Commissioner Of Income Tax, Trivandrum vs Autokast LTD.

Headnote Court Copy Facts Arguments Court observation Judicial Analysis Case Map Category Hierarchy Table of Content

2000 Supreme(SC) 1863

SUPREME COURT OF INDIA
Doraiswamy Raju : Ruma Pal : S.P.Bharucha
Commissioner Of Income Tax, Trivandrum
Versus
Autokast Limited
Case No. : 5391 of 1997
Date of Decision : 11/21/00

Important Points

Interest income received by an assessee is assessable to tax, consistent with established judicial precedent.

Subject

Taxation - Income Tax

Act Referred

INCOME TAX ACT: S.56

Headnote

(A) Income Tax - Assessment of interest income - Whether interest income is assessable to tax in the hands of the assessee - Interest income is held to be assessable to tax. (Paras 3, 4)

Facts of the case:
An appeal was filed by the revenue authority against a decision of the lower court which had ruled that interest income was not assessable to tax in the hands of the assessee.

Findings of Court:
The judgment and order under challenge are set aside, and the interest income is determined to be assessable to tax.

Issues: Whether, on the facts and in the circumstances of the case, the interest income is assessable to tax in the hands of the assessee.

Ratio Decidendi: The court held that the appeal must succeed based on the legal principles established in previously decided precedent regarding the taxability of interest income.

Result: Civil appeal allowed.

Legal Category Hierarchy

S.P.BHARUCHA, J.

(1) THE question that was before the High Court read thus :

"WHETHER, on the facts and in the circumstances of the case, the interest income is not assessable to tax in the hands of the appellant?"

(2) THE High Court answered the question against the Revenue. The Revenue is in appeal by special leave.

(3) IT is not now in dispute that the appeal must succeed, having to the Judgment AIR 1998 of this Court in Tuticorin Alkali Chemicals and Fertilizers limited v. Commissioner of Income Tax (227 ITR 172).

(4) THE civil appeal is accordingly allowed. The judgment and order under challenge is set aside. The question is answered in the negative and in favour of the Revenue. In other words, the interest income is assessable to tax in the hands of the assessee.

(5) NO order as to costs.