9911796707
TMI Blog2000 (1) TMI 152X X X X Extracts X X X X X X X X Extracts X X X X ..... its appeal and not with regard to the issues raised in the revenue's appeal. As such, the revenue's appeal cannot be deemed to have been withdrawn in view of the certificate issued by the Commissioner of Income-tax admitting, the declaration in respect of the assessee's appeal. 4. Since the question of maintainability of the revenue's appeal in view of the certificate granted by the CIT under KVSS has been raised before us as a preliminary objection, we would prefer to adjudicate this objection before dealing with the merits of the case. 5. In support of his contention Mr. Mehta has relied on the judgment of the Delhi High Court in the case of All India Federation of Tax Practitioners v. Union of India [1999] 236 ITR 1/[1998] 101 Taxman 401 and the judgment of the Andhra Pradesh High Court in the case of Dr. Mrs. Renuka Datla v. CIT [1999] 240 ITR 463/107 Taxman 143. Our attention was also invited to the scheme introduced by the Finance (No. 2) Act, 1998 and the press note/release issued by the CBDT. Mr. Mehta has emphatically argued that the Hon'ble High Court of Delhi has struck down the proviso to section 92 of the Finance (No. 2) Act, 1998, according to which the assessees ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cally be deemed to have been withdrawn alongwith the assessee's appeal though the issues in both the appeals are different, cannot be accepted. 7. On consideration of the rival submissions and from a perusal of the Kar Vivad Samadhan Scheme introduced by the Finance (No. 2) Act, 1998 and the aforesaid judgments, we find that the said scheme was introduced to afford an opportunity to the assessee to get their disputes settled with some relaxation. Since the consequential effect of the aforesaid judgment of Delhi High Court has been interpreted by both the parties in their own fashion for giving effect to the KVSS, we feel it proper to reproduce the relevant section, which was effected by the aforesaid judgment :--- "92. Appellate authority not to proceed in certain cases.--- No appellate authority shall proceed to decide any issue relating to the disputed chargeable expenditure, disputed chargeable interest, disputed income, disputed wealth, disputed value of gift or tax arrear specified in the declaration and in respect of which an order had been made under section 90 by the designated authority or the payment of the sum determined under that section : Provided that in case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gone in appeal before the appellate authorities and have not paid the tax. The intention of the Legislature can very well be viewed from the phraseology used in the definition of 'tax arrears' and the introduction of proviso to section 92 of the Act. The anamolies in the scheme were noticed by the Hon'ble High Court of Delhi. While dealing with the vires of KVSS, 1998, and their Lordships of the Delhi High Court have removed the discrimination between the assessees, one who is prosecuting the litigation and the other who is defending before the appellate authorities by declaring the proviso to section 92 of the Act as ultra vires and modifying the definition of 'tax arrears' in clause (m) of section 87 of the Act. Consequent to the judgment of the Delhi High Court, a press release was issued by the CBDT on 26-11-1998 accepting the verdict of the Delhi High Court. Subsequently, a letter dated 17-12-1998 containing procedural instructions was issued to all the Chief Commissioners of Income-tax and Director General of Income-tax. A copy of the same is placed on record. After this press release, the assessees in the revenue's appeal, though they have been granted relief by the first ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the authorities below and the documents placed on record. 11. It is noticed from the order of the CIT(A) that the assessee has purchased some FDRs for obtaining letter of credit for making the purchases from Bharat Aluminium Corporation and Calcutta Mint. On these FDRs the assessee has earned interest income of Rs. 4,14,950. This interest income was considered to be the income from other sources and deduction under sections 80HH and 80-I was not allowed by the Assessing Officer, but the CIT(A) allowed the deduction under sections 80HH and 80-I of the Act on the interest income after treating the same as directly related to the business of the assessee. 12. The findings of the CIT(A) are challenged by the revenue with the submission that the interest income may be treated as business income but it cannot be treated as income from industrial undertaking for allowing deductions under sections 80HH and 80-I of the Act in view of the judgment of the jurisdictional High Court in the case of CIT v. Paras Oil Extraction Ltd. [1998] 230 ITR 266/96, Taxman 234 (MP) and CIT v. Pandian Chemicals Ltd. [1998] 233 ITR 497 (Mad.). In support of his contentions, the ld. Departmental Represent ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
