COMMISSIONER OF INCOME TAX V. TALINI INVESTMENT PVT. LTD.

ITA/217/1999

AI Insights

The case involves the Commissioner of Income Tax as the petitioner and Talini Investment Pvt. Ltd. as the respondent. The core issue revolves around the correct interpretation of tax laws concerning the interest accrued on debentures. The Income Tax Appellate Tribunal had previously ruled on the matter, but the Revenue sought clarification on specific legal interpretations, which led to the filing of this application. The High Court referenced a similar case (I.T.A. No.10 of 1999) where similar questions were addressed and decided, leading to the decision to direct the Tribunal to refer the questions for a judicial opinion.

• Counselvise Citation: [1999] 140 COUNSELVISE.COM (IT) 677583 (HC-GUJARAT)
• Appeal Type: Others
• Pronouncement Date: 30-08-1999
• Assessment Year: misc
• Other Referred Cases: I.T.A. No.10 of 1999
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: K C PATEL
• Assessee Lawyers: MANISH BHATT
• Keywords: Appellate Tribunal; Debenture; Income Tax; Interest on securities
• Section: 215; 216

Judgement Text

" IN THE HIGH COURT OF GUJARAT AT AHMEDABAD INCOME TAX APPLICATION No 217 of 1999 For Approval and Signature: Hon'ble MR.JUSTICE C.K.THAKKER and MR.JUSTICE A.L.DAVE ============================================================ 1. Whether Reporters of Local Papers may be allowed : NO to see the judgements? 2. To be referred to the Reporter or not? : NO 3. Whether Their Lordships wish to see the fair copy : NO of the judgement? 4. Whether this case involves a substantial question : NO of law as to the interpretation of the Constitution of India, 1950 of any Order made thereunder? 5. Whether it is to be circulated to the Civil Judge? : NO -------------------------------------------------------------- COMMISSIONER OF INCOME TAX Versus TALINI INVESTMENT PVT. LTD. -------------------------------------------------------------- Appearance: MR MANISH R BHATT for Petitioner MR KC PATEL for Respondent No. 1 -------------------------------------------------------------- CORAM : MR.JUSTICE C.K.THAKKER and MR.JUSTICE A.L.DAVE Date of decision: 30/08/1999 ORAL JUDGEMENT 1. We have heard the learned counsel for the parties. 2. In this matter, Rule is already issued on 11th August, 1999 and it is made returnable today. 3. The application is filed by the Revenue for a direction to the Tribunal to refer the following questions for the opinion of this Court :- \"1. Whether the Income Tax Appellate Tribunal is right in law and on facts in holding that interest on debenture should be taxed only under the head and the \"interest on securites\" and not interest accrued on debentures on cash basis? 2. Whether, the Appellate Tribunal is right in law and on facts in directing the Assessing Officer to compute interest under Section 215/216 after giving effect to the above directions? 4. At the time of hearing, it was stated at the Bar that in almost similar circumstance, a Division Bench of this Court, in I.T.A. No.10 of 1999 and companion matters, decided on 28th April, 1999, allowed the applications by making the Rule absolute. The questions were, however, reframed as under :- \"1. Whether in the facts and circumstances of the case, the Appellate Tribunal is right in law that the interest on debentures issued by companies other than local authority, company or corporation established by a Central, State or Provincial Act is not liable to be computed as income under the head 'interest on securities'. 2. Whether interest on debentures in all circumstances is liable to be considered income only when received by the assessee and not when it has been due.\" 5. Following the above decision of this Court, we also allow the application by directing the Tribunal to send the record for opinion of this Court in respect of following two questions:- 1. Whether in the facts and circumstances of the case, the Appellate Tribunal is right in law that the interest on debentures issued by companies other than local authority, company or corporation established by a Central, State or Provincial Act is not liable to be computed as income under the head 'interest on securities'. 2. Whether interest on debentures in all circumstances is liable to be considered income only when received by the assessee and not when it has been due. 6. Accordingly, this application stands disposed of. In the facts and circumstances of the case, no order as to costs. [ C.K. THAKKAR, J. ] [ A.L. DAVE, J. ] gt "