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TMI Blog2019 (4) TMI 663X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot be allowed the benefit of the Sick Industrial Companies Act( supra). The arguments related to working capital loan interest not covered under the provisions of section 43B of the Act and written back of the interest liability under section 41(1) of the Act in AY 2008-09, had not been raised before the lower authorities and first-time these arguments have been made before the Tribunal. We also note that these issues have not been raised before us by way of any additional grounds of appeal. The provisions of section 43B during relevant period also contain the subsection (c), which includes interest in respect of the loans from financial institutions. Any working capital loan from such financial institution is also subject to the provisions of section 43B of the Act during relevant period. From the evidences containing balance sheets and profit and loss account etc presented it is not clear whether the interest on working capital loan was related to financial institutions covered by subsection (c) of 43B during relevant period or related to scheduled banks covered by subsection (d) of 43B during relevant period . On this issue further investigation of facts is required. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plea of the assessee that it had intimated about the applicability of the Sick Industrial Companies (special provision) Act, 1985 which was not considered in proper perspective by the lower authorities: (i) the addition of interest amounting to ₹ 1,75,73,101/- due to financial institution on term loans and cash credit accounts u/s 43B of the Act. (ii) The addition of ₹ 9, 13, 560/-towards excise duty u/s 43B of the Act. 3. In compliance to the order of the Tribunal (supra), the Assessing Officer asked the assessee to provide a copy of the rehabilitation scheme/proposal prepared, following the direction of the Board of Industrial and Financial Reconstruction (BIFR) dated 13/08/2002. The Ld. Assessing Officer has noted that no such scheme of rehabilitation scheme was made available to him. The said scheme was not even made available before the Ld. CIT(A) in second round of appellate proceedings, and accordingly , she upheld the finding of the Ld. Assessing Officer. Aggrieved with the finding of the Ld. CIT(A), the assessee is in appeal before the Tribunal raising the grounds as reproduced above. 4. Before us, the assessee filed two paper books containing p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e rival submissions and perused the relevant material on record. The assessee is before the Tribunal in second round of the proceedings. In first round of the proceeding the matter was restored to the Assessing Officer with following directions: 7. We have heard the rival contentions and perused the material available on record. From the perusal of orders of lower authorities it is seen that the assesee had intimated about the applicability of Sick Industrial Companies Act, (supra) which has not been considered in proper prospective. In view thereof, we are inclined to set aside these issues back to the file of AO to decide the same afresh in accordance with law after giving assessee a reasonable opportunity of being heard. 9. The dispute before us is whether the applicability of the Sick Industrial Companies Act (supra) has been properly examined by the lower authorities or not. The assessee in the paper book containing 30 pages has filed a copy of the order of the BIFR (supra). In the said order, the BIFR directed as under: 14. The Bench further directed as under :- a) The company should submit their acceptable; viable, 'fully tied up and comprehensiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... FR (supra) was produced before us. The Ld. Counsel before us relied on the decision of the Hon ble High Court of Calcutta in the case of JK Corporation Limited (supra) . In the said case the Hon ble High Court held that the Sick Industrial Companies (Special Provisions) Act, 1985, is a special act and the scheme framed thereunder is binding upon everyone, as it has assumed the character of conclusions by virtue of section 18(4) and also section 18(8) and once a scheme is framed by virtue of section 32(1) , the scheme overrides all other provisions of the law including the Income Tax Act, 1961 and other instrument or document having effect by virtue of any law. In view of the above decision, it is evident that the schemes would override the provisions of the Income Tax Act. However no such scheme had been produced by the assessee either before the lower authorities or before us and thus the assessee cannot be allowed the benefit of the Sick Industrial Companies Act( supra). 12. The Ld. Counsel has raised another issue that provisions of section 43B during relevant period did cover only the interest paid toward term loans from the scheduled banks and not other interest either towa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before the due date as defined in the Explanation below clause (va) of subsection (1) of section 36, and where such payment has been made otherwise than in cash, the sum has been realised within fifteen days from the due date.]] Explanation 1 1].- For the removal of doubts, it is hereby declared that where a deduction in respect of any sum refer- red to in clause (a) or clause (b) of this section is allowed in computing the income referred to in section 28 of the previous year (being a previous year relevant to the assessment year commencing on the 1st day of April, 1983 or any earlier assessment year) in which the liability to pay such sum was incurred by the assessee, the assessee shall not be entitled to any deduction under this section in respect of such sum in computing the income of the previous year in which the sum is actually paid by him.] 2 Explanation 2.- For the purposes of clause (a), as in force at all material times, any sum payable means a sum for which the assessee incurred liability in the previous year even though such sum might not have been payable within that year under the relevant law.] 6 Explanation 4 3].- For the removal of doubt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 956 ), engaged in the business of providing long- term finance for industrial projects and approved by the Central Government under clause (viii) of sub- section (1) of section 36.] 13. The Ld. Counsel has also raised the alternative plea that the assessee has already written back the said amount of interest under section 41(1) of the Act as miscellaneous income in assessment year 2008-09 and therefore no disallowance should be made in the year under consideration. 14. The above arguments of the Ld. Counsel are not maintainable due to following reasons : (i) We have noted that both the arguments related to working capital loan interest not covered under the provisions of section 43B of the Act and written back of the interest liability under section 41(1) of the Act in AY 2008-09, had not been raised before the lower authorities and first-time these arguments have been made before the Tribunal. We also note that these issues have not been raised before us by way of any additional grounds of appeal. (ii) The provisions of section 43B during relevant period also contain the subsection (c), which includes interest in respect of the loans from financial institutions . In ..... X X X X Extracts X X X X X X X X Extracts X X X X
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