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TMI Blog2011 (7) TMI 122X X X X Extracts X X X X X X X X Extracts X X X X ..... o taken as foreign investment eligible for concessional rate of tax in the returns filed for the assessment year 1996-97. The assessee made the said claim under section 115H of Chapter XII-A of the Income-tax Act. Originally, the return filed was processed under section 143(1)(a) thereafter, under section 143(3), the assessment order was passed, accepting the claim made under section 115H for concessional levy. However, in exercise of the powers vested under section 263 of the Income-tax Act, the Commissioner of Income-tax issued notice that acceptance of the claim of the assessee under section 115H had resulted in an erroneous assessment prejudicial to the interests of the Revenue and thus the Commissioner of Income-tax sought to revise th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellate Tribunal, which, however, rejected the appeal and thereby confirmed the section 263 order. The Tribunal held that the special treatment given to the interest on foreign investment could not be extended to the interest on interest redeposited with the original sum. Thus it affirmed the view of the Commissioner of Income-tax. Aggrieved by the same, the present appeal has been filed by the assessee. 4. Learned counsel for the assessee pointed out that the benefit available to the assessee in respect of the income derived from the foreign exchange asset would equally be available to the interest earned on the redeposit of interest along with the original investment. Being a beneficial provision, the assessee should have been granted th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ets, namely : (i) shares in an Indian company; (ii) debentures issued by an Indian company which is not a private company as defined in the Companies Act, 1956 (1 of 1956); (iii) deposits with an Indian company which is not a private company as defined in the Companies Act, 1956 (1 of 1956); (iv) any security of the Central Government as defined in clause (2) of section 2 of the Public Debt Act, 1944 (18 of 1944); (v) such other assets as the Central Government may specify in this behalf by notification in the Official Gazette. " 7. Section 115E provides for concessional rate of Income-tax at 20 per cent on the income earned from investment or income from long-term capital gains of an a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g with his return for the assessment year in which he first becomes assessable as a resident seeking such benefit. Secondly, the benefit under this Chapter will continue only in respect of income derived from a foreign exchange asset falling within the definition of "specified assets" as given under section 115C(f)(ii) to (v). Thus so long as the asset retained its character as foreign, each asset retaining the status as specified assets and defined in section 115C(f)(ii) to (v), the income derived therefrom would continue to enjoy the concessional levy under section 115H. 9. As far as the facts in the present case are concerned, the assessee's contention is that as in the case of interest income derived from foreign exchange asset, the in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed interest also would qualify for similar treatment as the income derived from any such foreign exchange asset. Yet he could not get over the fact that unless and until "interest income" has a direct nexus with the foreign exchange asset, the benefit of section 115H could not be extended to him. 12. Thus going by the wording in section 115H, we do not find any ground to accept the assessee's case. Learned counsel for the assessee further made reference to the beneficial Circular No. 4, dated 11-2-1987, of the Reserve Bank of India, in K. Thyagarajan's case (supra), which, in our considered view, does not have relevance to the assessee herein. Given the fact that the section is clear and there is no ambiguity that the levy of concessional ..... X X X X Extracts X X X X X X X X Extracts X X X X
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