CIT-CHANDIGARH vs. AVINASH SINGH GREWAL

ITA/162/2009HC Punjab & HaryanaPHHC01084240200909 September 2013Author: MR. JUSTICE AJAY KUMAR MITTAL,MR. JUSTICE JASPAL SINGH4 pages
AI SummaryRemanded

What were the facts?

The assessee, Shri Avinash Singh Grewal, received interest income of ₹1,17,49,161/- in FY 2004-05 from Oriental Bank of Commerce on FDRs/MIDRs, funded by a compensation amount from a disputed property. The assessee contended that the interest was released upon submission of a security bond and that he was not the final owner due to ongoing court proceedings. The Assessing Officer taxed ₹75,86,009/- of this interest as the assessee's income for AY 2005-06. The CIT(A) deleted the addition. The Tribunal dismissed the revenue's appeal, following this Court's decision in CIT v. Karanbir Singh. The revenue appealed to the High Court.

What did the High Court hold?

The High Court allowed the revenue's appeal. It noted that its earlier decision in CIT v. Karambir Singh had been set aside by the Supreme Court and remanded for fresh consideration in light of CIT v. Ghanshyam. The Court observed that similar views were subsequently expressed in the cases of Smt. Burfi and Bir Singh (HUF). Consequently, the impugned order of the Tribunal dated 31.10.2008 was set aside. The case was remanded to the Tribunal for deciding the issue afresh after affording an opportunity of hearing to both parties, in accordance with law. The Court did not decide the substantive issue on merits.

What were the issues?

1. Whether the interest component paid by the reference court, which the respondent-assessee is a beneficiary of, is taxable as the assessee's income after receipt, in terms of the judgment in Rama Bai v. Commissioner of Income Tax, Andhra Pradesh (1990) 181 ITR 400? (Question of law) Assessee's contention: The assessee argued that the interest was released on submission of a security bond and he was not the final owner as court proceedings were ongoing. The CIT(A) accepted this contention and deleted the addition. Revenue's contention: The revenue argued that the Tribunal erred by relying on CIT v. Karanbir Singh, as the SLP against that decision was remanded by the Supreme Court to this Court for fresh decision in light of CIT v. Ghanshyam (2009) 315 ITR 1. The revenue relied on subsequent decisions of this Court in CIT, Faridabad v. Karambir Singh L/H of Late Shri Khushi Ram, CIT, Faridabad v. Smt.Burfi, and The CIT, Faridabad v. Bir Singh (HUF), Ballabgarh, to submit that the matter should be decided afresh based on the latest legal position.

Which sections of the Income-tax Act were involved?

Section 260-A

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No. 162 of 2009(O&M) Date of decision: 9.9.2013 Commissioner of Income Tax II, Chandigarh -----Appellant Vs. Shri Avinash Singh Grewal ----Respondent CORAM:- HON’BLE MR. JUSTICE AJAY KUMAR MITTAL HON'BLE MR. JUSTICE JASPAL SINGH Present:- Ms. Urvashi Dhugga, Advocate for the revenue. None for the respondent. Ajay Kumar Mittal,J.

1.

This appeal has been preferred by the revenue under Section 260-A of the Income Tax Act,1961 (in short, “the Act”) against the order dated 31.10.2008, Annexure A.3, passed by the Income Tax Appellate Tribunal,Chandigarh Bench-B (in short, “the Tribunal”) in ITA No.460/Chandi/2008, for the assessment year 2005-06. The appeal was admitted on 21.7.2009 to consider the question formulated in the order dated 28.4.2009, which reads as under:- “Learned counsel for the appellant states that the respondent-assessee in terms of judicial orders, is the beneficiary of the interest component paid by the Singh Gurbax 2013.09.24 14:51 I attest to the accuracy and integrity of this document High Court Chandigarh reference Court, and as such, the respond

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