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TMI Blog1993 (5) TMI 21X X X X Extracts X X X X X X X X Extracts X X X X ..... umstances of the case, the Tribunal was justified in holding that the interest accrued on debts difficult to realise cannot be treated as income of the assessee though it adopted the mercantile system of accounting for the relevant assessment year ; and (iii) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that non-filing of the statement of estimate does not mean that payment made by the assessee was not advance tax in view of the specific provisions contained in section 209A(1)(a) of the Act ? " The assessee is a financial corporation set up under the State Financial Corporations Act, 1951 (in short, "Corporation Act"). It follows the financial year as its period of accounting. Origina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder of the Income-tax Officer was held to be erroneous and prejudicial to the interests of the Revenue. Consequentially, the Commissioner directed enhancement of interest income by Rs. 1,31,885 and disallowance of interest amounting to Rs. 1,66,196 granted under section 214 of the Act. On appeal, the Tribunal observed that, by its earlier order dated October 7, 1980, for the assessment years 1974-75, 1975-76 and 1976-77 in Income-tax Applications Nos. 95, 96 and 97 (CTK) of 1980, it had directed exclusion of interest on doubtful debts from the computation of total income. The said order was available to the Income-tax Officer when he made the draft assessment order and also to the Inspecting Assistant Commissioner when he gave directions t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was made without proper enquiry when some further enquiry was called for. According to Mr. Ray, learned counsel for the Revenue, non-disclosure by the Income-tax Officer and the Inspecting Assistant Commissioner about the order of the Tribunal and non-discussion about taxability shows non-application of mind and failure to cause enquiry which was warranted. Mr. Mahanti, for the assessee, however, submitted that there being no dispute that the earlier order of the Tribunal was both before the Income-tax Officer and the Inspecting Assistant Commissioner, it is evident that they had considered the effect of the order and being bound by it had not specifically referred to matters concluded by the Tribunal in the earlier order. The Calcutta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal concluded that it was not proper to hold that the amount did not represent advance tax only for the purpose of section 214. It noticed that the assessee paid the amount when nothing was due from him by using a challan prescribed for payment of advance tax. It observed that the mere fact that an estimate or a statement did not accompany the said payment did not mean that the amount was anything other than advance tax. Reliance was placed on a decision of the Bombay High Court in CIT v. Traub (India) P. Ltd. [1979] 118 ITR 525 to buttress the view. We are in agreement with the view expressed by the Tribunal because of the fact situation depicted by it. In conclusion, we are of the view that the Tribunal was justified in cancelling ..... X X X X Extracts X X X X X X X X Extracts X X X X
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