COMMISSIONER OF INCOME TAX Vs. ASHOK LEYLAND LTD

JUDGEMENT

(1.) The Revenue has preferred in T.C.(A) No.1253 and 1254 of 2005, raising the following substantial questions of law, with regard to the assessment year 1995-96:

(2.) The assessee is also on appeal before this Court in T.C.(A) Nos.1256 of 2005, raising the following substantial question of law, with regard to the assessment year 1995-96:

(3.) The issues raised in these appeals relate to the disallowance of Euro issue expenditure on the right of the assessee to come within the provisions of Section 35D of the Income Tax Act. On the question of the assessee's entitlement for amortisation under Section 35-D, the Tribunal held that as the expenditure was for extension of the industrial undertaking, the same qualified for deduction in terms of Section 35D. However, on the aspect of expenditure to be considered under Section 35D, the Tribunal referred to Section 35D(2) Sub Clause (iv) and pointed out that the deduction allowable under the Act must be allowed in accordance with the provisions of the Act. The word "being" used in the Section is not restrictive and hence, the deduction could be allowed. In the circumstances, by order dated 04.02.2005, the Tribunal directed the Assessing Officer to re-compute the deduction according to the provisions of the Act. Thus the assessee's appeal was partly allowed and the Revenue's appeal as regards the allowability of expenditure was also considered in terms of the decision in the assessee's appeal.