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TMI Blog2002 (7) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... ceived by Jyoti Limited is also not disputed. - for the reasons stated hereinbefore, it is not possible to accept any of the contentions raised on behalf of the Revenue there being no infirmity in the order of the Tribunal. - - - - - Dated:- 5-7-2002 - Judge(s) : D. A. MEHTA., MS. H. N. DEVANI. JUDGMENT The judgment of the court was delivered by D.A. Mehta J.- The Income-tax Appellate Tribunal, Ahmedabad Bench "C", has referred the following question under section 256(1) of the Income-tax Act, 1961, at the instance of the Commissioner of Income-tax: "Whether the Appellate Tribunal was right in law in holding that the assessee was entitled to deduction of interest for 12 months for the calendar year 1983 when the debit note was r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not possible to presume that this would be non-interest bearing loan. It would be open to the creditor, according to the Tribunal not to charge or waive the interest, but if any interest is charged by the creditor the debtor is bound to honour the same. The Tribunal has further found that the assessee-company is continuously incurring losses and by claiming deduction for interest payment the assessee-company does not derive any advantage, considering the fact that up to the assessment year 1990-91 there was no positive income in the hands of the assessee-company and there were substantial amounts of carried forward losses and unabsorbed depreciation; while on the other hand, the interest paid by the assessee has been brought to tax in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imited had for the first time treated the outstanding balance due from the assessee as loan only on June 30, 1983. The second contention was to the effect that Jyoti Limited could not on its own, by passing a resolution, impose interest on the assessee-company in the absence of bi-partite agreement. That the acceptance made by the assessee-company was admittedly after December 31, 1983, and hence there was no concluded contract. Though served there is no appearance on behalf of the respondent. It is fallacious on the part of the Revenue to presume that Jyoti Limited has by passing a resolution on November 18,1983, sought to charge interest for the past period. The relevant previous year, i.e., the accounting period of the assessee is th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt, on which the creditor has paid tax it cannot be successfully urged by the Revenue that there was no concluded contract. It is not even the case of the Revenue that Jyoti Limited was wrongly taxed on the interest amount received by Jyoti Limited from the assessee. Learned counsel for the Revenue has not been able to dispute the fact that by making payment of interest the assessee-company does not stand to derive any advantage considering the assessment record of the assessee-company, which has been taken note of by the Tribunal. Similarly, that there is actual payment and Jyoti Limited, has paid tax on the interest received by Jyoti Limited is also not disputed. In these circumstances, for the reasons stated hereinbefore, it is not p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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