| Case ID |
f998db10-5004-4132-a607-5d54df9f35ae |
| Body |
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| Case Number |
IT REFERENCE No. 51 OF 1974 |
| Decision Date |
Jan 27, 1978 |
| Hearing Date |
|
| Decision |
The Tribunal concluded that the relinquishment of interest was made after it had accrued, without being based on any commercial considerations. The letter requesting to forgo the interest was deemed an after-thought. The decision favored the revenue, confirming that the interest income had indeed accrued to the assessee during the relevant previous year. The Tribunal disallowed the claim for the first time raised by the assessee, stating that it was not permissible to introduce new arguments at this stage. |
| Summary |
This case revolves around the assessment of interest income under the Income-tax Act, 1961. The assessee, a money-lending firm, had interest income accrued but later agreed to forgo it due to the debtor's financial difficulties. The Tribunal ruled that the interest had accrued and could not be disregarded based on the subsequent request to relinquish it. This case emphasizes the principles of accrual accounting and the importance of commercial expediency in tax assessments. The decision reinforces the stance that income recognized under the mercantile system cannot be negated without substantial grounds, highlighting the necessity for clear evidence when claiming commercial considerations in tax matters. Keywords: income tax, accrued income, commercial expediency, tax assessment. |
| Court |
Allahabad High Court
|
| Entities Involved |
Not available
|
| Judges |
Satish Chandra,
B.N. Sapru
|
| Lawyers |
R.K. Gulati for the Appellant,
Ashok Gupta for the Respondent
|
| Petitioners |
Gappumal Kanhaiyalal
|
| Respondents |
Commissioner of Income Tax
|
| Citations |
1979 SLD 963,
(1979) 117 ITR 78
|
| Other Citations |
CIT v. Birla Gwalior (P.) Ltd. [1973] 89 ITR 266 (SC),
CIT v. Shoorji Vallabhdas & Co. [1962] 46 ITR 144(SC),
H.M. Kashiparekh & Co. Ltd. v. CIT [1960] 39 ITR 706 (Bom.),
Poona Electric Supply Co. Ltd. v. CIT [1965] 57 ITR 521 (SC)
|
| Laws Involved |
Income-tax Act, 1961
|
| Sections |
5,
254
|