TMI Blog1999 (3) TMI 659X X X X Extracts X X X X X X X X Extracts X X X X ..... required. Therefore, the assessee-company raised loans, and out of the loan amounts, whichever amount is found to be not immediately necessary for attending to the current construction work, was deposited in Fixed Deposits and it had earned income. The question is whether the income earned during the construction stage of the factory is liable to be taxed as income from other sources or it should go in reduction of the actual cost of the plant machinery to the assessee. The assessee raised loans by public issue of convertible debentures to an extent of ₹ 8.6 crores and the funds thus raised were partly kept as Fixed Deposits with Banks or with U.T.I. for obtaining bank guarantee or letter of credit against security of the same. Since there was delay in implementation of the project, some loans were given as intercorporate deposits to reduce the interest burden payable to debenture holders. The assessee-company had capitalised the interest paid on convertible debentures and the interest received on Fixed Deposits/Units of UTI and ICDs was reduced from the interest paid and finance cost. 3. For the assessment year 1997-98, a return was filed on 9-12-1997 as against ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n, namely : (i)any arithmetical errors in the return, accounts or documents accompanying it shall be rectified; (ii)any loss carried forward, deduction, allowance or relief, which, on the basis of the information available in such return, accounts or documents, is prima facie admissible but which is not claimed in the return, shall be allowed; (iii)any loss carried forward, deduction, allowance or relief claimed in the return, which, on the basis of the information available in such return, accounts or documents, is prima facie inadmissible, shall be disallowed : Provided further that where adjustments are made under the first proviso, an intimation shall be sent to the assessee, notwithstanding that no tax or interest is found due from him after making the said adjustments. The additional income sought to be added by the Assessing Officer, as can be seen from the above proviso, does not fall under any of the items (i), (ii) and (iii) quoted above. (2) The assessee filed a revised return and in such a case section 143(1B) which came into the statute book by Finance Act, 1990, with retrospective effect from 1-4-1989, should be applied. S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... measures. In the instant case, the TRO had issued summons requiring assessee s presence and inviting attention to section 32 of the Code of Civil Procedure which, inter alia, provided for a fine of ₹ 10,000 for non-compliance. Thus the pressure was being put on the assessee to discharge the tax dues immediately. In the matters of stay urgency should be the prime consideration of the tax authorities as well as the Tribunal since a quick decision one way or the other on the assessee s application would be beneficial and fair to both the parties. Therefore, the Commissioner should pass an order on assessee s application and till such an order was passed the impugned demand was held to be stayed. The order would stand vacated after 7 days from the date of service of Commissioner s order on the issue. The Delhi Tribunal in the above decision relied upon the Calcutta High Court decision in the case of Susanta Kumar Nayak v. Union of India [1990] 185 ITR 627 where it is held that non exercise of discretion the ground that the assessee had other remedies is not valid. In this connection, our attention is invited to page 37 of paper book which represen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceding assessment year, namely, 1996-97 which was furnished at pages 4-11 of the paper book filed at the time of hearing on the present stay application and in that order the Tribunal had completely surveyed the full scope of section 143(1)(a) and also laid down the circumstances under which prima facie adjustments can be made while sending intimation under section 143(1)(a). In that year, the addition made to the income aggregate to ₹ 6,57,67,660 and the addition was felt justified in view of the Hon ble Supreme Court s decision in Tuticorin Alkali Chemicals Fertilisers Ltd. v. CIT [1993] 93 Taxman 502 . In that case, one of the parties before the Supreme Court was a company which had chosen not to keep its surplus capital idle but decided to invest it fruitfully just like in this case. While deciding the issue, the Hon ble Supreme Court held that the fruits of such investment would clearly be of revenue nature. The Id. advocate for the assessee brought to our notice that there is a latest Supreme Court decision taking apparently a different view than the one taken in the case of Tuticorin Alkali Chemicals Fertilisers Ltd. (supra). It is sought to be impressed on us that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to Mrs. R. Mani Goyal v. CIT [1996] 217 ITR 641/ 85 Taxman 139 .The Hon ble Allahabad High Court held, in view of the CBDT Circular No. 334 [F. No. 400/3 /81-ITCO] dated 3-4-1982, that the stay should be granted. The text of the CBDT circular is as follows : 1. One of the points that came up for consideration in the 8th meeting of the Informal Consultative Committee was that income-tax assessments were arbitrarily pitched at high figures and that the collection of disputed demands as a result thereof was also not stayed in spite of the specific provisions in the matter in section 220(6). 2. The then Deputy Prime Minister had observed as under : ... where the income determined on assessment was substantial- ly higher than the returned income, say, twice the latter amount or more, the collection of the tax in dispute should be held in abeyance till the decision on the appeals provided there were no lapse on the part of the assessee. 3. The Board desires that the above observations may be brought to the notice of all the Income-tax Officers working under you and the powers of stay of recovery in such cases up to the stage of first appeal may b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peal. As already stated, on the basis of this decision, the learned advocate for the assessee contended that since the assessee won the appeal before the Tribunal on this very point for the immediately earlier assessment year, i.e., 1996-97, according to the CBDT Circular as well as the Gujarat High Court which clarified the meaning of the CBDT circular, stay of the impugned demand is necessarily to be granted. The ld. Departmental Representative, opposing the stay application, referred to page No. 2 para No. 5 of the stay application filed by the applicant before this Tribunal, which is as follows : 5. With a view to buy peace and to avoid protracted litigation, the applicant had filed a petition under the Voluntary Disclosure of Income Scheme, 1987 on 8-12-1997. This petition became invalid since the taxes could not be paid due to the financial problems faced by the applicant. Thus, it was contended by the ld. Departmental Representative that the assessee itself had disclosed the disputed amount in this appeal. The {earned advocate for the assessee submitted in reply that ₹ 1 crore paid towards TDS was with the department which is to be adjuste ..... X X X X Extracts X X X X X X X X Extracts X X X X
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