2018 (3) TMI 56 - SC - Income Tax

Accrual of income - interest on inter corporate deposits - Decision of HC 2010 (11) TMI 88 - Delhi High Court challenged - Held that - the consideration of the question has been given a full and meaningful reasoning and we agree with the same. - SC dismissed the revenue appeals. HC has held that, The assessee-company being NBFC is governed by the provisions of the RBI Act. In such a case, interest income cannot be said to have accrued to the assessee having regard to the provisions of section 45Q of the RBI Act and Prudential Norms issued by the RBI in exercise of its statutory powers. As per these norms, the ICD had become NPA and on such NPA where the interest was not received and possibility of recovery was almost nil, it could not be treated to have been accrued in favour of the assessee.

Summary

Issues:
1. Consideration of the question in the impugned judgment.
2. Error apparent in the judgment regarding segregation of facts by the High Court.

Analysis:

1. The Supreme Court, comprising Mr. Rohinton Fali Nariman and Mr. Navin Sinha, JJ., reviewed multiple civil appeals, including Civil Appeal No. 5813 of 2012, 998 of 2013, 2450 of 2017, 2449 of 2017, 4555 of 2017, 8977 of 2017, 18059 of 2017, and others. After examining the impugned judgment in these appeals, the Court found that the consideration of the question had been adequately addressed with full and meaningful reasoning. Consequently, the Court decided to dismiss all the mentioned appeals based on their assessment of the judgment.

2. In the specific case of Civil Appeal No. 998 of 2013 and SLP(C) No. 28678-28682 of 2017, the appellant's counsel raised a concern regarding an error apparent in the judgment. The counsel argued that the facts of this case were similar to those of other cases, but the High Court had incorrectly segregated this case and claimed the facts were different. Acknowledging this contention, the Court allowed the appellant to file a review petition before the High Court. The Court stipulated that if the review petition was submitted within four weeks from the date of the judgment, the High Court would assess it on its merits.

This comprehensive analysis covers the issues raised in the legal judgment, detailing the Court's findings and directives concerning the impugned judgment and the specific error apparent in the segregation of facts by the High Court in one of the appeals.