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TMI Blog2006 (8) TMI 137X X X X Extracts X X X X X X X X Extracts X X X X ..... t of interest, which had accrued to the applicant on the FDR is liable to be taxed – Whether, Tribunal was justified in law in holding that the income from Nainital property and from furniture and fixtures therein as leased out to the State Bank of India for use of the training centre was income from house property and not income from business or income from other sources, as alleged by the assessee? – this question is answered in affirmative, i.e., in favour of the assessee - - - - - Dated:- 24-8-2006 - Judge(s) : R. K. AGRAWAL., VIKRAM NATH. JUDGMENT The Income-tax Appellate Tribunal, Allahabad, has referred the following questions of law under section 256(2) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the break-up of which is given below: Rs. (1) Market value of the undertaking on the date of take over excluding nonfixed assets 56,50,000 (2) Solatium at 10% on above 5,65,000 (3) Value of stores and other sundry items taken over on the date of takeover 5,00,000 Total 67,15,000 Less: Paid by the Electricity Board and 38,69,000 adjustments Balance amount payable by the Electricity 28,46,000 Board to Shree Pateshwari Electrical and Associated Industries Private Ltd., Balrampur Interest at 6 per cent. on the above balance 15,36,000 amount calculated up to May 13, 1973 Grand total to be paid by the Electricity 43,82,000 Board The arbitrators also held in the said award that further interest will accrue at 6 p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plea that in case the applicant loses the case in the hon'ble Supreme Court, it will have to pay interest at 6 per cent. on the amount received by it from the Electricity Board. The Assessing Officer did not accept the applicant's contention on the ground that the applicant was under no obligation to pay the interest and nor any such order had been passed by the hon'ble Supreme Court while granting stay. In fact, the payment of interest on the amount received by the applicant depended on the final order of the hon'ble Supreme Court and that too in case the Electricity Board succeeds in its appeal. Consequently, the Assessing Officer included the total interest, that is, the balance 6 per cent. as well which was not returned by the applic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rooms of the building and it amounted to exploitation of the building commercially and thereby the income should be treated as income from business. Efforts to seek the assistance of PICUP and., attempts at subsequent conversion of the said premises into a hotel should be treated to be an effort of the applicant to exploit the premises commercially. The said contention of the applicant was not accepted by the Assessing officer on the ground that the building has not been converted into a hotel and nor can it be said that the rent was a compensation paid by the State Bank of India for use of only certain rooms for certain period. In fact, emphasis was laid by the Assessing Officer on the lease deed executed by the State Bank of India in fav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty as a deduction in a particular year, the liability should be an ascertained one and should not be dependent on any contingency in future. This is the position in claiming deduction regarding liability in the present case. We find that there is no liability for payment of interest by the applicant in the assessment years in question. The Tribunal has rightly held that the entire amount of interest, which had accrued to the applicant on the FDR is liable to be taxed. We, accordingly, answer the first question referred to us in the affirmative, i.e., in favour of the Revenue and against the assessee. So far as the second question is concerned, a similar question came up for consideration before this court in the case of the applicant itse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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