2016 (12) TMI 417

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..... ed Counsel for the department and Sri Ashish Bansal, learned Counsel for the assessee This is an appeal filed by the department under Section 260-A of the Income Tax Act, 1961 for the assessment year 1992-93 against the order of the Tribunal dated 31.03.2005. The substantial questions of law sought to be answered are hereunder:- "1. Whether on facts and in the circumstances of the case, the Inc .....

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..... e was following cash system of accounting?" The facts of the case are that by the Finance Act, 1991 the State Financial Institutions became liable to interest tax on interest receivable from 01.10.1991. The amendment, which was brought on record is quoted hereunder:- "Notwithstanding anything contained in sub section (1) but subjet to the other provisions of this act, there shall be charged on .....

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..... rest tax is also collectible from the clients. It is confirmed by the assessee that no interest tax has been collected by it for the period prior to 1.10.1991. We, therefore, hold that even if the interest for the earlier period was collected after 1.10.1991, no interest tax was liable on the interest pertaining to the period when the assessee was not liable to interest tax. For the sake of repeti .....

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