JUDGMENT
1. By preferring these two applications, the Commissioner of Income-tax has requested the court to direct the Tribunal to refer the questions to this court.
2. The Commissioner of Income-tax raised one question in Income-tax Application No. 66 of 1999 which is as under :
“Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the assessee is entitled to deduction of Rs. 30 lakhs under Section 52AB of the Income-tax Act, 1961?”
3. The Commissioner of Income-tax raised three questions in Income-tax Application No. 71 of 1999 which are as under :
“1. Whether, the Appellate Tribunal is right in law and on facts in confirming the order passed by the learned Commissioner of Income-tax (Appeals) and deleting the interest of Rs. 76,64,412 on account of interest free advance made to the sister concerns, other than for business purposes ?
2. Whether the Appellate Tribunal is right in law and on facts in confirming the order passed by the learned Commissioner of Income-tax (Appeals) holding that the provision of Section 43B of the Income-tax Act, 1961, is not applicable ?
3. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was justified in law in holding that the assessee is entitled to deduction of Rs. 30 lakhs under Section 32AB of the Income-tax Act, 1961 ?”
4. Question No. 3 of Income-tax Application No. 71 of 1999 and the only question in Income-tax Application No. 66 of 1999 being common, we first deal with the common questions. It appears to us that on the facts pleaded before the Tribunal to the effect that the amount was deposited under Section 32AB of the Income-tax Act, 1961, the Tribunal accepted the same, i.e., the amount deposited in time as contemplated under Section 32AB of the Act.
5. Mr. Naik, learned counsel for the Department, makes a statement at the bar that the assessee has successfully moved the Bank of Baroda and as the assessee has the account with the Bank of Baroda, the said bank has obliged the assessee by writing a letter to the IDBI and in turn the IDBI has also obliged the assessee by issuing a receipt as if the amount was accepted on September 25, 1989. Mr. Naik submitted that the amount was not received on that date but it was received almost after a month. Suffice it to say that about the allegations, nothing in writing is placed before the court and only an oral statement is made ; where, in fact, the Bank of Baroda which is a Government undertaking was instructed by the assessee to transmit the amount to another banker (IDBI for short hereafter) of the Government so as to enable the IDBI to issue a receipt in accordance with the provisions contained in the Investment Deposit Account Scheme, 1986. The Bank of Baroda, failed to transmit the amount to the IDBI, as instructed by the assessee, it cannot be said that the assessee has failed in making payment. It is not the case that the Bank of Baroda did not receive such
instructions. It may be that because of the banker’s negligence, the amount was not transmitted in time. As a matter of fact, realising the fact that the amount has not been transmitted under instructions, correspondence ensued between the assessee and the Bank of Baroda and between the Bank of Baroda and the IDBI. On considering the fact that the mistake was committed by the Bank of Baroda and it agreed to pay the interest to the IDBi, on receiving the amount with interest, the IDBI issued a receipt as if the amount was received on September 25, 1989. Thus the assessee produced the receipt before the authority and pleaded that the amount was deposited on September 25, 1989. Before us Mr. Naik submitted that it was the duty of the assessee to see that a cheque or a draft is submitted before the IDBI and it was also the duty of the IDBI to issue a receipt against the cheque or draft. As per the rule, receipt is required to be produced indicating that the amount has been received on a particular date and the Tribunal on the facts held that such receipt was produced and accepted the contention raised by the assessee and rejected the contention raised by the Revenue. The Commissioner (Appeals) while allowing the appeal considered the decision of this court in the case of Indulal Kanji Parehh v. CIT [1987] 163 ITR 102. Even the Commissioner (Appeals) accepted the contention raised by the assessee. The Commissioner (Appeals) and the Tribunal, on the material placed on record, arrived at a conclusion which is based on the facts of the case.
6. If it was pleaded before the Commissioner (Appeals) or the Tribunal or even before us that the assessee has by following dubious method managed to obtain a receipt from the IDBI, the matter would have been quite ‘ different. Mere statement is not sufficient. Thus in view of the peculiar facts and circumstances of the case, the Tribunal has taken the particular view and, therefore, we do not find any reason to interfere with.
7. So far as question No. 2 raised in Income-tax Application No. 71 of 1999 is concerned, Mr. Naik has rightly not pressed this question stating that the same is not necessary in view of the fact that the High Court has rejected the contention of the Department.
8. So far as question No. 1 in Income-tax Application No. 71 of 1999 is concerned, it relates to the order passed by the Commissioner of Income-tax (Appeals) deleting interest of Rs. 76,64,412 on account of interest-free advances made to the sister concerns. In our opinion, the same is based on the facts of the case. Since in the assessment year 1987-88, the assessee was granted benefit, as there was a change in the system of accounting year. On the facts, the Tribunal has not accepted the contention and we also do not find any merit in the same. Hence, the applications are rejected.