- (1.) Present appeal under section 260-A of the Income Tax Act 1961, has been preferred against the judgment and order dated 28.12.2007 passed by the Income Tax Appellate Tribunal, Lucknow in ITA No.211/Luc/2006 and Cross Appeal No. ITA 245/Luc/2006 for the Assessment Year 2002-03.
(2.) On 30.06.2008, a Coordinate Bench of this Court has admitted the appeal on the following substantial questions of law: i. Whether the interest on unsecured loan granted by the Government was covered by Section 43 B or not as per the ratio laid down by the Hon'ble Apex Court in New India Mining Corporation vs. CIT, 2000 243 ITR 640. ii. Whether on the facts and in the circumstances of the case, the spares can be capitalized and depreciation claimed on it even when they are not used and thus merit allowance u/s 32 and whether a company can take cover under AS-2 even when dis allowance is warranted u/s 32. iii. Whether on the facts and in the circumstances of the case the Income Tax Appellate Tribunal is justified in law in deleting the addition towards short provision of interest on Government loan for Financial Year 2001-02 and towards short provision of DA arrears of employes when dis-allowance was made as these amounts were not actually paid by the assessee before the prescribed date and the assessee failed to verify with the documentary evidence that these expenses had not been claimed in any other year.
(3.) The brief facts of the case are that the assessee, a wholly owned undertaking of U.P. Government, is engaged in the business of generation of electricity in the State of U.P. For the assessment year under consideration, the assessee has filed the loss return, which was scrutinized by the A.O. under Section 143 (3) of the Act and made the additions, which were deleted by the First Appellate Authority as well as by the Tribunal. Still not being satisfied, the department has filed the present appeal.;