1 itxa2620-10 sas IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.2620 OF 2010 The Commissioner of Income Tax-4, Mumbai ..Appellant. V/s. Darashaw & Co. Pvt. Ltd. ..Respondent. Mr. Vimal Gupta for the appellant. Mr. S.E. Dastur, senior advocate with Nitesh Joshi i/b. Khaitan & Co. for the respondent. CORAM : J.P. DEVADHAR AND A.A.SAYED, JJ. DATED : 22ND JULY, 2011 P.C. :- 1. Four questions of law are raised by the revenue in this appeal, which read thus :- (A) Whether on the facts and in the circumstances of the case and in law, the Tribunal was right in allowing the claim of the assessing company of bad debts amounting to Rs.42,08,625/- in spite of the fact that the assessee did not fulfill the conditions laid down u/s. 36(2) of the Income Tax Act, 1961 ? (B) Whether on the facts and in the circumstances of the case and in law, the Tribunal was justified in deleting the disallowance made by the assessing officer on account of belated payment of PF which was paid within the grace period of five days ? (C) Whether on the facts and in the circumstances of the case and in law, the Tribunal was justified in allowing deduction of interest paid 2 itxa2620-10 amounting to Rs.1,34,61,176/- being interest paid on borrowings made for purchase of debentures held as investments from interest earned from income tax refund even though such interest expenditure was not laid out or expended wholly and exclusively for the purpose of earning income chargeable under the head 'income from other sources' as required by Section 57 of the Income Tax Act ? (D) Whether on the facts and in the circumstances of the case and in law, the Tribunal was right in allowing the claim of the assessee company of a deduction u/s.80M of the Income Tax Act amounting to Rs.3,15,021/- even though the dividend was distributed after 01/04/2003 and provisions of Section 115O(5) of the Income Tax Act were applicable to the assessee company ? 2. As regards question (A) is concerned, counsel for the parties state that the question is answered against the revenue by the decision of the Apex Court in the case of T.R.F. Ltd. V/s. CIT reported in [2010] 323 ITR 397 (SC). Accordingly, the said question (A) cannot be entertained. Moreover, in the present case, there is a finding of fact recorded by the Tribunal to the effect that the amount claimed as bad debts were in fact offered to tax in the earlier assessment years. Accordingly, the said question (A) cannot be entertained. 3. As regards question (B) is concerned, counsel for the parties state that the said question is answered against the revenue by the decision of the Apex Court in the case of CIT V/s. Alom Extrusions Ltd. reported in [2009] 319 ITR 306 (SC). Accordingly, question (B) cannot be entertained. 3 itxa2620-10 4. As regards question (C) is concerned, the finding of fact recorded by the Tribunal is that the assessee had borrowed certain amount and utilized the same for making investments in zero coupon unsecured debentures from the secondary market. The Tribunal has recorded a finding of fact that zero coupon unsecured debentures were reflected as investments in the balance-sheet. The Tribunal following the decision of the Apex Court in the case of CIT V/s. Rajendraprasad Moody reported in 115 ITR 519 (SC) held that the expenditure incurred by the assessee was wholly and exclusively for the purpose of making investment and was, therefore, allowable. We see no reason to take a contrary view in the facts of the present case. In this view of the matter, question (C) cannot be entertained. 5. As regards question (D) is concerned, counsel for the parties state that the said question stands answered against the revenue by the decision of this Court in Income Tax Appeal No.1557 of 2007 [The Commissioner of Income Tax V/s. M/s. Castle Investment & Inds. P. Ltd.] decided on 22nd July, 2008. In this view of the matter, question (D) cannot be entertained. 6. In the result, the appeal is dismissed with no order as to costs. (A.A. SAYED, J.) (J.P. DEVADHAR, J.)