9911796707
TMI Blog2008 (5) TMI 633X X X X Extracts X X X X X X X X Extracts X X X X ..... fy the requirement of the order being erroneous - The expression prejudicial to the interest of Revenue as understood in its ordinary meaning is of wide import and not confined to the loss of tax alone. If due to an erroneous order of the AO, the revenue is loosing, as lawfully payable by a person, it should be certainly prejudicial to the interest of Revenue [Malabar Industrial Co. Ltd. v. CIT [ 2000 (2) TMI 10 - SUPREME COURT] , Rampyari Devi Saraogi v. CIT [ 1967 (5) TMI 10 - SUPREME COURT] and Smt. Tara Devi Aggrawal v. CIT [ 1972 (11) TMI 2 - SUPREME COURT] . While setting aside the assessment order, the CIT noted that the Income-tax Officer passed the order without any material on record. Admittedly, the Circular has also not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 256(1) of the Income-tax Act, thereinafter referred to (Act), the Income-tax Appellate Tribunal, Chandigarh Bench, Chandigarh, has referred the following questions for our opinion :- (i)Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in law in allowing the assessee s claim regarding interest due on sticky loans? (ii)Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in law in holding that the discount of ₹ 10,050 pertaining to bonds issued up to 31-3-1976 and thus relating to assessment year 1976-77 was allowable in the assessment year 1977-78, the previous year in respect of which ended on 31-3-1977? ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bunal and relying upon its decision rendered with respect to another assessee, namely Punjab Financial Corpn. in ITA No. 144/CHD/1979 (Assessment year 1972-73), the Tribunal set aside the order dated 30-10-1980 passed by the Commissioner in terms of its order dated 23-2-1982 (Annexure C ). The order passed by the Commissioner was held to be without jurisdiction hence the reference in question was made to this Court. 5. Learned counsel appearing for the parties, during the course of hearing, have candidly admitted that while passing the assessment order the Income tax Officer did not take into consideration Circular No. 41(V-6)D of 1952 dated 6-10-1952. The learned counsel for the parties are also in agreement that at the relevant point ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in cases in which 5 or more half-yearly consecutive instalments of principal amounts fall due, the interest accruing from them from the year should not be credited to the interest received account but is taken to the suspense account. This method has been consistently adopted even in the subsequent years . Thus the assessee Corporation was covered by the letter issued by the Central Board of Direct Taxes which was specifically directed by the Appellate Assistant Commissioner to be considered by the Income-tax Officer along with the facts on record of the assessee. The Income-tax Officer complied with the directions but took the precaution while allowing the deduction of interest of ₹ 1,03,286 to note that when this interest is receiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law on the account as well. It is, therefore, cancelled on each of the above accounts. [Emphasis supplied] 9. In its order dated 30-10-1980, the Commissioner has observed as under: The assessment in the case of M/s. Himachal Pradesh Financial Corpn. Ltd., was framed on a total income of ₹ 12,57,274. The Income-tax Officer computed this income in spite of the auditors note that interest on sticky accounts for the year amounting to ₹ 93,383 has not been provided for and after allowing a sum of ₹ 10,050 being liability discount on issue of bonds incurred in earlier years. The Balance Sheet showed that the opening balance of ₹ 1,54,074 in the interest in Suspense Account had only been reduced by a sum of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Assessing Officer, the revenue is loosing, as lawfully payable by a person, it should be certainly prejudicial to the interest of Revenue [Malabar Industrial Co. Ltd. v. CIT [2000] 243 ITR 83 1 (SC), Rampyari Devi Saraogi v. CIT [1968] 67 ITR 84 (SC) and Smt. Tara Devi Aggrawal v. CIT [1973] 88 ITR 323 (SC). While setting aside the assessment order, the Commissioner noted that the Income-tax Officer passed the order without any material on record. Admittedly, the Circular dated 6-10-1952 has also not been considered by the Assessing Officer. In our view, the Assessing Officer failed to apply its mind in its correct perspective and the order passed by him is erroneous. There is no material on record to support the decision arrived ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
