Ita/172/2009 Of The Commissioner Of Income Tax, Trichurm v. Catholice Syrian Bank Ltd

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM MONDAY, THE 29TH JUNE 2009 / 8TH ASHADHA 1931 ITA.No. 172 of 2009(T) ---------------------- ITA.378/1999 of I.T.A.TRIBUNAL,COCHIN BENCH .................... APPELLANT/RESPONDENTS: ----------------------------- THE COMMISSIONER OF INCOME TAX, TRICHUR. BY ADV. SRI.JOSE JOSEPH, SC, FOR INCOME TAX RESPONDENT/APPELLANT: ------------------------------- M/S.CATHOLIC SYRIAN BANK LTD., TRICHUR. THIS INCOME TAX APPEAL HAVING COME UP FOR ADMISSION ON 29/06/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.N.RAMACHANDRAN NAIR & C.K.ABDUL REHIM, JJ. ----------------------------------- I.T.A. No. 172 of 2009 -------------------------------------- Dated this the 29[th] day of June, 2009 J U D G M E N T---------------------- Ramachandran Nair,J. The question raised is whether the Tribunal was justified incancelling the assessment of income being the differencebetween the cost of acquisition and face value of Governmentsecurities. Assessee was returning income for earlier years andthe same was accepted by department. However later ReserveBank issued circular addressing banks not to remit tax on thedifference between the face value and cost of acquisition of theGovernment Securities. The issue raised is for the year prior toth date of the circular came into force. The Tribunal howeveraccepted the assessee's contentions and allowed the claim. Wedo not find anything with the Tribunal's findings becauseReserve Banks circular is obviously accepted by the departmentfor subsequent years and circular is nothing but an advice tobank not to pay tax on notional income. The fact that theassessee without contest paid tax for earlier years does not mean that they forfeit their right to contest liability for any subsequentyear. We therefore dismiss the appeal filed by the department. C.N.RAMACHANDRAN NAIR, JUDGE. C.K.ABDUL REHIM, JUDGE. okb