M/S.R.S.RANGADAS V. THE ASST.COMMISSIONER OF INCOME TAX

ITTA/406/2005

AI Insights

The case involves M/s. R.S.Rangadas, Contractors, Hyderabad, who appealed against the order of the Income Tax Appellate Tribunal, Hyderabad, which had earlier ruled that the interest earned on an amount deposited in the bank, received as an interim measure under directions of the High Court, is taxable. The appellant contested this decision, arguing that the arbitral award itself was in dispute and pending adjudication before the High Court. However, the court referenced its previous rulings on similar issues, which had consistently held that such interest is taxable income. The appeal was thus dismissed, affirming the taxability of the interest income.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 765703 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 19-10-2022
• Assessment Year: misc
• Other Referred Cases: I.T.T.A.No.320 of 2005, I.T.T.A.No.168 of 2003, I.T.T.A.No.565/Hyd/2001
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: K RAJI REDDY
• Assessee Lawyers: A V KAUNDINYA
• Keywords: Arbitral Award; Income Tax; Interest on bank deposit; Interim measure; Taxable income
• Section: 260A

Judgement Text

"IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD WEDNESDAY ,THE NINETEENTH DAY OF OCTOBER TWO THOUSAND AND TWENTY TWO PRESENT THE HONOURABLE THE CHIEF JUSTICE UJJAL BHUYAN AND THE HONOURABLE SRI JUSTICE C.V. BHASKAR REDDY INCOME TAX TRIBU NAL APPEAL NO: 406 OF 2805 Appeal Under Section 260 A of the lncome Tax Act, 1961 against the order of the lncome Tax Appellate Tribunal, Hyderabad Bench \"8\" in ITA No. 565 / HYD/2001 ( A.Y. 1999-2OOO) dated 26-04-2005 preferred against the order of the Commissioner of lncome Tax ( Appeals) -ll, Hyderabad dated 22-06- 2001 in l.T.A. Nos. 25 , 89 & 88 DC. 2 (21 I CIT (A) -lU 2000-2001 preferred against the order of the Deputy Commissioner of lncome Tax, Circle '2(2), Hyderabad in PAN/GIR No. R-308 lOC.2(2) Between: M/s. R.S.Rangadas, Contractors, Hyderabad. AND The Asst. Commissioner of lncome Tax, Circle 2[2], Hyderabad. ...APPELLANT ...RESPONDENT Counsel for the Appellant: SRl. A. V. KRISHNA KOUNDINYA Counsel for the Respondent: SRI K. RAJI REDDY, SENIOR SC FOR INCOME TAX DEPT The Court made the following: JUDGMENT THE HON'BLE THE CHIEF JUSTICE UJJAL E HIIYAN AND THE HON'BLE SRI JUSTICE C.V.BHASKAR Ii.EDDY ITTA.No.4O6 of 2OO5 JUDGMENT: eet the Han'bte the Chpf Justte Uiat Bhugort) Heard Mr. A.V.Krishna Kaundinya, learned counsel for the appellant and Mr. K.Raji Reddy, learned Standing counsel lor Income Tax Department appearing for the re spondent. 2. This appeal has been preferred under Section 260A of the Income Tax Act, 196l (briefly the Act' hereinafter) against the order dated 26.04.2005 passed by the Income Tax Appellate Tribunal. Hyderabad Bench \"B\", in I.T.A.No.565/Hydl2OO1 for the assessmenr year 1999- 2000 3. While admitting the appeal vide the order dated 13.12.2OO5, substantial question of 1aw ^,as not framed. From the memorandum of appeal, we find that following is ( the substantral question of lau,: 'Whether on the facts and in the circumstaftces of the case, Tibunal LUas justiJied in holding that the interest earned on the amount deposited in the Bank receiued as an inteim measure under directions of tlte High Coutl is an income uLhen the arbitraL a utard itself is in dispute and pending adjudication before the High Court? 4. Mr. A.V.Krishna Kaundinya, iearned counsel for the appellant fairly submits that this substantial question was also one of the substantial questions of law in I.T.T.A.No.320 of 2005 filed by the appellant itself for the assessment year of 1997-98. Whilc disposing of LT.T.A.No.320 of 2005 vide order dated 21.09.2022, t]nrs Court held that Tribunal has followed its earlier decision dated 29.07.2OO2 in appeals filed by the appellant itself for the assessment years 1995-96 and 1996-97. 5. Against the order dated 29.O7.2OO2, appellant had preferred appeal before this Court under Section 260A of the Act being I.T.T.A.No.168 of 2003. This Court by order dated 02.09.2014 held that opening of assessment was valid and that interest accrued on interim award deposited in Bank was income chargeable to tax 6. Follou,ing the above decision, ITTA No.32O of 2005 was dismissed. 7 . That being the position, the substantial question of law as framed is answered in favour of the respondent and against assessee B. The present appeal is accordingly dismissed. Miscellaneous applications pending, if any, shall stand closed. However, there shall be no order as to costs. SD/. B.S. CHIRANJEEVI JOINT REGISTRAR //rRUE coPY// ,.\"tt[i o..,\".* To 1. The lncome Tax Appellate Tribunal, Hyderabad Bench B Hyderabad' 2. The Commissionei of lncome Tax ( Appeals) -ll, Hyderabad 3. The Deputy Commissioner of lncome Tax, Circle -2 (2)., Hyderabad' 4. The Asit. eommissioner of lncome Tax , Circle '2 (2) ' Hyderabad. 5. One CC to SRl. A. V. KRISHNA KOUNOINYA, Advocate [OPUC] 6. One CC to SRl. K. RAJI REDDY, SENIOR SC FOR INCOME TAX DEPT [OPUC] 7. Two CD Copies Prti lu 5larl rf u -{q N HIGH COURT HCJ & CVBRJ DATED:1 911012022 ORDER !TTA.No.406 of 2005 DISMISSING THE ITT'A WITHOUT COSI'S S'tri , {' o a 2 B t'li ?$n hn' frJr') "