JINDAL INDUSTRIES LIMITED Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) IN respect of asst. yrs. 1977 -78 and 1978 -79 the Tribunal has, under S. 256(1) of the IT Act, referred the following question of law to this Court :

(2.) BRIEFLY stated the facts are that under the Voluntary Disclosure of Income and Wealth Act, 1976 the assessee disclosed certain income. The assessee did not pay the entire amount of tax payable under the said Act but chose, instead, to make the payment in instalments along with interest. The claim of the assessee before the ITO was that a sum of Rs. 2,82,106 and Rs. 36,370 paid as interest in respect of asst. yrs. 1977 -78 and 1978 -79 respectively should be allowed as deduction.

(3.) THE assessee then filed an appeal to the CIT(A) but without any success. A second appeal was then filed to the Tribunal and it was urged that the deduction was admissible under S. 37(1) and also under S. 36(1)(iii) of the Act. It was contended that the amount paid by way of interest was in the interest of business and instead of the assessee taking a loan or withdrawing capital from business had chosen to pay interest on delayed payment. The Tribunal, however, did not accept this contention and, inter alia, following the decision of this Court in the case of Dalmia Dadri Cement Ltd. vs. CIT (1980) 125 ITR 425 (Del) it came to the conclusion that the amount of interest paid was not allowable as a deduction. It is thereafter that the aforesaid question of law has been referred to this Court.