LUBRIZOL INDIA LIMITED Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) BY this reference under S. 256(1) of the IT Act, 1961 made at the instance of the assessee, the Tribunal has referred the following four questions of law to this Court for opinion :

(2.) COUNSEL for the parties are agreed that question No. 1 is covered by the decision of this Court in Lubrizol India Ltd. vs. CIT (1991) 93 CTR (Bom) 237 : (1991) 187 ITR 25 (Bom) in favour of the Revenue. Question No. 2 is also covered in favour of the Revenue by the decision of the Supreme Court in Escorts Ltd. vs. Union of India (1992) 108 CTR (SC) 275 : (1993) 199 ITR 43 (SC). Question No. 4 is not pressed by the counsel for the assessee.

(3.) WE have considered the rival submissions. We find that the controversy regarding allowability of deduction of interest payable by the assessee under S. 215 of the Act specifically came up for consideration of this Court in Ferro Alloys Corpn. Ltd. vs. CIT (supra) wherein following its earlier decisions in Aruna Mills Ltd. vs. CIT (1957) 31 ITR 153 (Bom) and CIT vs. Ghatkopar Estate & Financial Corpn. (P) Ltd. (1989) 75 CTR (Bom) 124 : (1989) 177 ITR 222 (Bom) and also the ratio of the decision of the Delhi High Court in Bharat Commerce Industries vs. CIT (1985) 45 CTR (Del) 1 : (1985) 153 ITR 275 (Del) and Kerala High Court in Federal Bank Ltd. vs. CIT (1989) 79 CTR (Ker) 31 : (1989) 180 ITR 37 (Ker) it was held that such interest is not an allowable deduction under S. 37(1) of the Act.