(Per : HONOURABLE MR.JUSTICE V. M. SAHAI) We have heard Mr. M. R. Bhatt, learned Senior Standing Counsel assisted by Mrs. Mauna M. Bhatt for the appellant - revenue.
The Revenue has filed the instant appeal challenging the order dated 2.7.2010 of the Income-tax Appellate Tribunal proposing the following substantial question of law for the consideration and determination of this Court :-
"Whether the Appellate Tribunal is right in law and on facts in deleting the disallowance of Rs.4,12,27,149/- made under Section 40 A(2) of the Act ?"
The brief facts are that return of income was filed by the assessee Company on 29.10.2004 declaring total income of Rs.11,21,93,730/-. The Company manufactures tobacco products. The return filed by the asessee was taken up for scrutiny by issuing notice on 18.8.2005 under Section 143 (2) of the Income Tax Act, 1961. The Assessing Officer noticed that the assessee has paid interest @ 18% to its shareholders and other persons covered under Section 40A(2)(b). The assessee had also fixed deposits with the Bank and earned interest thereon @ 4 to 6%. The assessee had surplus funds, but instead of repaying the loans / advances carrying higher rates of interest, parked its funds with the Banks carrying interest at lower rates. The Assessing Officer restricted the claim of interest payment to 15% and disallowed the excessive payment of interest of Rs.4,12,27,149/-. The Commissioner of Income Tax (Appeals) allowed the appeal of the assessee. The order of the CIT (Appeals) was challenged by the revenue before the Income Tax Appellate Tribunal which has dismissed the appeal on 2.7.2010. The order passed by CIT (Appeals) and the Income Tax Appellate Tribunal have been challenged in this appeal.
In our opinion, the issues are essentially based on facts presented before the Adjudicating Authorities. The reasons given by the Tribunal are sound having no error nor any perversity. Since the issue involves factual controversy and not any question of law, much less, a substantial question of law, we do not find any merit in this appeal. This appeal is accordingly summarily dismissed.
Sd/-
[V.
M. SAHAI, J.] Sd/-
[N.
V. ANJARIA, J.] Savariya Top