ACIT, Trivandrum V. Shri N C Kaladharan L/H of the late N. Chellappan, Trivandrum

ITA 918/COCH/2004

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 58337 (ITAT-COCHIN)
• Duration Of Justice: 7 year(s) 5 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-02-2012
• Appeal Filed By: Department
• Bench Allotted: DB
• Next Hearing Date: 17-01-2012
• Assessment Year: 1994-1995
• Appeal Filed On: 02-09-2004
• Court: TRIBUNAL
• Department Lawyers: T R PRASANNAKUMARI
• Assessee Lawyers: T M SREEDHARAN SR ADV
• Keywords: Depreciation; Principle of natural justice
• Section: 143(3); 142(1); 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE S/SHRI N.R.S.GANESAN, JM AND SANJAY AROR A, AM I.T.A NO. 918 TO 921/COCH/2004 ASSESSMENT YEARS: 1994-95 TO 1997-98 THE ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE-1(2), RANGE- 1, TRIVANDRUM VS. N.C.KALADHARAN, L/H OF LATE N. CHELLAPPAN, JAGATHY HOUSE, VELI ROAD, BEACH, TRIVANDRUM. [PAN: PX3546] (REVENUE-APPELLANT) (ASSESSEE - RESPONDENT) REVENUE BY SMT. T.R.PRASANNAKUMARI, SR.DR ASSESSEE BY SHRI T.M.SREEDHARAN, SR. ADV.-AR DATE OF HEARING 17/01/2012 DATE OF PRONOUNCEMENT 29//02/2012 O R D E R PER SANJAY ARORA, AM: THESE ARE A SET OF FOUR APPEALS BY THE REVENUE FOR FOUR CONSECUTIVE YEARS, BEING ASSESSMENT YEARS (AYS) 1994-95 TO 1997-98, ARISING OUT OF THE COMBINED ORDER BY THE COMMISSIONER OF INCOME-TAX (APPEALS)-I, TRIVANDRUM (CIT(A) FOR SHORT) DATED 11-05- 2004, ALLOWING THE APPEALS BY THE ASSESSEE CONTESTI NG ITS ASSESSMENTS FOR THE RELEVANT YEARS VIDE ORDERS U/S. 144 R.W.S. 147 OF THE INCOME -TAX ACT, 1961 ('THE ACT', HEREINAFTER) OF EVEN DATE, I.E., 30-03-2001. 2. THE APPEALS RAISING COMMON ISSUES, WERE HEARD TO GETHER, AND ARE ACCORDINGLY BEING DISPOSED OF BY A COMMON, CONSOLIDATED ORDER, EVEN AS WAS DONE BY THE LD. CIT(A). THE ONLY ISSUE ARISING IN THE APPEALS IS THE ACCRUA L OR OTHERWISE OF THE INTEREST ON THE FDRS FOR THE PRINCIPAL SUM OF RS. 43,55,091/- WITH THE SYNDICATE BANK, FAVOURING THE I.T.A NO. 918 TO 921/COCH/2004 ASSTT. CIT, TRIVANDRUM V. N.C. KALADHARAN 2 ASSESSEE AND, PRIOR TO THE DEATH OF HIS MOTHER, S MT. GOURI PONNAMMA (G FOR SHORT) ON 01-11-1994 (THOUGH WRONGLY STATED AS `30-11-1994 I N THE IMPUGNED ORDER), `G HERSELF. 3. HOWEVER, BEFORE WE MAY PROCEED TO DELINEATE THE FACTS OF THE CASE, IT WOULD BE INCUMBENT TO DEAL WITH THE LEGAL ARGUMENT RAISED BY THE LD. AR DURING HEARING. TAKING US THROUGH THE ASSESSMENT ORDER FOR AY 1993-94, HE WOU LD SUBMIT THAT THE ASSESSEES MOTHER HAVING EXPIRED ON NOVEMBER 1, 1994, AS STATE D THEREIN, ONLY INTEREST UP TO THAT PERIOD COULD POSSIBLY BE ASSESSED IN THE ASSESSEES HANDS AS HER LEGAL REPRESENTATIVE. ON THE OTHER HAND, IF THE IMPUGNED ASSESSMENTS STAND M ADE ON THE ASSESSEE IN HIS INDIVIDUAL (HIS OWN) HANDS, THE ENTIRE PROPERTY, INCLUDING THE IMPUGNED DEPOSITS, HAVING DEVOLVED ON HIM ON THE DEATH OF HIS MOTHER, ONLY THE INCOME EARNED THEREAFTER THE DATE OF HER DEATH COULD BE SUBJECT TO TAX. THE REVENUE COULD NOT POS SIBLY RE-OPEN THE ASSESSMENT/S IN THE HANDS OF BOTH PER A SINGLE NOTICE AS, ADMITTEDLY, O NLY ONE NOTICE U/S. 148 STOOD ISSUED FOR EACH OF THE FOUR YEARS UNDER REFERENCE. THE REVENUE S STAND IN THE MATTER IS THAT THE ASSESSMENTS ARE VALID AS THE DEPARTMENT HAD NO KNOW LEDGE OF THE EXPIRY OR THE DEATH OF `G AT THE TIME OF THE ISSUE OF NOTICES U/S. 148 ON 22-02-1999. WITHOUT DOUBT, IT IS THE INTEREST ON THE SAID DEPOSITS, AS WELL AS THE OTHER INCOME ON ASSETS BELONGING TO HER, AND WHICH STOOD BEQUEATHED BY HER TO THE ASSESSEE, THAT STANDS BROUGHT TO TAX THEREBY, SO THAT IT IS NOT RELEVANT AS TO IN WHOSE HANDS THE SAME CO MES TO BE ASSESSED. ON AN ENQUIRY BY THE BENCH TO THE LD. AR IF HE COULD SUPPORT HIS CON TENTION AS TO THE INVALIDITY OF THE NOTICE/S U/S. 148, VALIDITY OF WHICH IS BASIC TO TH E ENSUING ASSESSMENT, WITH A COPY OF THE SAID NOTICE/S U/S. 148, AND/OR THE REASONS RECORDED FOR ITS ISSUE, FOR THE TRIBUNAL TO DECIDE AS TO THE PERSON (OR THE ASSESSEES CAPACITY, I.E., AS A LEGAL REPRESENTATIVE (LR) OR HIS OWN SELF), TO WHOM THE SAID NOTICE/S U/S. 148 STOOD ISS UED, HE DECLINED, STATING THAT NO MATERIAL, APART FROM THE ASSESSMENT ORDERS AND THE IMPUGNED APPELLATE ORDER, WERE AVAILABLE WITH HIM, THOUGH REITERATED THAT EVEN SO, ONLY ASSESSMENT ON EITHER THE MOTHER (THROUGH HER LRS) OR THE SON COULD SURVIVE, AND NOT ON BOTH. 4.1 THE ARGUMENT ADVANCED BY THE LD. COUNSEL IS A L EGAL ONE, GOING TO THE ROOT OF THE MATTER, I.E., THE VALIDITY OF THE ASSESSMENT/S UNDE R REFERENCE. EVEN THOUGH A STRICT VIEW OF I.T.A NO. 918 TO 921/COCH/2004 ASSTT. CIT, TRIVANDRUM V. N.C. KALADHARAN 3 THE MATTER; THE RELEVANT FACTS NECESSARY FOR ADJUDI CATING THE LEGAL PLEA RAISED BEING NOT CLEAR AND, RATHER, CONTESTED (EVEN AS ADMITTED BY T HE LD. AR WHEN HE STATES OF THE INAVAILABILITY OF THE NOTICES U/S. 148 AS WELL AS T HE REASON/S RECORDED IN ITS RESPECT), WOULD NON SUIT THE ASSESSEE IN THE MATTER, WE ARE INCLINE D TO ADMIT THE SAME. THIS IS AS UNARGUABLY A VALID NOTICE U/S. 148 IS A PERQUISITE FOR A VALID ASSESSMENT AND, EQUALLY IMPORTANTLY, ONE NOTICE COULD (RE)OPEN ONLY ONE ASS ESSMENT, I.E., EITHER OF THE MOTHER `G OR THE SON, THE ASSESSEE. WE, THEREFORE, ADMIT THE SAME, EVEN AS THE ASSESSEE HAS NOT FILED ANY CROSS OBJECTION. AS REGARDS ITS MERITS, THE ARG UMENT IS UNEXCEPTIONAL. SECTION 148 IS A JURISDICTIONAL NOTICE AND, ACCORDINGLY, ONLY THE AS SESSMENT OF THE PERSON TO WHOM IT IS ISSUED WOULD STAND TO BE RE-OPENED FOR ASSESSMENT T HEREBY. 4.2. COMING TO THE ISSUE OF THE IDENTITY OF T HE ISSUEE, THE SAME ARE ISSUED, AS WE SEE IT, ONLY ON THE ASSESSEE IN HIS INDIVIDUAL CAPACITY. F IRSTLY, ALL THE NOTICES ARE ISSUED BY THE SAME ASSESSING OFFICER (AO) (RATHER, THE VERY SAME PERSON), ON THE SAME DATE, FOR ALL THE YEARS TOGETHER, AND SPECIFYING THE SAME NAME AND PA RTICULARS, INCLUDING STATUS, SO THAT SAME ARE - AS IT WOULD APPEAR - ISSUED ONLY TO THE `SAME PERSON. IN FACT, NOTICE U/S. 148 STOOD ISSUED FOR THE ASSESSMENT YEAR 1993-94 TO ALL THE LEGAL HEIRS OF `G AS FAR BACK AS ON 17-03-1997. THIS WAS FOLLOWED BY NOTICES U/S. 143( 2) OF THE ACT FOR THAT YEAR TO ALL HER LEGAL HEIRS (REFER PARAS 11, 12, PG. 4 OF THE ASSES SMENT ORDER FOR A.Y. 1993-94) HOWEVER, AS IT TRANSPIRED, SHE HAD EXECUTED A WILL ON 30-10- 1982, DULY REGISTERED AS 203/94, BEQUEATHING ALL HER MOVABLE AND IMMOVABLE PROPERTIE S IN FAVOUR OF THE ASSESSEE, ONE OF HER SONS, AND WHO HAD, ON THE STRENGTH OF THE SAID WILL, TAKEN OVER THE POSSESSION OF ALL THE PROPERTIES OF HER LATE MOTHER. THESE FACTS, AS WELL AS THE ENTIRE HISTORY OF THE CASE; THE SUMS BEING SOUGHT TO BE TAXED HAVING THEIR GENESIS IN THE ASSESSEES LATE FATHERS BUSINESS, ARE DULY RECORDED IN THE ASSESSMENT ORDER U/S. 143(3) DATED 23/3/1999 FOR AY 1993-94. IT IS THUS COMPLETELY INCORRECT TO SAY THA T THE REVENUE WAS NOT AWARE OF THE DEMISE OF `G - THE ASSESSEES MOTHER, OR OF HIS HA VING TAKEN OVER THE ASSETS OF HIS MOTHER, PARTICULARLY AS DEVOLVED ON HER AS THE SOLE BENEFICIARY OF HER LATE HUSBAND, WHILE ISSUING THE IMPUGNED NOTICES U/S. 148 ON 22/2/1999. BY ALL COUNTS, IT IS ONLY THE INCOME FROM SUCH DEVOLVED ASSETS THAT STANDS SOUGHT TO BE BROUGHT TO TAX BY THE REVENUE BY THE I.T.A NO. 918 TO 921/COCH/2004 ASSTT. CIT, TRIVANDRUM V. N.C. KALADHARAN 4 ISSUE OF THE IMPUGNED NOTICES, EVEN AS EXPLICITLY S TATED IN THE NOTICES U/S. 142(1) FOLLOWING THE NOTICES U/S. 148. AS SUCH, THERE IS N O QUESTION OF THE ISSUE OF NOTICES U/S. 148 FOR ANY ASSESSMENT YEAR COVERING THE PERIOD SUB SEQUENT TO HER DEATH ON THE ASSESSEE OTHER THAN IN HIS OWN CAPACITY; THE REVENUE BEING W ELL AWARE OF THE DEATH OF G. CONTINUING FURTHER, WHILE DECIDING THE ISSUE ON MER ITS, THE LD. CIT(A), VIDE PARA 5 (PG. 7) OF HIS IMPUGNED ORDER, COUNTERS THE AOS ARGUMENT O F THE ASSESSEE HAVING HIMSELF RETURNED THE INTEREST INCOME ON THE FDRS (WITH SYND ICATE BANK) FOR AYS 1996-97 AND 1997-98 (THOUGH EXCLUDED AS NOT ACCRUED ON THE BASI S THAT THE MATTER IS SUB JUDICE ). AS SUCH, BOTH THE AO AND THE ASSESSEE WERE CLEAR AS TO WHICH INCOME IS BEING SOUGHT TO BE TAXED BY THE ISSUE OF NOTICES U/S. 148. ALSO, THERE IS NO MENTION OF THE ASSESSEE BEING THE LEGAL REPRESENTATIVE OF HIS LATE MOTHER, G, EITHER IN THE TITLE OR IN THE BODY OF THE ASSESSMENT ORDER. THIS IS IN CONTRADISTINCTION TO THE ASSESSMENT ORDER FOR A.Y. 1993-94, MADE BY THE SAME PERSON, WHICH CLEARLY MENTIONS TH E ASSESSEES CAPACITY AS A LEGAL REPRESENTATIVE OF HIS MOTHER/FATHER, AS WELL AS OF THE STATUS AS A BOI, AS AGAINST THAT OF AN `INDIVIDUAL FOR THE RELEVANT YEARS. IN FACT, THE ASSESSEE HIMSELF ADMITS OF THE IMPUGNED ASSESSMENTS AS HAVING BEEN FRAMED ON HIM IN HIS IND IVIDUAL CAPACITY IN THE NOTES OF SUBMISSIONS (DTD. 19/12/2011) SUBMITTED BY HIM DURI NG HEARING. WE DECIDE ACCORDINGLY. 5. THE SECOND LEGAL OBJECTION TAKEN BY THE ASSESSEE IS THAT THE IMPUGNED ASSESSMENTS, FRAMED U/S. 144, WERE SO DONE WITHOUT ISSUING PRE-A SSESSMENT NOTICES THERETO, DISCLOSING THE BASIS FOR THE ESTIMATE/S AS WELL AS PROVIDING O PPORTUNITY TO SHOW CAUSE AGAINST SUCH ESTIMATE/S. THE ASSESSMENTS ARE THUS NOT TENABLE IN LAW. RELIANCE FOR THE PURPOSE IS PLACED IN THE CASES OF T.C.N. MENON VS. ITO , 96 ITR 148 (KERALA), BESIDES OTHERS, AS IN THE CA SE OF ADDL. ITO VS. PONKUNNAM TRADERS , 102 ITR 366 (KER.) AND PRABHAKAR MALLAPPA PANADARE V. AGRICULTURAL ITO , 77 ITR 349 (MYS.). APART FROM THE FACT THAT THE D ECISION OF HON'BLE JURISDICTIONAL HIGH COURT IS BINDING ON THIS TRIBUNAL, THE ARGUMENT IS IN PRINCIPLE UNEXCEPTIONAL. THE ASSESSMENT PROCEEDINGS ARE QUASI JUDICIAL PROCEEDINGS, SO THAT THE PRINCIPLES OF NATURAL JUSTICE, WHICH THE D OCTRINE OF AUDI ALTERAM PARTEM EMBODIES, HAS TO BE NECESSARILY OBSERVED. HOWEVER, WE FIND NO SUCH VIOLATION AS ALLEGED IN THE FACTS AND CIRCUMSTANCES OF THE CASE. FIRSTLY, THE ASSESSE E WAS SERVED WITH NOTICES U/S. 148, I.T.A NO. 918 TO 921/COCH/2004 ASSTT. CIT, TRIVANDRUM V. N.C. KALADHARAN 5 WHICH REMAINED UN-COMPLIED WITH, EVEN THOUGH THE AS SESSMENTS WERE FRAMED AFTER A PERIOD OF OVER TWO YEARS SINCE. THE SAID NOTICE/S S TANDS ISSUED ONLY AFTER RECORDING THE REASON/S TO BELIEVE THAT INCOME CHARGEABLE TO TAX H AS ESCAPED ASSESSMENT, A COPY OF WHICH THE AO IS BOUND TO FURNISH TO THE ASSESSEE UP ON REQUEST AFTER COMPLYING WITH SAID NOTICE (REFER: GKN DRIVESHAFTS (INDIA) LTD. VS. ITO (2003) 259 ITR 19). THIS IS ONLY TO MEET AND TOWARD OBSERVING A FAIR PROCEDURE. EVEN SO , THE AO, VIDE LETTER DATED 16-03- 2001 (COPY ON RECORD PG. 11 OF NOTES OF SUBMISSIO NS BY THE ASSESSEE) COMMUNICATED TO THE ASSESSEE, THE FOLLOWING: (A) THE FACT OF THE NOTICES U/S. 148 DATED 22/2/200 9 FOR THE RELEVANT YEARS BEING UN- COMPLIED WITH TO DATE; (B) THE FACT THAT THE ENTIRE ASSETS OF HIS LATE MOT HER DEVOLVED ON THE ASSESSEE BY VIRTUE OF HER WILL DATED 30-10-1982 , SO THAT HE WAS LIABL E TO TAX ON ANY INCOME ARISING THEREON; (C) THAT HE WAS UNABLE TO GRANT FURTHER TIME IN TH E MATTER; THE ASSESSEE'S ASSESSMENTS GETTING TIME BARRED ON 31-03-2001; AND (D) THAT A FAILURE TO RESPOND TO THE LETTER WOULD C ONSTRAIN HIM TO PROCEED TO FRAME THE ASSESSMENT/S U/S. 144 OF THE ACT, I.E., TO THE BEST OF HIS JUDGMENT. NOTICES U/S. 142(1) OF THE ACT WERE ALSO ISSUED ALO NG WITH. THE SAID NOTICE IS ONLY TOWARD FURNISHING/PRODUCING THE INFORMATION REQUIRED BY TH E ASSESSING OFFICER FOR FRAMING THE ASSESSMENT. THE ASSESSEE DID NOT RESPOND TO EITHER THE LETTER AFORESAID OR THE NOTICES U/S. 142(1). THERE HAS BEEN THUS DUE GRANT OF OPPORTUNIT Y BY THE REVENUE TO THE ASSESSEE, AS ALSO A SATISFACTION OF THE MANDATE OF SEC. 144, WHI CH CLEARLY STIPULATES SUCH A NOTICE, CALLING UPON THE ASSESSEE TO SHOW AS TO WHY - THE C ONDITION/S FOR ASSESSMENT U/S. 144 BEING MET THE SAME MAY NOT BE MADE ON THE BASIS O F BEST JUDGMENT. IT IS, THUS, A CASE OF OPPORTUNITY HAVING BEEN NOT AVAILED, RATHER THAN ON E OF BEING NOT EXTENDED OR AFFORDED. FURTHER, IN APPEAL, THE ASSESSEES CASE BEFORE THE LD. CIT(A) WAS THAT THOUGH THE IMPUGNED INTEREST HAS BEEN ALLOWED TO BE WITHDRAWN BY THE HON'BLE HIGH COURT, YET IT CANNOT BE SAID TO HAVE ACCRUED TO HIM IN VIEW OF TH E MATTER BEING DISPUTED AND SUB JUDICE BEFORE THE HONBLE HIGH COURT ITSELF, AND WHICH MAY RESULT IN THE SAME BEING DECIDED I.T.A NO. 918 TO 921/COCH/2004 ASSTT. CIT, TRIVANDRUM V. N.C. KALADHARAN 6 AGAINST HIM, SO THAT THERE WAS UNCERTAINTY ATTENDIN G THE SAME. INTEREST COULD NOT BE POSSIBLY BE SAID TO BEAR A CHARACTER DIFFERENT (IN THIS REGARD) FROM THE PRINCIPAL AMOUNT ON WHICH THE SAME IS BEING GRANTED. THE ASSESSEE'S CAS E IS THUS THE SAME AS BEFORE THE ASSESSING AUTHORITY WHILE FRAMING THE ASSESSMENT FO R ASSESSMENT YEAR 1993-94, DURING THE COURSE OF ASSESSMENT PROCEEDINGS OF WHICH THE NOTIC ES U/S. 148 FOR THE RELEVANT YEARS STOOD ISSUED TO THE ASSESSEE. AS SUCH, FIRSTLY, THE RE IS NO CHANGE IN THE STAND OF THE ASSESSEE; RATHER, OF BOTH THE SIDES, WITH REFERENCE TO THAT YEAR (I.E., ASSESSMENT YEAR 1993- 94). SECONDLY, IT IS NOT UNDERSTOOD AS TO WHY THE A SSESSEE COULD NOT STATE SO BEFORE THE ASSESSING OFFICER, AS IT DID IN THE ASSESSMENT PROC EEDINGS FOR THAT YEAR. AS IT APPEARS, THEREFORE, THE NON-REPRESENTATION BEFORE THE AO WAS DELIBERATE, MOTIVATED PERHAPS WITH A VIEW TO LET THE ASSESSMENT/S BECOME BARRED BY TIME, OR IN THE LEAST FRAMED AT A WRONG FIGURE/S, SO THAT THESE ISSUES COULD THEN BE AGITAT ED IN THE APPELLATE PROCEEDINGS. IT IS TRITE LAW THAT A PARTY CAN NOT TAKE ADVANTAGE OF ITS OWN WRONG, PREJUDICING THE OTHER PARTY (REFER: B.M. MALANI V. CIT (2008) 306 ITR 196, 207 (SC)), EVEN AS, AS OBSERVE D EARLIER, THE AO HAS FOLLOWED THE PRESCRIBED PROCEDURE. THIRD LY, IT IS APPARENT THAT THE ASSESSEE DULY REPRESENTED ITS CASE BEFORE THE FIRST APPELLAT E AUTHORITY, IN WHOSE ORDER THE ASSESSMENT ORDER MERGES. WOULD, THE ASSESSEE, IT MAY BE ASKED, CONTEND OR PL EAD LACK OF OPPORTUNITY BEFORE THE TRIBUNAL IF THE REVENUE HAD NOT APPEALED BEFORE IT ? UNDER THE GIVEN FACTS AND CIRCUMSTANCES, AND THE LAW IN THE M ATTER, THEREFORE, THE CONTENTION OR PLEA OF LACK OF OPPORTUNITY OR NON-OBSERVANCE OF DUE PRO CEDURE BY THE REVENUE, IS ONLY A RUSE, AND WITHOUT SUBSTANCE. THE SAME IS, ACCORDINGLY, RE JECTED. 6. WE, NEXT, DISCUSS THE MERITS OF THE CASE. TH E ASSESSEE'S CASE IS THAT THE DOCTRINE OF RESTITUTION IS EQUALLY APPLICABLE TO INTEREST, I.E. , AS IT IS TO THE PRINCIPAL SUM ON WHICH IT IS BEING GRANTED. THIS IS AS A COURT IN MAKING RESTITU TION IS BOUND TO RESTORE THE PARTIES, SO FAR AS THEY CAN BE RESTORED, TO THE SAME POSITION A S THEY WERE WHEN THE COURT BY ITS ERRONEOUS ACTION HAD DISPLACED THEM. IN FACT, EVEN IF THE ASSESSEE HAD NOT PLACED THE PRINCIPAL AMOUNT IN INTEREST BEARING BANK DEPOSITS, IT WOULD YET IN RESTITUTION BE LIABLE TO INTEREST ON THE AMOUNTS WITHDRAWN, I.E., WHERE THE SAME WAS FOUND TO BE ON ACCOUNT OF AN ERRONEOUS DECREE. WE COULD NOT AGREE MORE, EVEN AS THE SAID PLEADING IS MADE WITH I.T.A NO. 918 TO 921/COCH/2004 ASSTT. CIT, TRIVANDRUM V. N.C. KALADHARAN 7 REFERENCE TO BINDING DECISIONS BY THE HIGHER COURTS OF LAW [ BINAYAK SWAIN VS. RAMESH CHANDRA PANIGRAHI & ANR . (1966) 3 SCR 24; SUBRAMONIA V. JANARDHANAN , AIR (1962) KERALA 297 (COPY ON RECORD)]. THERE IS NO QUESTION, WE MAY CLARIFY, OF THE SAID LEGAL PRECEDENTS BEING NOT APPLICABLE TO THE PROCEEDINGS UNDER THE TAXATION LAW. RELIANCE IS ALSO PLACED ON THE DECISION UNDER THE ACT IN THE CA SE OF CIT VS. HINDUSTAN HOUSING AND LAND DEVELOPMENT TRUST LTD . (1986) 161 ITR 524 (SC) FOR THE PROPOSITION THAT AN AMOUNT DOES NOT ACCRUE UNTIL RESOLUTION OF THE DISP UTE ATTENDING THE SAME. THE SAME AGAIN REPRESENTS TRITE LAW. THE REVENUES CASE, ON THE OTHER HAND, IS THAT THE INCOME AT LEAST TO THAT EXTENT HAS IN FACT ACCRUED. TOWARD THIS, IT ADVERTS TO THE FAC TS AND CIRCUMSTANCES OF THE CASE PER THE STATEMENT OF FACTS FILED ALONG WITH AND FORMING PAR T OF THE APPEAL MEMO BEFORE US, AS ALSO FOR THE ASSESSMENT ORDER FOR AY 1993-94, AND WHICH HAVE NOT BEEN REBUTTED OR DISPUTED BY THE ASSESSEE. THE IMPUGNED PRINCIPAL SUM OF RS. 43,55,091/-, DEPOSITED WITH THE BANK ON THE DIRECTION OF THE HON'BLE HIGH COURT, DOES NO T RELATE TO THE DECREE IN CONNECTION WITH THE DISPUTE IN RESPECT OF THE PERFORMANCE OF T HE CONTRACT BETWEEN THE ASSESSEE AND KERALA STATE ELECTRICITY BOARD (K.S.E.B.), WHICH IS A SUBJECT MATER OF A SEPARATE DECREE RELATING TO THE QUANTUM OF WORK DONE, THOUGH CONFIR MED BY THE HON'BLE HIGH COURT VIDE ITS JUDGMENT DATED 23-12-1982 IN AS NO.164 OF 1977. IN FACT, THE SAID DECREE HAVING BEEN CONFIRMED BY THE HON'BLE APEX COURT, THE ASSES SEE RECEIVED AN AMOUNT OF RS. 28,58,596/- TOGETHER WITH INTEREST THEREON, WHICH W AS SUBJECT TO TAX FOR ASSESSMENT YEAR 1993-94. THE ASSESSEE APPEALED AGAINST THE SAME, AN D WHICH IS PENDING BEFORE THE HON'BLE KERALA HIGH COURT. THE SUM OF RS. 43.55 LAC S, ON THE OTHER HAND, IS THE REPLACEMENT VALUE OF THE MACHINERY, AS COULD BE VER IFIED FROM THE JUDGMENT OF THE HON'BLE HIGH COURT DATED 17-03-2003 (IN CRP NO. 216 1 OF 1991). THE ORDER OF THE COURT OF THE PRINCIPAL SUB JUDGE, TRIVANDRUM, DIRECTED SO , WAS CHALLENGED BY KSEB BEFORE THE HONBLE HIGH COURT, PRAYING FOR STAY OF ITS EXECUTI ON. THE HON'BLE COURT (IN CMP NO. 3111/95 IN CRP NO. 2161/1991-E) DIRECTED KSEB TO DE POSIT THE AMOUNT IN INSTALMENTS UPON BEING FURNISHED BANK GUARANTEE IN ITS FAVOUR. AS THE ASSESSEE'S MOTHER COULD NOT DO SO, SHE MADE ARRANGEMENTS WITH SYNDICATE BANK, WHER EBY THE BANK ISSUED GUARANTEE TO THE ELECTRICITY BOARD ON THE AMOUNT BEING PLACED IN DEPOSIT WITH IT. WHAT IS IN CHALLENGE I.T.A NO. 918 TO 921/COCH/2004 ASSTT. CIT, TRIVANDRUM V. N.C. KALADHARAN 8 BEFORE THE HON'BLE COURT BY KSEB IS THE QUANTUM OF COMPENSATION FOR TOOLS AND EQUIPMENTS, ARRIVED AT BY THE COMMISSION APPOINTED FOR THE PURPOSE OF VALUING THE REPLACEMENT VALUE AS ON 31/3/1988, TO WHICH THE ASS ESSEE'S FATHER WAS, IN TERMS OF THE ORDER OF THE PRINCIPAL COURT, ENTITLED TO, AND WHIC H IS NOT IN DISPUTE . AS SUCH, THE RIGHT TO RECEIVE THE PAYMENT IS ADMITTED, AND IT IS ONLY THE QUANTIFICATION OF THE AMOUNT PAYABLE WHICH IS THE SUBJECT MATTER OF DISPUTE. THE TOOLS A ND PLANT AND MACHINERY BELONGED TO THE DECREE HOLDER AND, THEREFORE, THE ASSESSEE THROUGH HIM. IN FACT THE ADVOCATE COMMISSIONER AND THE EXPERT COMMISSIONER, APPOINTED ON THE DIRECTION OF THE PRINCIPAL SUB-COURT, ASSESSED THE REPLACEMENT VALUE OF THE MA CHINERY AT RS. 69.23 LACS. SO, HOWEVER, THE EXECUTION COURT ALLOWED THE DECREE CRE DITOR TO RECOVER AN AMOUNT OF RS. 43.55 LACS WITH INTEREST THEREON @ 12% PER ANNUM FR OM 01-04-1988 TO THE DATE OF THE ORDER, AND THEREAFTER AT 6% TILL REALIZATION. AS SU CH, CLEARLY THE RIGHT TO RECEIVE THE PAYMENT IS ADMITTED, AND WHAT IS OPEN FOR DETERMINA TION IS ONLY THE QUANTIFICATION OF THE AMOUNT. AFTER THE DEATH OF ASSESSEE'S MOTHER, THE O THER LEGAL HEIRS CHALLENGED THE ASSESSEE'S RIGHT TO RECEIVE THE INTEREST ON THE BAN K DEPOSITS FOR RS. 43.55 LACS, WHICH WERE MADE ON 15-04-1992 . THE HON'BLE HIGH COURT HELD THAT THE ASSESSEE WAS ENTITLED TO INTEREST ON THE AMOUNT LYING IN DEPOSIT WITH SYNDIC ATE BANK FROM THE DATE OF DEATH OF HIS MOTHER SMT. GOURI PONNAMMA, AND COULD BE WITHDRAWN, AS BY HIS MOTHER DURING HER LIFE TIME, BY HIM. ACCORDINGLY, THERE IS NO UNCERTAINTY AS TO THE ASSESSEE'S ENTITLEMENT TO INTEREST, SO THAT THERE IS NO IMPEDIMENT FOR IT BEI NG TAXED IN HIS HANDS FOR THE RELEVANT YEARS. 7.1 IT IS CLEAR, THEREFORE, THAT WHILE THE ASSESSEE RAISES A LEGAL GROUND, THE REVENUE SETS UP ITS CASE ON FACTUAL BASIS. THE QUESTION OF ACCRUAL OR OTHERWISE, THOUGH ESSENTIALLY ONE OF THE FACT, TO THE EXTENT THE ASSESSEE CLAIMS UNCERTAINTY ATTENDING ITS RIGHT TO THE IMPUGNED AMOUNT, THE QUESTION RAISED IS A MIXED QUE STION OF FACT AND LAW.. AT THE SAME TIME, AGAIN, THE REVENUES STAND OF THE SAID RIGHT BEING NOT DISPUTED AND, IN FACT, HAVING DEVOLVED ON THE ASSESSEE, INVOLVES A MIXED QUESTION OF FACT AND LAW. WE HAVE ALREADY EXPRESSED OUR COMPLETE AGREEMENT WITH THE LEGAL PRO POSITION QUA RESTITUTION ADVANCED BY THE ASSESSEE IN STATING ITS CASE, WHICH THOUGH, AS AFORESAID, IS COMPLETELY LEGAL. AS SUCH, I.T.A NO. 918 TO 921/COCH/2004 ASSTT. CIT, TRIVANDRUM V. N.C. KALADHARAN 9 OUR REFERENCE TO THE FACTS AND CIRCUMSTANCES OF THE CASE WOULD ONLY BE WITH A VIEW TO DETERMINE IF THE SAID PRINCIPLES ARE IN FACT APPLIC ABLE IN THE FACTS AND CIRCUMSTANCES OF THE CASE. WE HAVE PERUSED THE MATERIALS ON RECORD, BEIN G IN THE MAIN: (A) ORDER BY THE HON'BLE HIGH COURT IN CMP NO. 3595 /91 IN CRP NO.2161/91E DATED 21- 02-1992; (B) CMP NO. 3111/95 IN CRP NO. 2161/91 DATED 06-10- 1995; AND (C) ASSESSMENT ORDER U/S. 143(3) DATED 23-03-1999 I N THE ASSESSEE'S CASE FOR THE ASSESSMENT YEAR 1993-94; BESIDES THE `STATEMENT OF FACTS SUBMITTED BY THE PARTIES BEFORE US AS WELL AS BEFORE THE FIRST APPELLATE AUTHORITY, BEING NOT CONTROVERTED. WE FIRSTLY OBSERVE THAT THE ASSESSEE AGITATED ITS ASSESSMENT FOR THE ASSESSMENT YEAR 1993-94, AND THE MATTER IS BEFORE THE HON'BLE HIGH COURT. NONE OF THE PARTIES, HOWEVER, BROUGHT ANY DIRECTION OR ANY DECISION BY IT AND, AS SUMING THE SAME TO HAVE BEEN NOT DECIDED BY IT TO DATE, BY THE TRIBUNAL, BEFORE US. THIS IS SURPRISING INDEED, SUGGESTING OF THE MATTER AS HAVING BEEN DECIDED BY THE TRIBUNAL A GAINST THE ASSESSEE. WHATEVER IT MAY BE, THE SAME OUGHT TO HAVE BROUGHT TO OUR NOTICE. A DECISION BY THE TRIBUNAL ON A MATTER UNDER CHALLENGE BEFORE A HIGHER COURT, WOULD NORMAL LY INCLINE US TO ADOPT THE SAME VIEW (OR AS MODIFIED BY THE HIGHER COURT) FOR THE SUBSEQ UENT YEAR, UNLESS OF COURSE SOME FRESH FACTS NOT BROUGHT TO THE NOTICE OF THE ADJUDICATING AUTHORITY OR REPRESENTING A SUBSEQUENT DEVELOPMENT/S, ETC. ARE BROUGHT OUT, DISTINGUISHING THE OTHER DECISION. FURTHER, IT COULD ALSO BE, AND FOR ALL WE KNOW, THAT THE SAID ISSUE H AS NOT HAVE BEEN CONTESTED BY THE ASSESSEE IN APPEAL BEFORE THE TRIBUNAL OR THE HIGH COURT, I.E., STANDS ACCEPTED BY IT, BESTOWING A FINALITY TO THE MATTER AS BETWEEN THE P ARTIES. THOUGH UNFORTUNATE, AND FOR WHICH WE CONSIDER THE REVENUE AS EQUALLY RESPONSIBL E, AS IT WOULD OR OUGHT TO BE AWARE OF THE FACTS OF THE CASE AND, IN ANY CASE, OUGHT TO HAVE ADDRESSED THE BENCH ON THIS ASPECT OF THE MATTER AS WELL. SO, HOWEVER, WE CANNOT LET T HE MATTER REST ON A PRESUMPTION AND, ACCORDINGLY, PROCEED WITH OUR ADJUDICATION ON THE B ASIS OF THE MATERIALS BEFORE US, BEING PRINCIPALLY THE DECISIONS BY THE HON'BLE HIGH COURT ON THE VARIOUS PETITIONS MOVED BY THE LITIGANTS, BEING THE ASSESSEE AND THE KSEB, BEFORE IT. I.T.A NO. 918 TO 921/COCH/2004 ASSTT. CIT, TRIVANDRUM V. N.C. KALADHARAN 10 OUR SECOND OBSERVATION IN THE MATTER IS THAT PRIMARY FACTS OF THE CASE ARE LARGELY UNDISPUTED. THE ASSESSEE'S FATHER, LATE SHRI N. CHE LLAPPAN, A CONTRACTOR, ENTERED INTO AN AGREEMENT WITH KSEB FOR DRIVING AND LINING 26 FEET POWER TUNNEL AT KULAMAVU (IN IDUKY HYDRO ELECTRIC PROJECT) ON 06-04-1966, COMMENCING W ORK ON 13-04-1966. HE STOPPED WORK FOR VARIOUS REASONS ON 23-07-1970, FILING A SU IT BEFORE THE SUB-JUDGE, TRIVANDRUM IN 1974 FOR SETTLEMENT OF ACCOUNTS AND FOR REALIZIN G THE AMOUNT DUE TO HIM. THE SUB- COURT PASSED A PRELIMINARY DECREE ON 21-12-1976 (IN SUIT NO. OS-25 OF 1974), ALLOWING HIM FOR A SETTLEMENT OF THE ACCOUNTS RELATING TO TH E CONTRACT. IT ALSO DIRECTED THAT THE QUANTUM OF WORK DONE BY HIM WOULD BE DETERMINED BY ISSUING COMMISSION, WHICH WOULD ASSESS THE SAME WITH THE HELP OF THE RELEVANT RECORDS. SHRI CHELLAPPAN DIED ON 30- 04-1977, BEQUEATHING HIS ENTIRE PROPERTY TO HIS WIF E, SMT. G, VIDE WILL DATED 08-10-1976, THE VALIDITY OF WHICH WAS UPHELD BY DISTRICT COURT. SMT. G WAS ACCORDINGLY IMPLEADED AS AN ADDITIONAL PLANTIFF IN SUIT NO. O.S. 25 OF 1974. THE PRELIMINARY DECREE WAS CONFIRMED BY THE HON'BLE HIGH COURT IN AS NO. 164 OF 1977 VID E JUDGMENT DATED 23-12-1982. IT APPOINTED A COMMISSION TO ASSESS THE QUANTUM OF WOR K (AS PER THE DIRECTION IN THE PRELIMINARY DECREE). THE FINAL DECREE WAS PASSED BY THE LOWER COURT ON 28-02-1987, ALLOWING THE PLAINTIFF TO RECOVER RS. 28.59 LACS WI TH 12% INTEREST FROM 21-12-1976 (THE DATE OF THE PRELIMINARY DECREE) TO THE DATE OF DECR EE (28-02-1987), AND FUTURE INTEREST @ 6%. P.A., I.E., TILL REALIZATION. THE SECURITY AMOU NT WAS ALSO ALLOWED TO BE REALIZED WITH INTEREST @ 6%. A SUM OF RS. 77,12,540/- WAS RECEIVE D BY SMT. G IN AUGUST, 1992, I.E., DURING THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR 1993-94 IN PURSUANCE TO THE SAID DECREE, WHICH WAS CONFIRMED BY THE HON'BLE HIGH COU RT (IN AS 194 OF 1987 DATED 22-08- 1990), AS WELL AS BY HON'BLE SUPREME COURT, WHICH H AD INITIALLY RESTORED THE MATTER BACK TO THE HIGH COURT FOR CONSIDERATION OF SOME QUESTIO NS FORMULATED BY IT. THOUGH THE HON'BLE HIGH COURT PASSED THE FRESH DECREE ON 22-08 -1990, THE MATTER ATTAINED FINALITY ON THE DISMISSAL OF THE SLP BY THE APEX COURT ON 14-05 -1992. THE SAME FORMED THE SUBJECT MATTER OF THE ASSESSMENT, I.E., IN THE MAIN, FOR TH AT YEAR (A.Y. 1993-94), WHICH WAS FRAMED ON 23/3/1999 U/S. 143(3) R/W S. 148 ON THE L EGAL HEIRS OF SMT. G, WHO HAD EXPIRED ON 01-11-1994. AS WOULD BE READILY SEEN, THIS AMOUN T IS INDEPENDENT OF THE SUM OF RS. 43,55,091/-RECEIVED BY THE ASSESSEE, AND THE TAXABI LITY OF INTEREST ON WHICH, BEING HELD IN I.T.A NO. 918 TO 921/COCH/2004 ASSTT. CIT, TRIVANDRUM V. N.C. KALADHARAN 11 DEPOSIT/S WITH THE BANK W.E.F. 15-04-1992 ON THE DI RECTION BY THE HON'BLE HIGH COURT, WITH A FURTHER DIRECTION FOR WITHDRAWAL OF THE SAID INTEREST, FORMS THE SUBJECT MATER OF DISPUTE IN THE INSTANT CASE. THE VERY SAME ISSUE, I .E., THE TAXABILITY OF INTEREST ON THE BANK FDRS FOR RS. 43.55 LACS, ALSO AROSE IN THE ASSESSME NT FOR A.Y. 1993-94, FOR WHICH THE SAME WAS TAKEN AT RS. 4,17,363/-, I.E., @ 10% P.A. FOR THE OUTSTANDING PERIOD OF 11.5 MONTHS DURING THE RELEVANT PREVIOUS YEAR (ENDING ON 31-03-1993), AND UPON DUE REPRESENTATION BY THE ASSESSEE. IT IS FOR THIS REAS ON THAT THE SAID ASSESSMENT, BEING IN THE ASSESSEES OWN CASE, ASSUMES SIGNIFICANCE. EVEN THO UGH IT STANDS FRAMED ON THE ASSESSEE IN THE CAPACITY OF `BODY OF INDIVIDUALS (BOI), THE SAME BEING ONLY IN RELATION TO THE TWO DEPOSITS FOR RS. 43,55,091/- (WITH SYNDICATE BANK) FOR THE PERIOD DURING WHICH THE ASSESSEE'S MOTHER WAS ALIVE, IS NEVERTHELESS EQUALL Y RELEVANT FROM OUR POINT OF VIEW. THIS IS AS WHAT WOULD VARY IS ONLY THE STATUS IN WHICH S AID INCOME WOULD STAND TO BE ASSESSED. HOWEVER, AS AFORESAID, THERE BEING NO REFERENCE THE RETO EITHER IN THE ORDERS BY THE AUTHORITIES BELOW, OR IN THEIR ARGUMENTS BY THE OPP OSING PARTIES, WE SHALL AS AFORESAID PROCEED ON THE BASIS OF THE MATERIAL ON RECORD. 7.2 AS CORRECTLY POINTED OUT BY THE REVENUE, THE PRINCIPAL AMOUNT OF RS. 43.55 LACS PERTAINS TO THE REPLACEMENT VALUE (AS ON 31-03-1988 ) OF THE PLANT AND MACHINERY, TOOLS, ETC. BELONGING TO THE ASSESSEES FATHER, RETAINED B Y KSEB, BEING THE SETTLED POSITION BETWEEN THE PARTIES, AND FOR WHICH THE REVENUE REFE RS TO THE DECISION BY THE HONBLE COURT IN C.R.P. NO. 2161 OF 1991 DATED 17/3/2003. THAT TH E SAID EQUIPMENT BELONGED ABSOLUTELY TO THE ASSESSEES FATHER IS NOT IN DISPU TE, AND AGAIN A SETTLED ISSUE BETWEEN THE PARTIES, HAVING BEEN AFFIRMED BY THE HONBLE HIGH C OURT IN A.S. NO. 691 OF 1972, PUTTING KSEB IN THE POSITION OF THE JUDGMENT DEBTOR. THE AD VOCATE COMMISSIONER AND THE EXPERT COMMISSIONER APPOINTED FOR ASSESSMENT OF THE REPLACEMENT VALUE, ON THE DIRECTION BY THE COURT, ASSESSED THE SAME AT RS. 69,22,203/- . THE EXECUTION COURT (BEING THE PRINCIPAL SUB-JUDGE, TRIVANDRUM) VIDE ITS ORDER PAS SED IN E.P. NO. 53/72 IN O.P. (A) NO. 26/71 ON 27-08-1991, HELD THE ASSESSEE'S FATHER/MOTHER TO BE ENTITLED T O RECOVER RS. 43.55 LACS WITH INTEREST THEREON @ 12% FROM 1-4-1988 TO T HE DATE OF THE ORDER (27-08-1991), AND @ 6% P.A. THEREAFTER, I.E., TILL REALIZATION. T HE SAME WAS CHALLENGED BEFORE THE HON'BLE I.T.A NO. 918 TO 921/COCH/2004 ASSTT. CIT, TRIVANDRUM V. N.C. KALADHARAN 12 HIGH COURT BY KSEB (IN CRP NO. 2161 OF 1991 E), WHI CH, WHILE ADMITTING THE PETITION, GRANTED AN INTERIM STAY AS PRAYED FOR VIDE ITS ORDE R DATED 13/11/1991. MRS. G ALSO MOVED A PETITION BEFORE THE SAID COURT (IN CRP NO.43 OF 1 992), CLAIMING THAT THE COURT BELOW HAD DECLINED SOME OF HER CLAIMS AND CONTENTIONS. IN A CIVIL MISC. PETITION MOVED IN ITS RESPECT (IN CMP NO. 3595/91), THE HON'BLE COURT, AF TER HEARING THE PARTIES, VIDE ITS ORDER DATED 21-02-1992, HELD THAT NO CASE FOR CONTINUING THE ORDER OF STAY WAS MADE OUT BY THE PETITIONER, KSEB. THE HON'BLE COURT WENT ON TO OBSE RVE THAT: A) THE DECREE HOLDER (ASSESSEE) IS ENTITLED TO THE REP LACEMENT VALUE OF MOVABLE PROPERTIES ADMITTEDLY BELONGING TO HIM; B) NO GLARING INFIRMITY/S IN THE METHOD OF VALUATION A DOPTED BY THE COMMISSIONERS HAS BEEN SHOWN, AND WHICH COULD NEITHER BE SHOWN AS BEING ARRIVED AT IN AN ARBITRARY MANNER; AND C) THAT THE INTEREST AMOUNT ON THE COMPENSATION VALUE OF RS. 43.55 LACS (WHICH WOULD RUN FROM 01-04-1988 @ 12% PER ANNUM UP TO 27-08-199 1, AND @ 6% P.A. THEREAFTER) WOULD ITSELF AMOUNT TO A SUBSTANTIAL SU M. ACCORDINGLY, KSEB (THE PETITIONER) WAS DIREC TED TO DEPOSIT WITH IT RS. 20.00 LACS WITHIN THREE WEEKS, AND BALANCE RS. 23.55 LACS WITH IN SIX WEEKS FROM THE DATE OF ITS ORDER (21/2/1992). THE ASSESSEE-RESPONDENT WAS ALLOWED TO WITHDRAW THE AMOUNT ON FURNISHING BANK GUARANTEE. THE MISCELLANEOUS PETITION BY KSEB (C.M.P. NO. 3595/1991) WAS DISPOSED OF THUS BY THE HONBLE HIGH COURT. AS ALSO NOTED EARLIER, THE ASSESSEES MOTHER FAILING TO FURNISH THE BANK GUARANTEE TO KSEB FOR R ELEASE OF THE COMPENSATION AMOUNT, THE SAME INSTEAD OF BEING DEPOSITED WITH THE COURT, WAS PLACED IN DEPOSITS WITH THE BANK, SECURING THE PETITIONER. THE ASSESSEE WAS, HOWEVER, ALLOWED TO WITHDRAW THE INTEREST ON THE BANK DEPOSITS. IN ANOTHER MISCELLANEOUS PETITI ON MOVED BY THE OTHER LEGAL HEIRS OF `G FOR AN INJUNCTION RESTRAINING THE ASSESSEE FROM WITHDRAWING THE SAID INTEREST, THE HONBLE COURT (IN C.M.P. NO. 3111 OF 1995 IN CRP NO . 2161 OF 1991-E), VIDE ORDER DATED 06/10/1995, CONFIRMED ITS EARLIER JUDGMENT DATED 12 /7/1995 IN APPEAL/S BY THE SAID LEGAL HEIRS CHALLENGING THE ORDER IN FAVOUR OF THE ASSESS EE BY THE LOWER COURT BY QUESTIONING THE WILL, HOLDING THAT THE ASSESSEE WAS ENTITLED TO INT EREST ON THE BANK DEPOSITS WITH I.T.A NO. 918 TO 921/COCH/2004 ASSTT. CIT, TRIVANDRUM V. N.C. KALADHARAN 13 SYNDICATE BANK FROM THE DATE OF HER DEATH, AND THAT HE WAS ENTITLED TO WITHDRAW THE SAME, AS WAS HIS MOTHER PRIOR TO HER DEATH ON 01/11/1994. WHAT, THEN, ONE MAY ASK, IS THE DISPUTE AB OUT ? THE TITLE OF THE ASSESSEES FATHER TO THE EQUIPMENT IS NOT IN QUESTION, AND NEITHER THERE FORE HIS RIGHT TO BE COMPENSATED IN ITS RESPECT AND, CORRESPONDINGLY, OF ALL THOSE CLAIMING THROUGH HIM, BEING HIS WIFE, `G, AND AFTER HER DEMISE, HER SON, THE ASSESSEE. AS REGARDS THE VALUE THEREOF, THE EXPERT BODY OF COMMISSIONERS APPOINTED BY THE HONBLE COURT HAS AS SESSED THE SAME AT RS. 69.22 LACS. THOUGH IT IS NOT CLEAR AS TO HOW THE AMOUNT OF RS. 43.55 LACS, ALLOWED TO BE WITHDRAWN BY THE DECREE-HOLDER (ASSESSEE), STANDS DETERMINED BY THE EXECUTION COURT, THE SAME ITSELF REPRESENTS A SIGNIFICANT DISCOUNT (37+ %)ON THE VAL UE ASSESSED ON ARBITRATION, AND WHICH APPEARS TO BE BY FACTORING CONSIDERATIONS, SUCH AS THE AGE OF THE TOOLS; DEPRECIATION TO WHICH THE EQUIPMENT IS SUBJECT, ETC. ACCORDINGLY, T HIS MUST BE CONSIDERED AS THE MINIMUM AMOUNT THAT IN THE OPINION OF THE COURT IS DUE TO THE ASSESSEE AS ON 31-03-1988. THE HONBLE HIGH COURT HAS FURTHER ENDORSED THE VIE W POINT OF THE LOWER COURT, STATING THAT NO INFIRMITY COULD BE POINTED OUT BY THE PETITIONER IN THE WORKING OF THE SAME, WHICH WAS NOT ARBITRARY. FURTHER, THAT THIS AMOUNT IS DUE TO THE DECREE-HOLDER/ASSESSEE AS ON 31/3/1988, THE VALUATION DATE, SO THAT HE IS ENTITL ED TO INTEREST THEREON @ 12% P.A. W.E.F. 01/4/1988 TO 27/8/1991 (THE DATE OF THE DECREE), AN D @ 6% P.A. THEREAFTER, TILL REALIZATION, WHICH WOULD RUN UP TO 15/4/1992, THE DATE ON WHICH KSEB, THE JUDGMENT DEBTOR, DEPOSITED THE AMOUNT WITH THE BANK. THE SAME THE INTEREST BEING SUBJECT TO ANNUAL COMPOUNDING - WORKS TO RS. 66.50 LACS, INCREASING E FFECTIVELY THE COMPENSATION AMOUNT BY NEARLY 53%. IN OTHER WORDS, EVEN IF THE DECREETA L OR THE DEPOSIT AMOUNT (AS ON 31/3/1988) OF RS. 43.55 LACS STANDS FURTHER REDUCED BY 53 %, I.E., TO RS. 28.46 LACS (43.55 LACS DIVIDED BY 1.53), IT WOULD NOT IMPACT THE ASS ESSEE IN ANY MANNER INASMUCH AS THE INTEREST ARISING ON THE DEPOSITS IS CONCERNED, AS T HE COMPENSATION AMOUNT WOULD, GIVEN THE INTEREST RATES APPLICABLE THERETO AS PER THE CO URT ORDER, WORK TO AT LEAST RS. 43.55 LACS AS ON 15/4/1992, THE DATE OF THE DEPOSITS, AND FROM WHICH DATE INTEREST INCOME IS ARISING TO AND, FURTHER, BEING REGULARLY WITHDRAWN BY ASSES SEE. I.T.A NO. 918 TO 921/COCH/2004 ASSTT. CIT, TRIVANDRUM V. N.C. KALADHARAN 14 7.3 AN ANALYSIS OF THE ADMITTED FACTS, THUS, R EVEALS THAT THE ASSESSEE IS THE RIGHTFUL CLAIMANT OF THE COMPENSATION AMOUNT, DETERMINED AT RS. 43.55 LACS AS ON 31/3/1988, AND THE ONLY QUESTION OR ISSUE THAT SURVIVES OR ARISES IS QUA ITS QUANTUM. THE ONLY IMPACT OF THE ASSESSEE BEING REQUIRED TO SECURE THE JUDGMENT DEBTOR IN ITS RESPECT, IS THAT THE ASSESSEE CANNOT BE SAID TO HAVE FULL (ABSOLUTE) LEG AL TITLE TO THE SAME, SO AS TO DEAL WITH IT IN ANY MANNER HE CHOOSES TO, THOUGH HAS ALL THE BEN EFICIAL RIGHTS THEREIN, I.E., HIS OWNERSHIP THEREOF IS DE FACTO THOUGH PERHAPS NOT DE JURE . AS REGARDS THE QUANTUM, TO WHICH THE LEGAL DISPUTE IN FACT EXTENDS TO, ALL THE AVAILABLE EVIDENCE POINTS TO THAT BEING THE MINIMUM AMOUNT THAT THE ASSESSEE WOULD STAND TO RECEIVE, AT LEAST AS ON 15/4/1992, THE DATE OF THE BANK DEPOSITS, AND FROM WHICH DATE INTEREST INCOME THERETO, WHICH STANDS BROUGHT TO TAX BY THE REVENUE, ARISES REGULARLY, SO THAT THE SAME WOULD NOT STAND TO BE DISTURBED IN ANY MANNER . AS SUCH, NOTWITHSTANDING THE DOCTRINE OF RESTITUT ION, TO WHICH THERE IS NO QUARREL, NOR COULD POSSIBLY BE, THE ASS ESSEES RIGHTS IN THE INTEREST AMOUNT IS TOTAL. THE RELIANCE ON THE DECISION IN THE CASE OF CIT VS. HINDUSTAN HOUSING AND LAND DEVELOPMENT TRUST LTD . (SUPRA) IS ALSO INAPPOSITE IN VIEW OF THE FOREGOI NG FACTUAL FINDINGS. IN FACT, THE FACTS OF THE INSTANT CASE AR E ON A MUCH FIRMER FOOTING, HAVING SURVIVED JUDICIAL SCRUTINY BY THE COURTS OF LAW, IN CLUDING BY THE HONBLE HIGH COURT, AND ON MORE THAN ONE OCCASION. FURTHER, IT WOULD ALSO N OT BE OUT OF PLACE TO MENTION THAT THE APEX COURT IN RAMA BAI V. CIT (1990) 181 ITR 400 (SC) HAS CLARIFIED THAT INTERES T INCOME, BEING ESSENTIALLY A FUNCTION OF TIME, WOULD ARISE FROM YEAR TO YEAR, I.E., OVER THE PERIOD TO WHICH IT RELATES, THAN WITH REFERENCE TO THE DATE ON WHICH IT IS AWARDED. AGAIN, THE FACTS IN THE INSTANT CASE ARE ON A MUCH FIRMER FOOTING INASMUCH AS NOT ONLY THE INTEREST STANDS AWARDED AND RECEIVED, WE FIND THAT THE IMPEN DING DISPUTE WOULD NOT IN ANY MANNER IMPACT IT ADVERSELY. THE INTEREST ARISING ON THE IMPUGNED BANK DEPOSITS FOR AN AGGREGATE OF RS. 43.55 LACS THUS STANDS ACCRUED FOR THE RELEVANT YEARS. CONTINUING FURTHER, WE ARE CONSCIOUS THAT THE REVENUE HAS ITSELF TREATE D THE PRINCIPAL SUM OF RS. 43.55 LACS AS NOT ACCRUED AS ON 31/3/1993, THE DATE ON WHICH THE PREVIOUS YEAR RELEVANT TO AY 1993-94 ENDS, WHILE WE HAVE FOUND THE COMPENSATION AMOUNT T O HAVE ACCRUED TO THE ASSESSEE AT LEAST TO THAT EXTENT. WE ARE NOT AWARE IF THIS ASPE CT HAS RECEIVED THE CONSIDERATION AND A DECISION BY THE APPELLATE AUTHORITIES FOR THAT YEAR , TO WHOSE ORDERS WE HAD NO ACCESS. ON I.T.A NO. 918 TO 921/COCH/2004 ASSTT. CIT, TRIVANDRUM V. N.C. KALADHARAN 15 PRINCIPLE, HOWEVER, IT MAY BE CLARIFIED THAT IT IS THE CORRECT LEGAL POSITION THAT IS RELEVANT, AND NOT THE VIEW THAT THE PARTIES MAY TAKE OF THEIR RIGHTS IN THE MATTER: CIT V. C. PARAKH & CO. (INDIA) LTD . (1956) 29 ITR 661 (SC); KEDARNATH JUTE MFG. CO. LTD. V. CIT (1971) 82 ITR 363 (SC). AS SUCH, OUR FINDING/S WOULD OBTAI N IN SPITE OF THE REVENUES STAND AFORESAID. THE ONLY QUESTION THAT THEREFORE WOULD A RISE CONSEQUENTLY IS WHETHER THE SUM OF RS. 43.55 LACS WAS RIGHTLY TAXABLE FOR THAT YEAR OR FOR THE YEAR WHEN THE ASSESSEE SECURES FULL/ABSOLUTE LEGAL RIGHTS THEREIN. THE SAI D QUESTION DOES NOT ARISE FOR CONSIDERATION IN THE PRESENT APPEALS. ALSO, THE LAW PROVIDES FOR THE INCLUSION OF AN INCOME IN THE TOTAL INCOME OF THE YEAR OF ACCRUAL O R RECEIPT (SEC. 5). WE DECIDE ACCORDINGLY. 7.4 HOWEVER, BEFORE WE CONCLUDE, WE MAY CLARI FY CERTAIN OTHER AND INCIDENTAL ASPECTS OF THE CASE. FIRSTLY, THE INTEREST WOULD ACCRUE IN ASSESSEES FAVOUR ONLY W.E.F. 02/11/1994; HIS MOTHER EXPIRING ON 01/11/1994, SO THAT INCOME U P TO THAT DATE WOULD STAND TO BE ASSESSED ONLY IN HER HANDS AND, IN VIEW OF HER DEAT H, ON HER LEGAL REPRESENTATIVES, AS WAS DONE BY THE REVENUE FOR THE ASSESSMENT YEAR 1993-94 . WE HAVE ALREADY CLARIFIED THAT THE ASSESSMENTS UNDER REFERENCE ARE ON THE ASSESSEE IN HIS INDIVIDUAL CAPACITY. SECONDLY, WE FIND THAT THE AO HAS ALSO INCLUDED SOME OTHER INCOM E IN HIS ESTIMATION OF THE ASSESSEES TOTAL INCOME, I.E., APART FROM INTEREST ON THE SAID BANK DEPOSITS. NO ARGUMENTS IN THIS REGARD WERE ADVANCED BY THE ASSESSEE BEFORE US, WHI CH WE FIND TO BE ALSO THE CASE BEFORE THE FIRST APPELLAT AUTHORITY. AS AFORE-STATED, A SU M OF RS. 77.13 LACS STANDS RECEIVED BY `G IN AUGUST, 1992, WHOSE ENTIRE ASSETS, INCLUDING THE SAID SUM, STANDS DEVOLVED IN THE ASSESSEE. THE ASSESSEE HAS NOT HEEDED TO THE NOTICE S/REMINDERS BY THE ASSESSING AUTHORITY FOR RETURNING AND/OR FURNISHING PARTICULARS OF INCO ME, IF ANY, FROM SUCH ASSETS. THE ESTIMATION OF THE NOMINAL SUM IN ADDITION TO THE IN TEREST ON THE BANK DEPOSITS BY THE AO IS, THUS, IN ORDER. THIRDLY, THE AO HAS NOT ALLOWED ANY CREDIT FOR THE TAX DEDUCTED AT SOURCE ON THE INTEREST INCOME, EVEN THOUGH TO BE FA IR TO HIM, THE ASSESSEE HAS ALSO NOT STAKED ANY CLAIM IN ITS RESPECT BEFORE ANY AUTHORIT Y, INCLUDING BEFORE US. WE CONSIDER IT AS RELEVANT AS THE AO HAS REFERRED TO THE SAME, SO THAT TAX HAS INDEED BEEN DEDUCTED. OF COURSE, THE ONUS TO ESTABLISH IT THROUGH EVIDENCE, ALSO EXHIBITING, IF ONLY PRIMA FACIE , THAT I.T.A NO. 918 TO 921/COCH/2004 ASSTT. CIT, TRIVANDRUM V. N.C. KALADHARAN 16 NO CREDIT IN ITS RESPECT HAS ALREADY BEEN AVAILED O F BY HIM, IS ON THE ASSESSEE. NEEDLESS TO ADD, THAT WHERE APPLICABLE, THE CREDIT FOR TDS WOUL D STAND TO BE ALLOWED PROPORTIONATE TO THE INTEREST SUBJECT TO TAX IN THE HANDS OF THE ASS ESSEE FOR ANY OF THE RELEVANT YEARS. IN THE EVENT OF THE ASSESSEE NOT PROVIDING DUE COOPERATION AND/OR ASSISTANCE TO THE AO IN REACHING A FIRM AND REASONABLE CONCLUSION WITH REGA RD TO THE STATED ASPECTS, THE ASSESSING AUTHORITY SHALL, AFTER RECORDING A FINDING/S TO THI S EFFECT, DECIDE ON THE SAME IN THE MANNER DEEMED APPROPRIATE UNDER THE CIRCUMSTANCES PER A SP EAKING ORDER. WE DECIDE ACCORDINGLY. 8. IN THE RESULT, THE APPEAL BY THE REVENUE FOR AY 1994-95 IS DISMISSED, WHILE THAT FOR ASSESSMENT YEAR 1995-96 PARTLY ALLOWED, AND THA T FOR AYS 1996-97 AND 1997-98, PARTLY ALLOWED FOR STATISTICAL PURPOSES. SD/- SD/- 1 5/2/2012 (N.R.S.GANESAN) (SANJAY ARORA) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: ERNAKULAM DATED: 29TH FEBRUARY, 2012 GJ, MISHRA COPY TO: 1. SHRI N.C.KALADHARAN, L/H OF LATE N. CHELLAPPAN, JAGATHY HOUSE, VELI ROAD, BEACH, TRIVANDRUM 2. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE -1(2), RANGE-1, TRIVANDRUM 3. THE COMMISSIONER OF INCOME-TAX (APPEALS)-I, TRIV ANDRUM. 4. THE COMMISSIONER OF INCOME-TAX, TRIVANDRUM. 5. D.R., I.T.A.T., COCHIN BENCH, COCHIN. 6. GUARD FILE . BY ORDER , (ASSISTANT REGISTRAR) ITAT, COCHIN BENCH