Court affirms tax decisions, no new queries raised. 100% depreciation and interest relief issues resolved.

The Court upheld the decisions of the Commissioner of Income-tax and the Tribunal, concluding that no referable question necessitated an answer from the Court. As a result, both reference applications were rejected. The first issue regarding entitlement to 100% depreciation on shuttering material was settled based on precedent. The second issue of disallowance of interest relief due to inadequate charging from a sister concern was resolved in favor of the assessee, as the loan was sourced from the firm's own capital without external borrowing, supported by relevant case law.

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Issues:
1. Entitlement to 100% depreciation on shuttering material.
2. Disallowance of interest relief due to inadequate charging from sister concern.

Analysis:
1. The first issue pertains to the entitlement of the assessee to 100% depreciation on shuttering material. The matter was previously addressed in the case of Harijan Evam Nirbal Varg Avas Nigam Ltd. v. CIT (1998) 229 ITR 776 (All), where it was established that the assessee is entitled to such depreciation. Consequently, the court found no question requiring reference on this point.

2. Moving on to the second issue regarding the disallowance of relief amounting to Rs. 21,100 due to charging inadequate interest from the sister concern, M/s. Poonam Biscuits, the Assessing Officer contended that the excess interest should be treated as income of the assessee. The assessee argued that the loan to M/s. Poonam Biscuits was not sourced from external loans but from the firm's own capital, amounting to Rs. 54,74,892. Citing the case of CIT v. H.R. Sugar Factory (P) Ltd. (1991) 187 ITR 363 (All), the revenue claimed that the deletion of the interest amount was unlawful.

3. In the case of H.R. Sugar Factory (P) Ltd., it was established that loans advanced to directors at a lower rate than that borrowed by the assessee could be treated as the assessee's income. Similarly, in the present case, it was argued that the firm had sufficient capital to provide the loan to M/s. Poonam Biscuits without external borrowing. The Commissioner of Income-tax and the Tribunal both found the capital availability sufficient and that the loan to the sister concern was not sourced from external loans, leading to the rejection of the reference applications.

4. Various precedents were cited to support the position that when substantial capital and interest-free funds are available with the assessee, interest-free advances to sister concerns are justified. The decisions in CIT v. Tin Box Co. (2003) 260 ITR 637, CIT v. Dalmia Cement (Bharat) Ltd. (2002) 254 ITR 377 (Delhi), and CIT v. India Carbon Ltd. (2001) 247 ITR 510 (Guj) were considered in this context. The courts emphasized that findings of fact were crucial in such matters, and no question of law arose in the present case.

5. Ultimately, the Court upheld the decisions of the Commissioner of Income-tax and the Tribunal, concluding that no referable question necessitated an answer from the Court. As a result, both reference applications were rejected.

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