TMI Blog2002 (7) TMI 90X X X X Extracts X X X X X X X X Extracts X X X X ..... lding the taxation of interest on sticky loans credited to 'Interest Suspense Account' contrary to the decision consistently taken in the preceding years not to tax?" - "(iii) Whether, on the facts and circumstances of the case, the Tribunal was justified in holding that the expenditure on salary and uniform allowance paid to drivers was hit by the provisions of section 37(3A)?" - - - - - Dated:- 23-7-2002 - Judge(s) : DEEPAK VERMA., N. K. JAIN. JUDGMENT The judgment of the court was delivered by N.K. JAIN J.-Both these income-tax references have been heard as connected matters, as not only the parties in both the cases are the same but common questions of law are involved in both these cases. This order shall dispose of both t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nse account by the assessee-bank though accrued but difficult to recover and not in fact recovered, is liable to assessment for income-tax. It is a common ground that in the relevant assessment years the amount of interest in question has accrued in respect of doubtful loans and is not likely to be recovered. The amount has so far been not recovered by the assessee-bank and has been credited to "Interest Suspense Account". According to the Revenue, where any such interest has accrued and the assessee has debited the account of the holder, the difficulty of recovery would not make its accrual, non-accrual and section 5 of the Income-tax Act would make such an amount liable for assessment. As against it, learned counsel for the assessee-ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar dated October 9, 1984, was binding under section 119 and that the interest suspense account was not liable to be taxed from the assessment year 1979-80 and onwards. In view of the law as laid down by the apex court, questions Nos. (i) and (ii) referred to us, are, therefore, liable to be and are accordingly answered in the negative, i.e., against the Revenue. Coming to question No. (iii) in I.T.R. No. 58 of 1997, our answer to this question turns on the interpretation of section 37, particularly that of sub-sections (3A) and (3B) as they stood before their deletion. The dispute pertains to the dress allowance paid to the drivers by the assessee-bank. Sub-section (3A) provided that the expenditure incurred by an assessee on any one o ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
