1993 (9) TMI 62

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..... 976-77 and 1977-78 is not a revenue deduction while computing the total income of the assessee-company ? (2) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the assessee-company is not entitled to depreciation on research and development expenditure in respect of the assets where full value thereof has been allowed as a deduction in the previous years in view of the retrospective amendment of section 35, even though such retrospective amendment is illegal, ultra vires and contrary to the provisions of law, for the assessment years 1976-77 and 1977-78 ? (3) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the interest charged by the Depar .....

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..... s question needs consideration. Mr. P. S. Jetley, learned counsel for the Revenue, however, submits that the issue involved in this question is fully covered in favour of the Revenue by the decision of this court in Ferro Alloys Corporation Ltd. v. CIT [1992] 196 ITR 406. We have considered the rival submissions. We find that the controversy regarding allowability of deduction of interest payable by the assessee under section 215 of the Act specifically came up for the consideration of this court in Ferro Alloys Corporation Ltd. v. CIT [1992] 196 ITR 406, wherein following its earlier decisions in Aruna Mills Ltd. v. CIT [1957] 31 ITR 153 (Bom) and CIT v. Ghatkopar Estate and Finance Corporation (P.) Ltd. [1989] 177 ITR 222 (Bom) and also .....

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..... tions, the claim for deduction of interest under section 215 was held to be not allowable under section 37 of the Act. We find that the above judgment squarely covers the controversy before us. The ratio of this decision is quite clear and unambiguous that interest under section 215 cannot be allowed as a deduction under section 37 of the Act. We are in full agreement with the above conclusion. No case has been made out for reconsideration of the above decision of this court. Therefore, respectfully following the same, we answer question No. 3 in the affirmative and in favour of the Revenue. In the result, the questions are answered as under: Question No. 1 : Answered in the affirmative, i.e., in favour of the Revenue and against the as .....

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