- (1.) The subject matter of challenge is a judgment and order dated September 7, 2007, passed by the Income Tax Appellate Tribunal, D -Bench, Kolkata, pertaining to assessment year 2003 -04, in appeal being ITA No.1420/Kol/2007, by which the Tribunal partly allowed the appeal preferred by the assessee.
(2.) It may be mentioned that in respect of the self -same assessment year challenging the order of the CIT(A), the revenue has also preferred an appeal, which was registered as ITA No.15 of 2008 which we disposed of today by a separate judgment.
(3.) The questions formulated at the time of admission of the appeal are as follows: (i) Whether the Tribunal was justified in law in upholding the disallowance of Rs.48,21,901/ - out of the interest expenditure incurred by the appellant for the purposes of its business and allowable under section 36(1)(iii) of the Income Tax Act, 1961, and its purported findings in that behalf are arbitrary, unreasonable and perverse (ii) Whether on a true and proper interpretation of the agreements dated October 8, 2002 and December 19, 2002 and the provisions of sections 2(42C) and 50B of the Income Tax Act, 1961, the Tribunal was justified in law in upholding the direction of the Commissioner of Income Tax(Appeals) to compute the capital gains in respect of each tea estate sold by the appellant as a whole and not with reference to the individual assets comprised in the said tea estate (iii) Whether, on a true and proper interpretation of the provisions of section 2(11), 43(6)(c) and 50 of the Income Tax Act, 1961, the short term capital gains upon sale of the plant and machinery of the two tea estates was to be determined by reducing the sale consideration from the written down value of the block of plant and machinery of all the tea estates and not only the written down value of the plant and machinery of the tea estates sold The facts and circumstances pertaining to the questions nos.2 and 3 are as follows.;