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TMI Blog1999 (2) TMI 61X X X X Extracts X X X X X X X X Extracts X X X X ..... on treasury bills is assessable as income from business and not as 'interest on securities' consequently it is necessary to apportion the expenses by way of salaries and perquisites for purposes of section 40A(5) of the Act ? 2. Whether, on the facts and in the circumstances of the case the Tribunal was right in law in holding that the expenses incurred on the repairs and maintenance of the flats owned by and/or taken on lease by the company ought to be considered as perquisites for the purposes of computing the disallowance under section 40A(5) of the Act ?" At the instance of the Revenue : "3. Whether, on the facts and in the circumstances of the case, having regard to the admitted fact that the assessee's method of accounting was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot be included in the assessee's income. However, relying upon the judgment of the Kerala High Court in State Bank of Travancore v. CIT [1977] 110 ITR 336, since upheld by the Supreme Court in State Bank of Travancore v. CIT [1986] 158 ITR 102, the Department sought reference which was opposed by the assessee. The assessee relied upon the judgment of the Bombay High Court in CIT v. Central Bank of India'. In the light of different views held by different High Courts the Tribunal referred the above question No. 3 to this court for opinion. Learned counsel for the assessee, however, contended that in view of the circular bearing No. 201/21/84-ITA-II dated October 9, 1984, interest on doubtful debts cannot be charged to tax. He contended ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on behalf of the assessee. After considering the judgment of the Supreme Court in K. P. Varghese's case [1981] 131 ITR 597 which has followed the judgment of the Constitution Bench of the Supreme Court in Navnit-Lal C. Javeri's case [1965] 56 ITR 198, the apex court came to the conclusion that the circulars issued by the Board cannot detract from the provisions of the Income-tax Act. In this connection, the Supreme Court observed at page 134 as follows : "Shri Salve has made heroic efforts to satisfy us that the majority view may be taken as per incuriam inasmuch as it had not applied its mind to the effect of some circulars issued by the concerned authorities as empowered by section 119 of the Act. This is sought to be brought home to us ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ration's case [1994] 2 10 ITR 129 in which it has been laid down following the judgment of the Supreme Court in State Bank of Travancore's case [1986] 158 ITR 102 (SC) that the circulars cannot override or detract from the provisions of the Act inasmuch as section 119 has empowered the Central Board of Direct Taxes to issue orders, instructions or directions for the proper administration of the Act. In Kerala Financial Corporation's case [1994] 210 ITR 129 (SC), on the above point, the Supreme Court has observed at page 135 as follows : "Shri Salve would, however, urge that a little different view of the matter had been taken by a two-judge Bench of this court in K. P. Varghese's case [1981] 131 ITR 597, in which it was observed at page 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act is concerned, inasmuch as what section 119 has empowered is to issue orders, instructions or directions for the 'proper administration' of the Act or for such other purposes specified in sub-section (2) of the section. Such an order, instruction or direction cannot override the provisions of the Act ; that would be destructive of all the known principles of law as the same would really amount to giving power to a delegated authority to even amend the provisions of law enacted by Parliament. Such a contention cannot seriously be even raised. The result is that we follow and affirm the view taken by the majority by this court in State Bank of Travancore v. CIT [1986] 158 ITR 102 and hold that the interest which had accrued on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the circumstances, the High Court refused to go into the decision of the Supreme Court in Kerala Financial Corporation's case [1994] 210 ITR 129. In any event, we do not agree with the view taken by the Punjab and Haryana High Court that there is conflict of opinion between the decisions of the Supreme Court. As stated hereinabove, the decision in Navnit Lal C. Javeri's case [1965] 56 ITR 198 (SC) was specifically considered by the Supreme Court in K. P. Varghese's case [1981] 131 ITR 597 which in turn was specifically considered by the Supreme Court in Kerala Financial Corporation's case [1994] 210 ITR 129. In the circumstances, the doctrine of per incuriam is not applicable in this case. In the circumstances, we are clearly of the opi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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