IN THE HIGH COURT OF JUDICATURE AT BOMBAY
\nORDINARY ORIGINAL CIVIL JURISDICTION
\nINCOME TAX APPEAL NO. 809 OF 2017
\nPr. Commissioner of Income Tax 3-Mumbai .. Appellant
\nVs
\nM\/s. M. J. Exports Pvt. Ltd. .. Respondent
\nMr. Sham Walve a\/w Pritish Chatterjee, for the Appellant.
\nMr.K.Shivram, Senior Advocate with Mr.Rahul Hakani and Shashank
\nDundu, for the Respondent.
\nCORAM : M.S.SANKLECHA &
\nNITIN JAMDAR, JJ.
\nDate : 27 August, 2019.
\nP.C. :
\nOn 20 August 2019, we passed the following order :-
\n\u2018This Appeal under Section 260-A of
\nthe Income Tax Act, 1961 (the Act), challenges the
\norder dated 17th May, 2016 passed by the Income
\nTax Appellate Tribunal (the Tribunal). The
\nimpugned order dated 17th May, 2016 is in respect
\nof Assessment Year 2007-08.
\n2 Revenue urges the following questions
\nof law, for our consideration:
\n\u201c(a) Whether on the facts and in the
\ncircumstances of the case and in law, the Tribunal
\nwas justified in allowing the claim of the Assessee
\nfor on account of payment of interest on delayed
\npayment of Custom Duty and Penalty without
\nappreciating the fact that such interest was penal in
\nnature and hence not allowable u\/s. 37 of the I.T.
\nAct?
\n(b) Whether on the facts and in the
\ncircumstances of the present case and in law, the
\nTribunal was justified in allowing the claim of the
\nAssessee for on account of payment of interest on
\ndelayed payment of Custom Duty and Penalty
\nwithout appreciating the fact that such interest was
\nnot allowable u\/s. 43B of the I.T. Act as the same
\ndid not form part of Tax Duty Cess or Fees as
\nstipulated u\/s. 43B of the I.T. Act?\u201d
\n3 The impugned order of the Tribunal
\nallowed the Respondent-Assessee\u2019s appeal by
\nholding that the Respondent is entitled to claim
\nexpenditure in respect of interest paid on delayed
\npayment of customs duty under Section 37 of the
\nAct. This by placing reliance upon the decision of
\nSupreme Court in Mahalxmi Sugar Mills Co., v\/s.
\nCIT 123 ITR 429. The impugned order dated 17
\nth May, 2016 also placed reliance upon Section 43B
\nof the Act and held that even under the above
\nprovision, the Respondent would be entitled to
\nclaim the expenditure. In spite of having so held,
\nthe impugned order records that there are contrary
\ndecisions which have taken a view that the interest
\non delayed payment can not allowed. None of the
\ncontrary decisions have been referred to in the
\nimpugned order.
\n4 In the above view, Mr. Walve, learned
\nCounsel for the Revenue seeks time to examine
\nwhether there are any decisions contrary to the view
\ntaken by the Apex Court in Mahalaxmi Sugar Mills
\nCo. (supra) and various High Courts referred to in
\nthe order of the Tribunal.\u2019<\/p>\n
2. Regarding Question (a).
\n(a) Mr.Walve learned counsel appearing for the Revenue
\nstates that he was not able to file any decisions contrary to the view
\ntaken by the Honble Supreme Court in Mahalaxmi Sugar Mills
\n(supra) and various High Court decisions relied upon in the
\nimpugned order.
\n(b) We find that the impugned order of the Tribunal after
\nrecording that the issue stands covered by various decisions of the
\nSupreme Court and the various High Courts cases observes
\n\u201cadmittedly, there are contrary decisions where it is held that interest
\npaid on delayed payments cannot be allowed as deduction in the
\nassessment proceedings.\u201d The above statement in the impugned
\norder led us to direct the counsel appearing for the parties to examine
\nthe law on this issue and to bring to our attention any decision
\ncontrary to the view taken by the Supreme Court in Mahalaxmi Sugar
\nMills (supra) and other High Courts decisions. We are now informed
\nby Counsel for both sides that there are no decisions contrary to the
\nview taken by the Hon\u2019ble Supreme Court in Mahalaxmi Sugar Mills
\n(supra) and the various High Court decisions referred to in the
\nimpugned order of the Tribunal. All this effort and time would have
\nbeen saved if the Tribunal had made specific reference to contrary
\ndecisions or not stated so in the absence of referring to the citations.
\nTherefore, we would request the Tribunal to be specific about the
\ndecisions and make a mention of the citation in the order and not
\nmake general observations as in this case.
\n(c) Thus this Question does not give rise to any substantial
\nquestion of law as it follows the decisions of the Apex Court in
\nMahalaxmi Sugar Mills (supra). Thus not entertained.
\n3. Regarding Question No.(b).
\n(a) It is undisputed by the parties, that in view of our answer
\nto Question (a) above, no substantial question (b) arises for our
\nconsideration.
\n(b) Thus not entertained.
\n4. Accordingly, appeal dismissed.
\n(NITIN JAMDAR, J.) (M.S.SANKLECHA, J.)
\n::: Uploaded on – 30\/08\/2019 ::: Downloaded on – 06\/09\/2019 13:31:22 :::<\/p>\n","protected":false},"excerpt":{"rendered":"
All this effort and time would have been saved if the Tribunal had made specific reference to contrary decisions or not stated so in the absence of referring to the citations. Therefore, we would request the Tribunal to be specific about the decisions and make a mention of the citation in the order and not make general observations as in this case.<\/p>\n