1. By this petition under article 226 of the Constitution of India, the petitioner has challenged the notice dated May 28, 2001, issued by the respondent under section 148 of the Inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e belief that in the present case the petitioner had paid usance interest amounting to Rs. 14,32,469 on purchase of ships but had not complied with the aforesaid provisions and as such the petitioner had been allowed deduction against profits which was contrary to the law in force, resulting in escapement of income chargeable to tax. Being aggrieved, the petitioner has filed the present petition. 4. Mr. B. D. Karia, learned advocate appearing on behalf of the petitioner, invited attention to the provisions of section 10(15)(iv)(c) of the Act which provides that the interest payable by an industrial undertaking in India on any moneys borrowed or debt incurred by it before the 1st day of June, 2001, in a foreign country in respect of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice on the ground that the petitioner had paid usance interest amounting to Rs. 14,32,469 on purchase of ships and had not complied with the provisions of section 40(a)(i) of the Act. However, by virtue of Explanation 2 to section 10(15)(iv)(c) of the Act, which has been made retrospectively effective from April 1, 1962, usance interest payable outside India by an undertaking engaged in the business of ship-breaking in respect of purchase of a ship from outside India is deemed to be interest payable on debt incurred in a foreign country in respect of the purchase outside India and as such the same cannot be included while computing the total income of the petitioner. In the circumstances, the very basis for reopening the assessment no l ..... X X X X Extracts X X X X X X X X Extracts X X X X
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