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GUJARAT HIGH COURT
A.R. DAVE, A.M. KAPADIA, JJ
COMMISSIONER OF INCOME-TAX – Appellant
Versus
AJOD INVESTMENTS PVT LTD – Respondent
INCOME TAX REFERENCE No 197 of 1991
For the Appellants/Petitioners: MR MANISH R BHATT
For the Respondents: MR B.D. KARIA
The court upheld previous judgments stating no tax obligation exists on uncredited interest amounts per Section 194(A)(1).
Headnote:The case concerns a reference under Section 256(1) of the Income-tax Act, 1961, questioning the legality of the Appellate Tribunal's cancellation of interest charged under Section 201(1A). The tribunal ruled the interest due from the assessee was neither paid nor credited. Citing I.T.R. No.223/1991, the court concurs with this prior judgment, determining the question in favor of the respondent. The case is hereby disposed of without costs.
| Table of Content |
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| 1. question of law on interest cancellation (Para 1 , 2) |
| 2. agreement with prior judgment on tax liability (Para 3) |
JUDGEMENT
(Per : MR.JUSTICE A.R.DAVE) 1.At the instance of the revenue, the following question of law arising out of an order passed by the Income-tax Appellate Tribunal, Ahmedabad Bench-A has been referred to this Court under the provisions of Section 256(1) of the Income-tax Act , 1961 (hereinafter referred to as the "Act").
"Whether, the Appellate Tribunal is right in law and on facts in cancelling the interest charged under Section 201(1A) of the Income-tax Act , 1961?"
2.Learned Standing Counsel Shri Tanvish Bhatt has appeared for the applicant-revenue whereas learned advocate Shri B.D. Karia has appeared for the respondent-assessee.
3.The learned advocates appearing for the parties have fairly submitted that the question of law, which has been referred to this Court in this Reference, has been decided by this Court in I.T.R. No.223/1991 . 4.It has been submitted by the learned advocates that in the instant case also, the amount of interest, which was to be paid by the assessee to the concerned creditors during the relevant assessment year, was neither paid nor their accounts had been credited by the amount of interest and, therefore, there was no liability on the part of the assessee to deduct the amount of tax on the said amount of interest as per the provisions of Section 194 (A) (1) of the Act 5.In view of the aforestated undisputed fact, we are in respectful agreement with the judgement delivered in the case of I.T.R. No.223/1991 and decide the question referred to this Court in the affirmative i.e. in favour of the assessee and against the revenue.
The Reference stands disposed of with no order as to costs.
(A.R. DAVE,J.) (A.M. KAPAIDA,J.) siji
