2016 (10) TMI 94 - HC - Income Tax

Receipt of interest - nature of income - Income from Business or Income from other sources - Tribunal holding that receipt of interest from the New Mangalore Fort Trust loans Interest on TDRs and interest on dues from Oil Coordination Committee is liable to tax under the head Income from Business and not under head Income from other sources as held by the Assessing Officer - Held that - Normally we do not entertain an appeal from an order of the Tribunal which merely follows its own earlier order on an identical fact situation particularly when the earlier order has not been subject to challenge before this Court. However in this case one Mr. Joseph Rodrigues Assistant Commissioner of Income Tax has filed affidavit dated 17th June 2016 pointing out that an appeal had been filed to this Court from the order dated 11th December 2003 for Assessment Year 1999-2000. We were informed by Mr. Kotangle learned Counsel for the Revenue states that no attempt was made. Therefore it is evident that the Revenue has accepted the order dated 11th December 2003 passed in Respondent Assessee s own case in respect of Assessment Year 1999-2000. Nothing is stated in the affidavit nor any submission is made as to why in spite of the Revenue having accepted the order dated 11th December 2003 for Assessment Year 1999-2000 the appeal for the impugned order is being filed and persisted with. In the aforesaid circumstances we see no reason to entertain this appeal.

Summary

Issues involved:
Challenge to the order of the Income Tax Appellate Tribunal regarding the taxability of interest income under different heads for the Assessment Year 2001-02.

Analysis:
The High Court dealt with the challenge to the Tribunal's order regarding the tax treatment of interest income received by the taxpayer. The Revenue contended that the interest income should be taxed under the head "Income from Business" rather than "Income from other sources" as determined by the Assessing Officer. The interest income in question included amounts from New Mangalore Port Trust, Term Deposit Receipt, and Oil Coordination Committee. The Tribunal had dismissed the Revenue's appeal on all three interest income items based on its previous order for the Assessment Year 1999-2000 without providing independent reasons. The Court noted that the Revenue had not challenged the earlier order before the Court and highlighted that no attempt was made to restore the appeal related to the previous order. Consequently, the Court found no reason to entertain the current appeal and dismissed it without costs.

In summary, the High Court upheld the Tribunal's decision on the taxability of interest income, emphasizing the importance of challenging previous orders and the lack of effort by the Revenue to contest the earlier decision. The Court's decision was based on the principle that appeals should not be entertained when the party has accepted a previous order without challenge or attempt at restoration.