Case: Commissioner of Income Tax Vs. Tata Chemicals Limited

3.The facts leading to this appeal and grounds raised therein are asrespondent is a public limited company engaged in the manufacture of chemicals, salt and detergents in its factories. One of such manufacturing unit is at Mithapur in Gujarat. Subsequently it set up is a subsidiary company known as "Tata Fertilizers", but this subsidiary company amalgamated with the respondent under the order of this Court passed on a company application on 7th September, 1989. The respondent thereafter set up a fertilizer plant at Babrala in State of U.P. Certain deductions were claimed by the respondent for the assessment yearThe Assessing Officer disallowed some of the deductions claimed, particularly those under sections 36(1)(iii) and 37(4) of the Act.4.Being aggrieved by the order of the Assessing Officer passed on 24th March, 1995, an appeal was preferred by the respondent. The same came to be dismissed by the Commissioner of Income Tax (Appeals) by his order dated 27th March, 1996.5.Being aggrieved therefrom, an appeal was preferred to the Income Tax Appellate Tribunal which has come to be allowed.6.Being aggrieved by that order dated 14th January, 1999 this appeal is filed by the appellant.

Reasoning:
In the present case, we do not find that this issue had been raised before the Tribunal. It is also not the case of revenue that the issue or question was raised but not decided by the Tribunal. In the circumstances, we do not propose to dwell on this question.Question (b)It is in these circumstances that the deduction under the particular section was held allowable.11.The Tribunal has come to the conclusion that the decisive test is the unity of control which is indicated byon between the businesses and dovetailing of one into the other. In the present case, it is quite clear that the amalgamation of the subsidiary was allowed by the High Court. Thereafter it is for the management of the company to manage its affairs and the benefit which would be available for the borrowings done for a unit would certainly be claimable by the company as such. Section 36(1)(iii) which permits the amount of interest paid in respect of capital borrowed for the purposes of the business will have to include the borrowing for a unit of the company which is what the fertilizer unit at Babrala is. Considering the fact that finding is based on appreciation of evidence brought on record, we do not find that this question can be said to be question of law warranting adjudication by this Court. In view of what is observed hereinabove, the questions of law raised in at (b) and (h) do not arise for our consideration.Question (f)these circumstances, the resolution of this question was based on facts since Tribunal has recorded finding of fact that the investment in question was a business investment. We do not find that this ground raises any substantial question of law favour consideration. This question sought to be raised therefore needs no consideration.Question (j)this para makes it clear that the Tribunal was following the judgment of the Tribunal in 61 I.T.D. 129 and the contention against the disallowance had not been pressed. Since the contention of disallowance was not pressed, the same has not been dealt with by the Tribunal. Hence question sought to be raised does not arise from the judgment of the Tribunal.14.For reasons stated above, we do not find any merit in this appeal.