9911796707
TMI Blog2015 (1) TMI 400X X X X Extracts X X X X X X X X Extracts X X X X ..... JHAVERI AND MR. K.J.THAKER, JJ. FOR THE APPELLANT : MR KM PARIKH, ADVOCATE, MR NITIN MEHTA, ADVOCATE, MRS MAUNA BHATT, ADVOCATE FOR THE RESPONDENT : MR BS SOPARKAR, ADVOCATE WITH MRS SWATI SOPARKAR, ADVOCATE JUDGEMENT Per: K S Jhaveri: 1. Being aggrieved and dissatisfied with the impugned judgment and order passed by the Income Tax Appellate Tribunal, Ahmedabad Bench (hereinafter referred to as 'the ITAT'), the revenue has preferred the present Tax Appeals assailing the following orders: Tax Appeal No. Date of Tribunal's order ITA No. Assessment Year 222/2007 07/04/06 2211/Ahd/1998 1995-96 142/2007 31/05/06 785/Ahd/2006 2002-03 505/2007 09/08/06 1470/Ahd/2006 2003-04 1153/2007 22/12/06 2264/Ahd/2006 2002-03 2. This Court while admitting these matters framed the following substantial qu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resaid substantial questions of law. 5. Mr. Soparkar, learned Counsel appearing on behalf of the respondent assessees has submitted that as such the questions of law raised in the present Tax Appeals are now not res integra in view of the decision of the Hon'ble Supreme Court in the case of Deputy Commissioner of Income Tax vs. Core Health Care Ltd. reported in (2008) 298 ITR 194 (SC) wherein the Hon'ble Supreme Court has held as under. Before concluding on this point we may state that in this batch of civil appeals we are concerned with the assessment years 1992-93, 1993-94, 1995-96 and 1997-98. A proviso has since been inserted in Section 36(1)(iii) of the 1961 Act. That proviso has been inserted by Finance Act, 2003 w.e.f. 1.4.2004. Hence, the said proviso will not apply to the facts of the present case. Further, in our view the said proviso would operate prospectively. In this connection it may be noted that by the same Finance Act, 2003 insertions have been made by way of proviso in Section 36(1)(viia) by the same Finance Act which is also made with effect from 1.4.2004. Same is the position with regard to insertion of a sub-section after Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asset of enduring nature into existence, and that it is the transaction of investment of the borrowed capital in the purchase of a new asset which brings that asset into existence. The transaction of borrowing is not the same as the transaction of investment. If this dichotomy is kept in mind it becomes clear that the transaction of borrowing attracts the provisions of Section 36(1)(iii). Thus, the decision of the Bombay High Court in Calico Dyeing Printing Works (supra) and the judgment of the Supreme Court India Cements Ltd. (supra) have been given with reference to the borrowings made for the purposes of a running business, while the decision of the Supreme Court in Challapalli Sugars Ltd. (supra) was given with reference to the borrowings which could not be treated as made for the purposes of business as no business had commenced in that case. Therefore, there is no inconsistency between the above decisions. 5.1. It is submitted that in the aforesaid decision the Honble Supreme Court has held that an assessee is entitled to claim interest paid on borrowed capital provided that the capital is used for business purpose irrespective of what may be the result of using the cap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... commencing on or after-the 1st day of April, 1988, as if the asset was the only asset in the relevant block of assets.] Explanation 3.- Where, before the date of acquisition by the assessee, the assets were at any time used by any other person for the purposes of his business or profession and the Assessing] Officer is satisfied that the main purpose of the transfer of such assets, directly or indirectly to the assessee, was the reduction of a liability to incometax (by claiming depreciation with reference to an enhanced cost), the actual cost to the assessee shall be such an amount as the Assessing] Officer may, with the previous approval of the Deputy] Commissioner, determine having regard to all the circumstances of the case. Prior to the substitution, Explanation 2 read as under: Explanation 2.- Where an asset is acquired by the assessee by way of gift or inheritance, the actual cost of the asset to the assessee shall be the written down value thereof as in the case of the previous owner for the previous year in which the asset is so acquired or the market value thereof on the date of such acquisition, which is the less. Explanation 4.- Where any asset which had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to have been included, in the actual cost of such asset;] 6. Learned advocates on behalf of the Department are not in a position to dispute the above and are not in a position to show and/or point out any decision taking a contrary view as applicable to the facts pleaded and proved in these appeals. 7. Having heard learned Counsel appearing on behalf of the Department and learned advocate appearing on behalf of the assessee and the questions posed for consideration before this Court reproduced hereinabove and considering the decision of the Hon'ble Supreme Court in the case of Core Health Care Ltd. (Supra), the questions which are raised in the present appeals are required to be answered in favour of the assessees as the facts are akin in these appeals and the said decision will inure to the benefit of the assessees. We are not giving further elaborate reasons for the same as in the case of Core Health Care Ltd. (Supra) it is held by the Hon'ble Supreme Court that section 36(1)(ii) of the Act makes no distinction between money borrowed to acquire a capital asset or a revenue asset and that all that the section requires is that that the assessee must borrow capital a ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
