TMI Blog1996 (8) TMI 51X X X X Extracts X X X X X X X X Extracts X X X X ..... to the assessment year 1984-85 and consolidated order dated December 30, 1991, passed by the Tribunal in ITA No. 311/Ind. of 1988 and ITA Nos. 57 and 58/Ind. of 1990 relating to assessment years 1983-84, 1985-86 and 1986-87, respectively. The Tribunal referred the undernoted questions at the instance of the Revenue. The Tribunal also accepted the request of the assessee during consideration of the application registered as RA No. 181/Ind. of 1990 and 42 to 44/Ind. of 1992 and referred the undernoted questions at the instance of the assessee : At the instance of the Revenue : " Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that interest accrued on the debts in which legal action for recov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee then filed the appeal before the Tribunal. The Tribunal found that there was no debit of interest at all either to the accounts of the debtors or to any other account. The Tribunal allowed the appeal. On applications under section 256(1) of the Act, the Tribunal stated the case and referred the aforesaid questions. Miscellaneous Civil Case No. 596 of 1994 is registered on reference by the Tribunal at the instance of the Commissioner of Income-tax, Bhopal, under section 256(1) of the Act arising out of the Tribunal's consolidated order dated August 31, 1993, passed in ITA Nos. 476,223, 41,224 and 477/Ind. of 1993 pertaining to assessment years 1989-90 and 1990-91. In an identical fact situation, the Tribunal stated the case and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment years 1989-90 and 1990-91. Learned counsel for the non-applicant, on the other hand, submitted that the assessee was within its right in excluding the interest from the total income when such interest was not being received by the assessee. He submitted that the resolution dated March 23, 1979, was not in conflict with law. According to him, there was no justification for showing such interest without receiving the same and without the prospect of receiving it in the near future. The assessee thus formulated the policy to stop charging interest and such policy is not illegal or illogical. Counsel further submitted that the Tribunal took the reasonable and rational view in the matter. In support of his submission, he placed reliance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 95 and held that interest did not accrue during the whole of the period during which suits were filed for the recovery of loans and awarding of interest for the period was within the discretion of the court. It was thus held that the Tribunal was right that interest was not includible in the profits of the assessee because of this position. In CIT v. Naskarapara Jute Mills Co. Ltd. [1983] 141 ITR 384, the Calcutta High Court also took similar view and held that interest can accrue only on the date of decree. In view of the aforesaid decisions of the Allahabad High Court, the Orissa High Court and the Calcutta High Court, it is clear that the Tribunal was right in taking the view that such interest was not includible in the total income ..... X X X X Extracts X X X X X X X X Extracts X X X X
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