COMMISSIONER OF INCOME-TAX VS HARIBHAI ESTATE (PVT.) LTD.
2001 P T D 915
[242 I T R 706]
[Supreme Court (India)]
Present: D. P. Wadhwa and M: B. Shah, JJ
COMMISSIONER OF INCOME‑TAX
Versus
HARIBHAI ESTATE (PVT.) LTD.
C.A. Nos 6131 and 6132 of 1995, decided on /01/.
nd
February, 2000. (Appeal from the judgment and order, dated March 12, 1987 of the Bombay High Court in I.T.A. No.28 of 1986).
Income‑tax‑‑‑
‑‑‑‑Reference‑‑‑Business‑‑‑Other sources‑‑‑Interest‑‑‑Interest on fixed deposits, temporary loans and arrears of sales deposit‑‑‑Whether income from business or from other sources‑‑‑Question of law‑‑‑Indian Income Tax Act, 1961, Ss. 28, 56 & 256.
Held, that the question whether interest on fixed deposit, interest on temporary loans and interest on arrears of sales deposit were to be considered as business income and not income from other sources was a question of law to be referred to the High Court.
B.B. Ahuja, Senior Advocate (S. Rajappa, S.R. Sharma and Sushma Suri, Advocates with him) for Appellant.
R.F. Nariman, Senior Advocate (Rustom B. Hathikhanwala, Advocate with him) for Respondent.
JUDGMENT
These appeals are directed against the judgment of the Bombay High Court, dated March 12, 1987, refusing the application of the Revenue filed under section 256(2) of the Income Tax Act, 1961. Earlier the Income‑tax Appellate Tribunal had rejected the application of the Revenue filed under section 256(1) of the Act. The questions pertain .to the assessment years 1979‑80 and 1980‑81. The questions on which reference was sought are as under:
Assessment year 1979‑80:
"(1)Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that interest of Rs. 1,09,753 on fixed deposit, interest of Rs. 6,16,356 on temporary loans and interest of Rs. 9,52,315 on arrears of sales deposit are to be considered as business income and not income from other sources?
(2) Whether, on the facts and in the circumstances of the case, and in law the Tribunal was right in holding that interest of Rs. 1,09,753 on fixed deposit, interest of Rs. 6,16,356 on temporary loans and interest of Rs. 9,52,315 on arrears of sales deposit are not taxable under the head 'Other sources'?"
Assessment year 1980‑81:
"(1) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the interest of Rs. 38,483 on fixed deposit, interest of Rs. 9,03,465 on temporary loans and interest of Rs. 11,69,621 on arrears of sales deposits are to be considered as business income and not income from other sources?
(2) Whether, on the facts and in the circumstances of the case, and in law, the Tribunal was right in holding that interest of Rs. 38,483 on fixed deposit, interest of Rs. 9,03,405 on temporary loans and interest of Rs. 11,69,621 on arrears of sales deposit are not taxable under the head 'Other sources'?"
After hearing learned counsel for the parties, we are of the view that the questions of law do arise from the order of the Income‑tax Appellate Tribunal. Accordingly, we direct the Income‑tax Appellate Tribunal to draw up the statement of case and refer the aforesaid questions of law to the High Court for its opinion.
The appeals are allowed. There shall be no order as to costs.
M.B.A./427/FCAppeals allowed.