TMI Blog1994 (4) TMI 68X X X X Extracts X X X X X X X X Extracts X X X X ..... 1, has been filed for direction to the Income-tax Appellate Tribunal to draw up a statement of the facts of the case and to refer the following question of law for the opinion of this court : "Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal is correct in law in holding that the interest amount of Rs. 11,812.50 should be treated as revenue receipt and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest related to the period of pendency of the proceedings before the arbitrator and it was awarded on the amount to which the assessee was found entitled on account of the work executed by him under the contract. The Tribunal relied on the Supreme Court decision in T. N. K. Govindaraju Chetty V. CIT [1967] 66 ITR 465 to hold that the interest earned by the assessee was not liable to tax. An ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore, be held that the award was ex gratia. Learned counsel for the Revenue has placed reliance on Karam Chand Thapar and Bros. P. Ltd. v. CIT [1971] 80 ITR 167 (SC), CIT v. Govinda Choudbury and Sons [1993] 203 ITR 881 (SC), CIT v. Abbasbhoy A. Dehgamwalla [1992] 195 ITR 28 (Bom) to submit that interest on compensation would be a revenue receipt and whether interest should be treated as a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e referred to the High Court. Learned counsel submitted that a specific finding recorded by the Tribunal was that the amount of interest to the tune of Rs. 7,59,748 was awarded by the arbitrator ex gratia and in view of that finding, which was not challenged, the reference application was rightly rejected by the Tribunal and deserved to be rejected by this court also. We find substance in the su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... part of the assessment. It is not necessary to retain that amount of interest as part of the question. The remaining part does arise as a question of law from the order of the Tribunal and we direct the Tribunal to draw up a statement of the facts of the case and refer the following question for the opinion of this court : "Whether, on the facts and in the circumstances of the case, the Income-t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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