- (1.) This appeal arises against the order of the Income-tax Appellate Tribunal passed in December, 1998, in I. T. A. No. 4 (Alld.) of 1991 in relation to the assessment year 1986-87. The proceedings were taken against the assessee on the return being filed declaring the chargeable profits under the Companies (Profits) Surtax Act, 1964, at Rs. 1,03,950 filed on March 18, 1989. It was in response to the notice issued under Section 8(a) of the Companies (Profits) Surtax Act, 1964.
(2.) The Deputy Commissioner of Income-tax calculated the surtax at Rs. 32,41,000. Against the decision of the Deputy Commissioner of Income-tax, the Department preferred three appeals under Section 6(2) of the Surtax Act. The appeals for the assessment years 1984-85 and 1985-86 were dismissed and for the assessment year 1986-87 it was partly allowed. The Department preferred a ST Appeal No. 4 of 1987, in respect of the assessment year 1986-87 on the ground that the appellate authority was not justified in directing the assessment of the assessee as per the order of the Commissioner of Income-tax (Appeals) and has worked out the charge of disputed amount at Rs. 84.44 lakhs only. The Tribunal had held that the interest on the sticky loans is not includible for the purpose of computing income-tax and it cannot be included for the purpose of said tax. This order of the Tribunal has been challenged in the present appeal.
(3.) We have heard Sri Shambhu Chopra, learned standing counsel for the appellant, and Sri S. K. Garg, learned counsel for the respondent.;