COMMISSIONER OF INCOME-TAX VS RAASI CEMENT LTD.
2001 PTD 2180
[239 I T R 596]
[Andhra Pradesh High Court (India)]
Before Syed Shah Mohammed Quadri and V. Rajagopala Reddy, JJ
COMMISSIONER OF INCOME‑TAX
Versus
RAASI CEMENT LTD.
Income‑tax Case No.22 of 1992, decided on 07/07/1997.
Income‑tax‑‑‑
‑‑‑‑Reference‑‑‑Income or capital‑‑‑Other sources‑‑‑Tribunal justified in holding that interest earned on borrowed capital constituted capital receipts and that it was not assessable as income from other sources‑‑‑No question of law arose‑‑‑Indian Income Tax Act, 1961, Ss.56. & 256.
Held, dismissing the application to direct reference, that the Tribunal was justified in holding that the amounts representing interest on borrowed capital constituted capital receipts in the assessee's hands and could not be brought to tax under the head "Other sources" for the assessment year 1981‑82. No question of law arose from its order.
CIT v. Nagarjuna Steels Ltd. (1988) 171 ITR 663 (AP) fol.
S.R. Ashok for the Commissioner.
S. Ravi for the Assessee.
JUDGMENT
SYED SHAH MOHAMMED QUADRI, J.‑‑‑-This application is filed under section 256(2) of the Income Tax Act, 1961. The Revenue seeks a direction to the Income‑tax Appellate Tribunal to refer the following question to this Court for opinion, which is said to have arisen from the order of the Tribunal, dated July 10, 1990, in R.A. No.14/Hyd. of 1986:
"Whether, on the facts and in the circumstances of the case, the Income‑tax Appellate Tribunal is correct in law in holding that amounts of Rs.360, Rs.79,100, Rs.18,909, Rs.1,506 and Rs.17,301 earned by the assessee constitute capital receipts in the assessee's hands and cannot be brought to tax under the head 'Other sources' for the assessment year 1981‑82?"
The amounts referred to in the question represent interest on borrowed capital. The Tribunal took the view that those amounts are capital receipts and cannot be added to the interest.
This question is covered by a judgment of the Division Bench of this Court in CIT v. Nagarjuna Steels Ltd. (1988) 171 ITR 663 which is against the Revenue and in favour of the assessee. We, therefore, see no reason to direct the Tribunal to refer the said questions I.T.C. is, therefore, dismissed.
M.B.A./252/FCCase dismissed.