1 itxa3922.09 ast IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.3922 OF 2009 The Commissioner of Income Tax-7. ....Appellant Vs. M/s. The Ruby Mills Ltd. ....Respondent. Ms. Suchitra Kamble, advocate for appellant. Mr. R. Murlidharan a/w. Mr. Balasaheb Yewale i/b. PDS Legal, advocate for respondent. CORAM:- J.P.DEVADHAR AND MRS.MRIDULA BHATKAR, JJ. DATED:- FEBRUARY 8, 2011. P.C. 1. Question of law raised by the revenue in this appeal reads thus: “Whether on the facts and circumstance of the case and in law, the Hon’ble ITAT was justified in upholding the order of CIT(A) and in directing the AO to delete the addition of interest of Rs. 1,14,73,376/- on inter-corporate deposits on accrued basis ?” 2. The Tribunal has deleted the addition of interest by relying on its decision in the earlier orders for assessment years 1998-99, 1999-2000 and 2002-2003. All the appeals filed by the revenue in respect of those assessment years have been dismissed on account of non-removal of the office objections and thus the 2 itxa3922.09 order of the Tribunal has attained finality. Moreover, the additions made in assessment year 1999-2000 have been deleted by recording reasons as follows: “45. In the present case, the assessee had received interest on ICDs regularly till February, 1997. Thereafter, the parties started defaulting in the payment of interest. The assessee company had not received any interest during the relevant assessment years. It had, therefore, initiated legal proceedings to recover outstanding principle sums as well as interest due from them from February, 1997. The fact of non-payment was evident from the dishonour of post-dated cheques given by the parties. The assessee had initially issued notice u/s. 138 r.w.s. 141 of the Negotiable Instrument Act, followed by Criminal complaints with the Metropolitan Magistrate of Bombay. The assessee company has also filed civil suits for the recovery of sums alongwith the interest. These suits are still pending for decision. Therefore, no interest has accrued during the assessment years under consideration as we have elaborately discussed above. The assessee company has also complied with accounting standard for Revenue Recognition and Guidance Note on Accrual System issued by the Institute of Chartered Accountants of India. Therefore, we do not find any justification for making the additions of Rs.1,23,25,069 towards purported interest due on ICDs for each of the assessment years 1998-99 and 1999-2000, the same are therefore deleted. This ground of appeal is decided in favour of the assessee.” 3. No fault can be found with the above reasons recorded by the Tribunal. In this view of the matter, the present appeal is hereby dismissed. (MRS.MRIDULA BHATKAR, J.) (J.P.DEVADHAR, J.)