2019 (4) TMI 859

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.... J. This appeal is at the instance of the Revenue. Challenge is against Annexure C order passed by the Income Tax Appellate Tribunal, Cochin Bench. The assessment is in respect of the assessment year 1996-97. 2. The respondent Assessee Company is engaged in the manufacture and sale of automotive tyres, tubes, etc. Return was filed by the Company on 28.11.1996, which was followed by a revised return. Finally, the assessment was completed in terms of Section 143(3) of the Income Tax Act by the Assessing Officer as per Annexure A order dated 10.01.2002, assessing a total income of Rs. 5,79,77,070/- and fixing the tax liability accordingly. This was sought to be challenged by the Assessee by filing appeal before the Commissioner of Income....

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....e dispute is with regard to the course pursued by the Assessee debiting in its account, under the head 'General Expenses', a sum of Rs. 90 lakhs towards the corporate guarantee given in favour of 'M/s Universal Steel and Alloys Limited', a sister concern. The Bank had enforced the Bank Guarantee, by virtue of which, the Assessee had to pay the said amount to the Bank. This was not recoverable from the sister concern and hence it was written off. It was disallowed by the Assessing Officer, as it was never in the course of business of the Assessee and hence liability was mulcted upon the shoulders of the Assessee. As no substantial relief was given by the Commissioner of Income Tax, the matter was taken up before the Tribunal.....