9911796707
TMI Blog1991 (1) TMI 20X X X X Extracts X X X X X X X X Extracts X X X X ..... assessing authority disallowed the claim of the assessee for deduction under section 10(15)(iv)(c) of the Income-tax Act, 1961, in respect of the interest on the long-term loan obtained from a foreign creditor, on the ground that the loan was not approved by the Central Government under the said provision. The assessing authority opined that the agreement under which the loan was obtained should have been approved by the Central Government for the purpose of section 10(15)(iv)(c). The Commissioner of Income-tax (Appeals) II, Bangalore, reversed this and allowed the claim of the assessee. The Commissioner of Income-tax (Appeals) held that the loan was approved by the Central Government (Ministry of Industry and Supply) on April 26, 1965. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income had to be separately decided by the Central Government in the Ministry of Finance when an application for exemption in the prescribed form was made. The Central Government in the Ministry of Finance understood this legal position when it directed in the said letter dated February 27, 1965, that the application for exemption of the interest on the long-term foreign loan was to be made by the Indian industrial undertaking in the revised pro forma which was enclosed and again when it fixed 6% per annum as the rate of interest in the two exemption orders dated September 3, 1965, and June 7, 1967. " Hence, the assessee has sought this reference since the Appellate Tribunal has negatived the claim of the assessee. The decision of the D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Central Government would not mean the Ministry of Industry. We do not think that it is necessary for us to examine the question in the manner in which it was considered by the Delhi High Court. The conclusion arrived at by the Appellate Tribunal seems to us to be correct, having regard to the language of section 10(15)(iv)(c) of the Act. The relevant provision reads : " 10. In computing the total income of a previous year of any person, any income falling within any of the following clauses shall not be included - . . . (15)(iv) interest payable - ..... (c) by an industrial undertaking in India on any moneys borrowed or debt incurred by it in a foreign country in respect of the purchase outside India of raw materials or components ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... use (10C), a similar terminology is used. Several sub-clauses under section 88(2) which require issuance of a notification by the Government also refer to the specification in the notifications " in this behalf ". From the above, we are of the view that the approval under section 10(15)(iv)(c) by the Central Government will have to be a specific approval concerning the subject stated therein and not a general approval for any other purpose. The letter of the Government of India, Ministry of Industry and Supply, dated April 26, 1965, referred to by the Commissioner of Income tax (Appeals) expresses an approval for the importation of machinery, etc. It is not an approval with reference to section 10(15)(iv)(c) of the Act at all. Therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X
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