TMI Blog1992 (1) TMI 146X X X X Extracts X X X X X X X X Extracts X X X X ..... ar. Different prices were fixed for different zones. This zonal classification was contested by the assessee and other few sugar mills in writs filed before the High Court. Pending final disposal of the writ petitions, the assessee was allowed by the High Court to collect the price for the levy sugar as before upon two conditions, namely : (1) the assessee should furnish bank guarantee for difference in price allowed to be collected and (2) that the assessee would be liable to pay interest on such excess collection at the rate of 12.5% p. a., if ultimately the writ petitions are decided against it, from the date of such collection till the date of payment into the Sugar Cess Fund. The amount on being refunded had to be credited to the Sugar Cess Fund, governed by the provisions of the Levy Sugar Price Equalisation Fund Act, 1976. 4. In accordance with Interim order passed by the High Court as above, the assessee furnished bank guarantee and also undertook to pay interest at the stipulated rate on the amount refunded. Thereafter, the assessee filed a petition before the Supreme Court of India praying for permission to intervene in certain connected matters which were pending b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also invited our attention to the petition filed by him dated 9th August, 1991 before the Tribunal praying for permission to address arguments on the strength of the Supreme Court judgment, though the issue was covered against the assessee by the order of the Tribunal for the earlier assessment years. Mr. S. C. Sen, learned departmental representative objected to this plea of Mr. Khanna and contended that we should not allow the settled matter to be reagitated before us. In this connection, he referred to the judgment of the Madras High Court in the case of CIT v. L. G. Ramamurthi [1977] 110 ITR 453 in support of his stand. 8. We have given our most anxious consideration to the preliminary objection raised by Mr. Sen. In L. G. Ramamurthi's case, the Madras High Court held that the Income-tax Appellate Tribunal being a fact finding body should not differ from its own decision rendered in a particular assessee's case, provided there was no change in the facts or in the legal position. Bearing in mind the above legal position and having due regard to the principle of judicial discipline and propriety, let us analyse the position before us. The mere fact or circumstance that has com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that though the Supreme Court rendered its decision only on 13-3-1990 the liability to pay interest accrued from year to year from the very inception : (1) CIT v. T. N. K. Govindarajulu Chetty [1987] 165 ITR 231 (2) Rama Bai v. CIT [1990] 181 ITR 400 (3) K. S. Krishna Rao v. CIT [1990] 181 ITR 408. He also cited certain decisions in support of his contention that events taking place subsequent to the close of the accounting year can be projected backwards in deciding the nature of the liability : (1) CIT v. Chodavaram Co-operative Sugars Ltd. [1987] 163 ITR 420 (AP) (2) CIT v. Investigation Security Service (India) (P.) Ltd. [1990] 182 ITR 358 (AP) 10. Mr. Sen for the department supported the orders of the Assessing Officer and the CIT(A) and relied on the earlier order of the Tribunal cited supra in the assessee's own case. He submitted that the liability can be ascertained only when the High Court proceeds to give effect to the judgment of the Supreme Court dated 13-3-1990 and not before and, therefore, it would be premature to conclude that the assessee is liable to pay interest. He further submitted that the liability to pay interest was only a contingent liabilit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... encement, without thirty days from the date on which such excess realisation was made, credit to the Fund, the amount representing such excess realisation, together with interest due thereon at the rate of twelve and a half per cent, per annum from the date on which such amount was realised by him. " It is clear from the above provision that the assessee is liable to pay interest the moment it had commenced collecting price for the levy sugar as per Interim order of the High Court. This is a statutory liability and merits deduction on this ground alone. The collection of the excess price is saddled with the statutory liability to pay interest. The decision of the Supreme Court in CIT v. Hindustan Housing Land Development Trust Ltd. [1986] 161 ITR 524 is authority for the proposition that ' income ' does not arise or accrue until final adjudication of the dispute or the rights of the parties thereto. The decision of the Supreme Court in T. N. K. Govindarajulu Chetty's case is authority for the proposition that with regard to the interest income, though the dispute is settled finally in a particular year, the same has to be spread over various years in which it arose and is to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y to the constituents. The ratio of this decision of the Andhra Pradesh High Court, in our view, is clearly applicable to the case before us. The assessee, while it was always liable to return the excess collection into the Fund, was also liable to pay interest thereon. The liability, according to us, is not contingent, but a real and ascertained liability. It will be seen that the present case also falls within the ratio of T. N. K. Govindarajulu Chetty's case. The Levy Sugar Price Equalisation Fund Act itself provided, by section 3(2)(b) for interest to be paid at the prescribed rate on the excess collection paid into the Fund. The principal question whether the assessee was liable to repay the excess collection remained to be decided. This issue was ultimately decided on 13-3-1990 by the Supreme Court. The Supreme Court declared the law and the rights and liabilities of the assessee from the very inception. The result is that the assessee has to return the excess collection into the Fund with interest. The interest is payable every year for the entire period during which the collection remained in the coffers of the assessee. The interest, therefore, accrued year to year. Applyi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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