9911796707
TMI Blog1988 (7) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... o. Ltd., is a company incorporated in the United Kingdom and it carries on business in India having branches in Calcutta and Bombay. The Calcutta office acts as agent for various tea and steamer companies incorporated outside India as also for other overseas principals. The Bombay office acts as agent for Lloyds' insurance companies and steamer companies. Both the offices deal in sundries, electrical and other goods. The Bombay branch has in the course of its business advanced in 1963 a sum of Rs. 7.50 lakhs to Speciality Papers Ltd. for whom it was appointed as selling agents. The interest due on this advance was credited to the profit and loss account of the Bombay branch till December 31, 1967. The debtor-company had not paid any interes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax for the assessment year 1969-70, the Income-tax Officer included Rs. 57,234 stating as follows : "Interest credited in the interest suspense account charged on the When the assessee went up in appeal before the Appellate Assistant Commissioner, it was contended before him on behalf of the assessee that it had furnished all particulars and that no new information came to the knowledge of the Income-tax Officer after the original assessment was completed. Thus, it was urged that the Income-tax Officer had no jurisdiction to "reopen the assessment. The Appellate Assistant Commissioner rejected the contention of the assessee, holding as follows: 'I have looked into the facts. It is seen that the assessment has been reopened under secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re, we cannot hold and suggest that the earlier Income-tax Officer did not consciously apply his mind while putting his mark in the account." According to the Tribunal, if such a view is held, it would follow as consequence that the proceedings under section 147(b) are not according to law. Hence, the Tribunal cancelled the impugned order under section 147(b) of the Act. The Tribunal proceeded on the basis that interest income was not true income and accordingly it did not accrue to the assessee. It appears that for the assessment year 1970-71, in the case of the assessee, question was referred to this court whether the Tribunal was right in holding that the interest due from Specially Papers Ltd. was includible in the assessment year 197 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 71. It is only in the assessment year 1970-71 that the assessee stated that it decided to adopt the cash basis for the interest payable by Speciality Papers Ltd. and that is why it was kept in the suspense account. This fact was not stated in the original assessment. As matter of fact, in the subsequent year, i.e., 1970-71, this court, as indicated earlier, said that the interest was includible in the assessment, being the real income of the assessee. On the facts, it could not be said that there was no chance of realisation of interest. If it could not have been written off in the subsequent year, it follows that in the earlier year also interest ought to have been included as the income of the assessee. We are of the view that the Income- ..... X X X X Extracts X X X X X X X X Extracts X X X X
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