2009 (6) TMI 3

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..... . JUDGMENT 1. These are the references made under Section 256 (2) of the Income Tax Act, 1961, by the Income Tax Appellate Tribunal, 'D' Bench, seeking opinion of this court on the question of law arising from its orders dated 30/1/1991. The question referred reads as under - "Whether on the facts and circumstances of the case, the Tribunal was right in law in holding that the interest paid of Rs.1,66,959/- for discounting the bills with the banks during the course of the business activities was not allowable in computing the business income under Section 37 of Income-Tax Act, 1961?" 2. The facts involved in both the applications are common, the issue involved is identical, so the single judgment will dispose of both the refe .....

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..... pellate power confirmed the order of C.I.T. (A) and justified treating part of the interest disallowable and confirmed the order passed in first appeal. 7. On being applied by the assessee-applicant under Section 256(1) of the Act, the present reference is made as stated in the opening part of this order. SUBMISSIONS : 8. Mr. Mistry, learned counsel appearing for the assessee contends that the impugned order of the Tribunal is palpably wrong since the Tribunal failed to take into account the business expediency requiring to make immediate payment resulting in necessity of bills discounting. He further submits that so far as the factum of discounting of bills are concerned, all these bank transactions are held to be genuine one. .....

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..... that, there cannot be two different yard-sticks for two different assessment years in respect of the very same assessee. That the Tribunal was not justified in holding that the interest paid of Rs.1,66,959/- for discounting the bills with the banks during the course of business activities was not allowable in computing the business income under Section 37 of Income Tax Act, 1961. 10. Per contra, Mr.Gupta learned counsel for the Revenue strongly opposed the submissions canvassed on behalf of the assessee. He tried to distinguish both the orders on which the reliance was placed by Mr.Mistry. However, faced with the absence of challenge with the order of Tribunal for the subsequent assessment years in the case of assessee itself and also i .....

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