Rc/2/1992 Of Comnr.income Tax Visakhapatnam v. Rastriya Ispat Nigam Ltd.visakhapatnam

THE HON’BLE SRI JUSTICE V.V.S.RAOAND THE HON'BLE SRI JUSTICE RAMESH RANGANATHAN REFERRED CASE No.2 of 1992 ORDER:(per Hon’ble Sri Justice Ramesh Ranganathan) The questions, referred for our opinion under Section 256(1) ofthe Income Tax Act, 1961, read as under.-Asst.year 198384: “Whether on the facts and in the circumstances of thecase, the Tribunal was justified in holding that the interestreceipt of Rs.24,04,300/- should not be considered forbeing taxed as revenue?”-Asst.year 198485 “Whether on the facts and in the circumstances of thecase, the Tribunal was justified in holding that the interestreceipt of Rs.16,70,367/- should not be considered forbeing taxed as revenue?” The assessee is a public sector undertaking. During theprevious years 1983-1984 and 1984-1985 the assessee had notcommenced its business of manufacture of steel. For the previousyear ending 31.03.1983 and 31.03.1984 it earned interest ofRs.24,04,300/- and Rs.16,70,367/- respectively on its short-termdeposits. This interest received by the assessee was held astaxable by the assessing authority. On appeal, the Commissioner ofIncome Tax (Appeals) confirmed the order of assessment. Aggrieved thereby, the assessee carried the matter in appeal to theIncome Tax Appellate Tribunal which, following the decision of thisCourt in Commissioner of Income Tax v Nagarjuna Steels Limited[[1]], held that the interest received by the assessee was nottaxable and, accordingly, allowed the appeal. Thereafter thequestions referred to hereinabove are referred for our opinion. Sri.Y.Koteswara Rao, Counsel appearing on behalf of theassessee, would draw attention of this Court to the memo filed on21.09.2010 whereby the assessee had paid the tax demanded, inForm 2A under Rule 4(a) of the Kar Vivad Samadhan SchemeRules, 1998, on 22.03.1999 for the assessment years 1983-1984and 1984-1985, as it fell under the Kar Vivad Samadhan Scheme,1998. Counsel would contend that, since the matter has beensettled under Kar Vivad Samadhan Scheme, 1998, the questionsreferred for our opinion need not be answered. Sri Badri VenkatReddy, Standing Counsel for Income Tax, on instructions, agreesthat this is indeed the position. In view of the fact that the matter has already been settledunder the Kar Vivad Samadhan Scheme, 1998, we decline toanswer the reference. The Referred Case is disposed of accordingly. __________________ 28.09.2010vs [1](1988) 171 ITR 663 (V.V.S.RAO, J) ______________________________ (RAMESH RANGANATHAN, J)