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TMI Blog1980 (8) TMI 110X X X X Extracts X X X X X X X X Extracts X X X X ..... able @ 12 per cent from 5th Aug., 1954 to 25th Feb., 1965 Rs. 62,000. On the basis of the report of the Commissioner, a decree was passed by the Sub-ordinate Judge on 16th April, 1965 whereby the assessee was to receive a sum of Rs. 80,000 from the other partners in full settlement of his claims provided it was paid before the end of June, 1965, other wise he would be entitled to the entire sum of Rs. 1,10,949 with 6 per cent interest from the date of the decree. Other partners failed to pay the sum of Rs. 80,000 before the due date and as such, the assessee became entitled to the full amount of Rs. 1,10,949 with interest. 2. On the above facts, the question that came up for consideration is regarding assessability of the interest, which the assessee has to receive as per decree of the Court for the asst. yr. 1966-67 (for which the accounting year is Dewali year ending 23rd Oct., 1965). The assessee claimed that the interest is taxable according to the year in which it relates. In other words, the assessee claimed that the interest should be spread over the period for which the interest is payable. Accordingly, he offered only a sum of Rs. 5,138 as relatable to this year. This ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t come to the aid of the Revenue: (2) Assuming that s. 150(1) applied, s. 140(2) comes to the rescue of the assessee in as much as the inclusion of this amount could not have been made on the date when the original assessment order was passed; (3) Notice under s. 147(a) was served without mentioning the status and, therefore, the proceedings are vitiated; (4) That the inclusion of sum of Rs. 62,000 is not proper even on merits; (5) The house property income was recomputed and this could not be done since the assessment was reopened only for a specific purpose under s. 150(1); and (6) Levy of interest under s. 139(8) is not correct. 4. All these contentions have been resisted by the ld. Departmental Representative. He relied on the order of the Tribunal and contended that the question before the Tribunal was whether the interest income is liable to be included wholly or it should be spread over and if that is so, the Tribunal was entitled to record the finding as it did. In other words, he pleaded that the finding of the Tribunal was absolutely necessary for the disposal of the appeal. The ld. Departmental representative contended that s. 150(2) cannot stand in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to no one else, a finding that it belongs to B or does not belong to B would be determinative of the issue whether it can be taxed as A's income. A finding respecting B is intimately involved as a step in the process of reaching the ultimate finding respecting A. If, however, the finding as to A's liability can be directly arrived at without necessitating a finding in respect of B, then a finding made in respect of B is an incidental finding only. It is not a finding necessary for the disposal of the case pertaining to A." Applying the above principles, let us see whether the Tribunal, while disposing of the assessee's appeal had to record a finding regarding inclusion of the entire interest. Recapitulating the facts what we find is that the question that came up for consideration before the Tribunal was whether the interest which was determined by the decree of the Court accrued to him and if so when. The assessee's plea was that since the interest related to a number of years., it must be spread over. The stand of the Revenue, on the other hand, was that the interest accrued when the Court determined the same. It is that question that the Tribunal had to examine. It was, there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment at all in which case alone there could be an assessment. We are, therefore, essentially governed by a case. Where there is a reassessment, the assessment having been originally made. Sub-s. (2) prohibits any assessment, re assessment or recomputation if such assessment, reassessment or recomputation is barred by time on the date when the assessment order was made. The arguments of Mr. Santhanam are not acceptable for the simple reason that if that is accepted, it would not cover a case of assessing an income of an assessee for the same year on the basis of any direction or the appellate authority. To understand this aspect, a little more elucidation may be necessary. The assessee was assessed by the assessment order dt. 29th March, 1972. On that date, the ITO could have assessed the entire interest. Then the reassessment was sought to be made by virtue of the direction of the Tribunal. Therefore, the assessee can never plead the limiting provision of sub-s.(2). We do not think that the construction sought to be put forth by Mr. Santhanam can be accepted. Further what the sub-section contemplates is that if there is no assessment at all made in a given case for a particul ..... X X X X Extracts X X X X X X X X Extracts X X X X
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