COMMISSIONER OF INCOME TAX Vs. SITARAM TEXTILES LIMITED

JUDGEMENT

(1.) The above reference arises from I.T.A. No. 620 (Coch)/1994. The following questions of law are referred under S.256(1) of the Income Tax Act (hereinafter referred to as 'the Act') :

(2.) Reference is made at the instance of the Revenue. Assessment year in question is 1991-92. Assessee filed return showing a loss of Rs. 1,44,97,339/-. Assessing Officer processed the return under S.143(1)(a) of the Act and issued an intimation determining the loss at Rs. 69,34,787/-. The Assessing Officer disallowed the interest debited in the profit and loss account in respect of the loans taken from the Industrial Financial Corporation of India and Industrial Development Bank of India as the interest was not paid to the Bank in the previous year under S.43B of the Act. The Assessing Officer demanded additional tax of Rs. 6,95,755/- under S.143(1)(a) of the Act.

(3.) On receipt of the intimation, the assessee filed a petition under S.154 of the Act seeking rectification of the adjustments made in the intimation and requesting for waiver of the additional tax. The above petition was rejected by the Assessing Officer. Appeal taken against that order before the Commissioner of Income Tax (Appeals) was also dismissed. The assessee took up matter before the Tribunal as I.T.A. No. 620 (Coch)/1994. The Tribunal held thus: