C I T vs. NEPAL SINGH

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ITA/51/2008HC Punjab & HaryanaPHHC01080509200811 April 2008Author: MR JUSTICE RAKESH KUMAR GARG,MR. JUSTICE SATISH KUMAR MITTAL2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court declined to entertain the appeal, stating that no substantial question of law survived for consideration. This was because the Court had previously dismissed similar appeals raising the identical question of law in a judgment dated 26.3.2008 in ITA No.490 of 2007 and connected matters. Therefore, the High Court found the present appeal to be without merit and dismissed it. The specific reasoning of the ITAT on the issue of interest accrual during pending litigation is not detailed in this High Court judgment, as the High Court's decision was based on precedent. The operative direction was to dismiss the appeal.

What were the facts?

The Commissioner of Income Tax, Faridabad (appellant-revenue) filed an appeal under Section 260A of the Income-tax Act, 1961, against an order dated 29.3.2007 passed by the Income-Tax Appellate Tribunal (ITAT), Delhi Bench 'I'. The appeal pertains to the assessment year 2002-03 and concerns the assessee, Sh. Nepal Singh. The dispute revolves around whether interest accrues and can be subjected to tax when litigation concerning it is pending and has not attained finality. The High Court noted that similar appeals with the same question of law had already been dismissed by it.

What were the issues?

1. Whether, on the facts and circumstances of the case, the Hon'ble ITAT is right in holding that if litigation was pending before a Court and had not attained finality, interest would not accrue and could be subjected to tax only when it was finally determined? (Question of law turning on the interpretation of accrual of income). Assessee's contentions: Not recorded in the judgment. Revenue's contentions: The revenue argued that interest accrues and is taxable even if litigation is pending and has not attained finality. The revenue relied on the principle that income accrues when the right to receive it becomes certain, irrespective of actual receipt. The judgment does not explicitly name any specific authorities, circulars, or precedents relied upon by the revenue.

Which sections of the Income-tax Act were involved?

Section 260A

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Date of decision: 11.4.2008 The Commissioner of Income Tax-Faridabad ......Appellant Versus Sh. Nepal Singh,s/o Sh. Likhy Ram, Village sJharsaintly, Ballabgarh, Faridabad ......Respondent

CORAM:- HON'BLE MR.JUSTICE SATISH KUMAR MITTAL HON'BLE MR.JUSTICE RAKESH KUMAR GARG * * * Present: Mr. Yogesh Putney, Advocate for the appellant-revenue. * * * Rakesh Kumar Garg, J .

1.

The revenue has filed the present appeal under Section 260A of the Income-tax Act, 1961 (hereinafter referred to as the “Act”) against the order dated 29.3.2007 passed by the Income-Tax Appellate Tribunal, Delhi Bench 'I', in ITA No.2768/Del/2005 for the assessment year 2002-03 raising the following substantial question of law:- “Whether on the facts and circumstances of the case, the Hon'ble ITAT is right in holding that if the litigation was pending before a Court and had not attained finality, interest would not accrue and could be subjected to tax only when it was finally determined?”

2.

The appeals of the revenue raising the similar question of law as raised in this appeal have already been dismissed by this Court vide -2- judgement dated 26.3.2008 passed in ITA No.490 of 2007 and other connected matters.

3.

In the light of the above fact, no substantial question of law survives for our consideration in this appeal and accordingly, we decline to entertain the present appeal. Hence, this appeal is without any merit and the same is dismissed.

(RAKESH KUMAR GARG) JUDGE April 11, 2008

(SATISH KUMAR MITTAL) ps

JUDGE

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