9911796707
TMI Blog2005 (11) TMI 29X X X X Extracts X X X X X X X X Extracts X X X X ..... ream/frozen desert was also separately entered into between these two companies. In consideration of the two agreements, the assessee-company received a sum of Rs. 5 crores for assignment of its trade mark and Rs. 8 crores for non-competition in manufacturing, selling and distribution of ice cream. The trade mark was assigned for a period of eight years while non-competition in ice cream was to last for ten years. In the course of the assessment, the assessee claimed that the amounts received by it from M/s. Brooke Bond Lipton India Limited were not exigible to tax. The Assessing Officer declined to accept that contention and declared the receipt exigible to tax in the hands of the assessee. Aggrieved, the assessee filed an appeal before t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arned counsel for the Revenue, however, argued that the instructions issued by the Central Board of Direct Taxes did not fall in line with the true and correct interpretation of the provisions of section 55 of the Act, and could not, therefore, be relied upon. The question whether the instructions issued by the Central Board of Direct Taxes are binding upon the Revenue and whether an appeal can be maintained even in the teeth of those instructions is no longer res integra. The Supreme Court has in Commissioner of Customs v. Indian Oil Corporation Limited [2004] 267 ITR 272, considered the question and held that the Revenue is not entitled to raise a contention contrary to the circular or instructions issued by the Central Board of Direct T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cial power and the statutory authority invested with such power has to act independently in arriving at a decision under the Act (vide Sirpur Paper Mill Ltd. v. CWT [1970] 77 ITR 6 (SC); [1970] 1 SCC 795). However, when there is a statutory mandate to observe and follow the orders and instructions of the Board in regard to specified matters, that mandate has to be complied with. It is not open to the adjudicating authority to deviate from those orders or instructions which the statute enjoins that it should follow. If any order is passed contrary to those instructions the order is liable to be struck down on that very ground. That is what has been held in some of the cases referred to by my learned Sister. Extending this principle which flo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contrary pronouncements from the apex court, there was unanimity in the decisions rendered by the two judges comprising the Bench. It was on the authority of the above pronouncement argued by Mr. Syali that the Revenue was not entitled to maintain the present appeal, especially when the Commissioner of Income-tax and the Tribunal had, apart from examining the issue in the light of the pronouncement of the Supreme Court, also placed reliance upon instructions issued by the Board, which instructions unequivocally applied to the fact situation in hand and made the capital receipt in the hands of the assessee exempt from capital gains tax. In the light of what is stated above and the authoritative pronouncements of the Supreme Court regardin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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