- (1.) ALL the three appeals have been filed by the Department against the consolidated impugned order dated 26.8.2004, passed by the Income Tax Appellate Tribunal, New Delhi in I.T.A. Nos.2518, 2519 & 2520(Del) of 2001 for the Assessment Year 1995 -96; 1996 -97 & 1997 -98.
(2.) ON 1.10.2007, a coordinate Bench has admitted the appeals on the following substantial questions of law: - "(i) Whether on the facts and in the circumstances of the case, the I.T.A.T. have erred in law in holding that the unabsorbed business loss of the Unit namely M/s Meerut Oil and Chemicals (Pvt.) Ltd. Could be set off against the income of other Unit M/s Translam Ltd. and the said finding is not against the proviso below Clause (i) of the Sub Section (1) of the Section 72 of the Act? (ii).Whether on the facts and in the circumstances of the case, the I.T.A.T have erred in holding that the interest on borrowed capital used for Capital -work -in progress was deductible and the said finding is not against the Explanation 8 to Section 43 of the Act? (iii). Whether on the facts and in the circumstances of the case, the I.T.A.T. have erred in deleting the trading addition of Rs.98,23,891/ - made by the A.O. one the basis of defects in the books of account and comparable case -
(3.) WE have heard the learned counsel for the parties at length and perused the material available on record. The facts related to the filing of the appeals are that the assessee company was incorporated on 29.11.1988. The assessee company took over the assets and liabilities of M/s Meerut Oil and Chemicals (Pvt.) Limited, for consideration of Rs.68 lakhs. It started commercial production of edible refined oil during the financial year 1992 -93. As there was loss, so, the Unit was leased out to M/s Ratan Fats Pvt. Limited, as per the agreement dated 19.11.1993 @ of Rs.1,12,500/ - per annum. On 31.8.1994, the assessee company has entered into an agreement with M/s Mohit Kumar Jain and sons for purchase of assets, for consideration of Rs.1.24Cr.;