PER G. PER G. PER G. PER G.D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, VP VP VP VP : : : : By this miscellaneous application, the Revenue has sought for modification of the order of the ITAT dated 29 th April, 2011 passed in ITA No.3156/Del/2010.

2. At the time of hearing before us, it is stated by the learned DR that the miscellaneous application is filed by the Revenue in view of the observation of the Hon’ble Delhi High Court in the case of the assessee in ITA No.1292/2011 vide order dated 22 nd December, 2011. He stated that the facts giving the chronology of events are properly recorded in the miscellaneous application. The same should be considered and the order of the ITAT in ITA No.3156/Del/2010 should be modified in the light of the decision of Hon’ble Allahabad High Court, Lucknow Bench dated 24 th May, 2010 passed in assessee’s own case for AY 1996-97. MA-62/Del/2012 2

3. The learned counsel for the assessee, on the other hand, stated that the limited dispute before the ITAT in the present appeal was with regard to the quantum of deduction permissible under Section 57(iii) of the Income-tax Act, 1961. The issue of allowability of deduction was already settled by the ITAT in the earlier decision wherein the ITAT has set aside the matter to the file of the Assessing Officer. While giving effect to the order of the ITAT, the Assessing Officer himself has allowed the relief under Section 57(iii). In the second round of appeal, the only dispute was with regard to the quantum of deduction allowable under Section 57(iii) and not per se to the allowability of deduction. He, therefore, submitted that the miscellaneous application filed by the Revenue deserves to be dismissed.

4. We have carefully considered the arguments of both the sides and perused the material placed before us. We find that in the Revenue’s miscellaneous application, the chronology of events has been properly recorded. The same is reproduced herein below for ready reference:- In this case return of income showing total loss of Rs.13,11,150/- was furnished on 29.10.97. In the original return filed the assessee had claimed deduction under section 57(iii) in respect of interest on borrowed capital for the purpose of investments in shares of the group companies. During the course of assessment proceedings the assessee revised its claim from Rs.20,26,566/- to Rs.28,68,440/- vide revised statement of income dated

12.10.1999. The then Assessing Officer did not entertain the claim of the assessee in respect of interest on borrowed capital. In the assessment, addition of Rs.20,26,566/- was made. The assessment was completed MA-62/Del/2012 3 u/s 144 on 30.03.2000 at assessed income of Rs.11,75,005/-. The assessee filed an appeal before the CIT(A). Ld.CIT(A) vide his order dated 28.02.2002 deleted the addition of Rs.20,26,566/- being disallowance of interest claimed by the assessee u/s 57(iii). After appeal effect to the order of CIT(A), total loss was determined of Rs.12,66,210/-. The Department filed the appeal before Hon’ble ITAT against the order of the ld.CIT(A). The Hon’ble Tribunal vide order dated 19-07-2005 held as follows:-

“The issues relating to the interest on borrowed capital was set aside by the Tribunal in the A.Y. 1996-97 and as no new facts have been brought before us, concurring with the same, we set aside the issue and restore back to the file of the Assessing Officer for passing an order afresh.”

The Assessing Officer subsequent to the order of the Hon’ble Tribunal again examined the matter & allowed the claim of the assessee to the extent of Rs.20,26,566/- only u/s 57(iii) and total loss was computed at Rs.12,66,210/- in order dated 06/12/06 u/s 143(3)/251/254 of the I.T.Act

1961. In the order dated 06.12.2006, the then AO observed that the Assessing Officer should have revised his claim by way of revised return on or before 31.03.1999. As the revised computation filed by him was beyond the stipulated period, the same cannot be accepted. The assessee again filed appeal before ld.CIT(A). Ld.CIT(A) vide his order dated 13.04.2010 in appeal no.273/06-07, directed the AO to allow the claim of the assessee to the MA-62/Del/2012 4 extent of Rs.26,68,440/- (it appears that the figure was inadvertently mentioned at Rs.26,68,440/- in place of Rs.28,68,440/- claimed by the assessee in revised statement of income) and modify the asstt. accordingly. Department filed appeal before Hon’ble ITAT against the order dated 13.04.2010 of ld.CIT(A). Hon’ble ITAT in its order dated 29.04.2011 held that

“we do not find any infirmity in the order of the CIT(A). He has directed the AO to allow the correct deduction in the light of the Tribunal order on the same issue in the preceding year as well as in the year in question. We decline to interfere.”

Revenue did not accept the decision of Hon’ble ITAT and filed appeal before Hon’ble High Court Delhi. In ITA No.1292/2011 dated 22.12.2011, Hon’ble High Court has observed that

“by the order dated 24.05.2010 passed in ITA No.31/2005 by the High Court of Allahabad, the substantial question of law on this issue have been answered in favour of the Revenue and the findings recorded by the Tribunal were reversed. Hon’ble High court further observed that it is noticed that the cross- appeals have been decided without referring to & without taking into consideration the order dated 24.05.2010 passed by the Allahabad High Court.”

Hon’ble High Court held that :-

“we feel Revenue should file an application under Section 254(2) before the tribunal. If they do not succeed they will be at liberty to file an application to revive the present appeal. The appeal will be treated as disposed of.”

MA-62/Del/2012 5 Accordingly, the ld.CIT(Central)-I has authorized for filing of Miscellaneous Application before Hon’ble ITAT in the case of Sh.Ishtiaq Ahmad, for Asstt. Year 1997-98 in accordance with the direction of Hon’ble High Court, Delhi arising out of order dated 29.04.2011 of Hon’ble ITAT in ITA No.3156/Del/2010 & C.O. No.248/Del/2010.”

5. That the Hon’ble Jurisdictional High Court in its order dated 22 nd December, 2011 in ITA No.1292/2011 held as under:-

“Ld. counsel for the appellant has drawn our attention to the order dated 24.5.2010 passed in ITA No.31/2005 by High Court of Allahabad, Lucknow Bench. By the said order the substantial questions of law arising out of the earlier order of the tribunal dated 19.7.2005 have been answered in favour of the Revenue and the findings recorded by the tribunal were reversed. By the same order dated 19.7.2005, the tribunal had asked the Assessing Officer to consider the claim of the assessee for further deduction of about Rs.8,00,000/-. Subsequent order passed by the Assessing Officer became subject matter of challenge before the tribunal in two cross-appeals, which have been decided by the impugned order dated 29.4.2011. It is noticed that the cross-appeals have been decided without referring to and without taking into consideration the order dated 24.5.2010 passed by the Allahabad High Court, Lucknow Bench. In these circumstances, we feel that Revenue should file an application under Section 254(2) before the tribunal. If they do not succeed they will be at liberty to file an MA-62/Del/2012 6 application to revive the present appeal. The appeal will be treated as disposed of. No costs.”

6. Thus, as per the Hon’ble High Court, the impugned order of the ITAT dated 29 th April, 2011 was passed without taking into consideration the order of Hon’ble Allahabad High Court, Lucknow Bench dated 24 th May, 2010. It may be clarified that the assessee’s case for AY 1996-97 was decided by the ITAT, Lucknow Bench and therefore, the appeal against the said decision was filed by the Revenue before the Hon’ble Allahabad High Court. Thereafter, the appeals of the assessee have been transferred to Delhi. Accordingly, appeal for AY 1997-98 is adjudicated by the ITAT, Delhi Bench and consequently, the appeal there against was filed and decided by the Hon’ble Delhi High Court. In the original order of ITAT for AY 1997-98, the decision of ITAT for AY 1996-97 was followed. The said decision of ITAT for AY 1996-97 is subsequently adjudicated upon by the Hon’ble Allahabad High Court, Lucknow Bench. Admittedly, the same was not considered by the ITAT while adjudicating the appeal of the year under consideration. In view of the above, we deem it proper to recall the order of the ITAT in ITA No.3156/Del/2010 and also C.O. No.248/Del/2010 and direct that the same would be refixed for hearing afresh on 11 th April, 2013.

7. In the result, the miscellaneous application filed by the Revenue is allowed. Decision pronounced in the open Court on 4 th January, 2013. Sd/- Sd/- ( ( ( (I.C.SUDHIR I.C.SUDHIR I.C.SUDHIR I.C.SUDHIR) ) ) ) (G.D.AGRAWAL) (G.D.AGRAWAL) (G.D.AGRAWAL) (G.D.AGRAWAL) JUDICIAL JUDICIAL JUDICIAL JUDICIAL MEMBE MEMBE MEMBE MEMBER R R R VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT Dated : 04.01.2013 VK. MA-62/Del/2012 7 Copy forwarded to: -

1. Appellant : Deputy Commissioner of Income Tax, Deputy Commissioner of Income Tax, Deputy Commissioner of Income Tax, Deputy Commissioner of Income Tax, Central Circle Central Circle Central Circle Central Circle- - - -6, New Delhi. 6, New Delhi. 6, New Delhi. 6, New Delhi.

2. Respondent : Shri Ishtiaq Ahmed, Shri Ishtiaq Ahmed, Shri Ishtiaq Ahmed, Shri Ishtiaq Ahmed, 1, Kapoorthala Complex, 1, Kapoorthala Complex, 1, Kapoorthala Complex, 1, Kapoorthala Complex, Aliganj, Lucknow. Aliganj, Lucknow. Aliganj, Lucknow. Aliganj, Lucknow.

3. CIT

4. CIT(A)

5. DR, ITAT Assistant Registrar