- (1.) This appeal under section 260A of the Income-tax Act, 1961 (for short ''the Act'') has been filed by the assessee against the order dated 24-5-2010, passed by the Income-tax Appellate Tribunal Chandigarh Bench 'A', Chandigarh (in short ''the Tribunal'') in ITA No. 146/Chandi./09, relating to the assessment year 2006-07.
(2.) The following substantial questions of law have been claimed for determination of this Court: (a) Whether on the facts and circumstances of the case, the Tribunal acted illegally and perversely, in holding that the interest of Rs. 9,05,976 paid by the appellant on Term Loan raised for acquiring asset in its existing business is disallowable in view of proviso to section 36(1)(iii) of the Act? (b) Whether on the facts and circumstances of the case, the Tribunal acted perversely in interpreting the words 'Expansion and Extension' as synonymous in spite of the fact these two words have been used in the different sections separately and carry different meaning? (c) Whether on the facts and circumstances of the case, the Tribunal acted perversely and illegally in holding that increase in spindle capacity in appellant's Unit is extension of business?
(3.) The facts, in brief, necessary for adjudication as narrated in the appeal, are that the assessee raised a term loan of Rs. 30,61,00,000 from Canara Bank, and another sum of Rs, 7,98,00,000 from the Punjab National Bank for acquisitioning the assets for its existing business and paid interest on the term loan so raised. The assessee claimed the amount of interest paid as revenue expenditure under section 36(1)(iii) of the Act. For the assessment year in question, the assessee filed its income-tax return at the total income of Rs. 33,86,25,911. The Assessing Officer, however, vide order dated 21-1-2008, computed the total income of the assessee at Rs. 34,07,33,922 by making disallowance of some amounts including the amount paid as interest.;