CIT Vs. DHAMPUR SUGAR MILLS LTD

JUDGEMENT

(1.) THE Income Tax Appellate Tribunal, Delhi has referred following two questions of law under section 256(2) of the Income Tax Act, 1961 (here in after referred to as 'the Act') for opinion to this court: '(I) Whether on the facts and in the circumstances of the case, the Tribunal was, in law, justified in deleting the disallowance of interest on excess levy sugar price amounting to Rs. 26,49,900 ? (2) Whether on the facts and in the circumstances of the case, the Tribunal was, in law, justified in deleting the disallowance of Rs. 3,96,000 out of payment of interest as no interest was charged by the assessee company on the advance given to subsidiaries viz,, M/s. Dhampur Yeast Company, U.P. Straw Board and Agro Products Limited. The reference relates to the assessment year 1982 -83.

(2.) HEARD Sri A.N. Mahajan, learned counsel appearing for the revenue and Sri R.R. Agarwal, learned counsel appearing for the respondent assessee.

(3.) RESPECTFULLY following the aforementioned decision, we are of the opinion that the Tribunal was justified in deleting the disallowance of Rs. 3,96,000 out of the payment of interest. We accordingly, answer both the questions referred to us in affirmative, i.e., in favour of the assessee and against the revenue. However, there shall be no order as to costs.