ORIENTAL BANK OF COMMERCE vs. ADDITIONAL COMMISSIONER OF INCOME TAX

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ITA/413/2017HC DelhiDLHC01248469201719 January 2018Bench: HON'BLE MR. JUSTICE S. RAVINDRA BHAT,HON'BLE MR. JUSTICE A. K. CHAWLA1 pages

AI SummaryAllowed

What did the High Court hold?

The High Court held that interest on overdue deposit is a crystallized liability. The Court relied on its previous order dated January 17, 2018, in an identical appeal filed by the assessee (ITA 57/2018). The reasoning was based on the principles laid down in the Supreme Court decision in Bharat Earth Movers Ltd. Vs CIT, (2000) 245 ITR 428 (SC), and the High Court's own decisions in Calcutta Co. Ltd. Vs. CIT, (1959) 37 ITR 1, and Kedarnath Jute Mfg. Co. Ltd Vs. Addl. Commissioner Of Income Tax, (1971) 82 ITR 363. The question of law was answered in favor of the assessee and against the Revenue. The appeal was allowed.

What were the facts?

The appeal was filed by Oriental Bank of Commerce (the assessee) against an order of the Additional Commissioner of Income Tax (the revenue). The assessment year(s) are not explicitly stated. The core issue revolves around whether interest on an overdue deposit constitutes a crystallized liability for tax purposes. The assessee had previously filed an identical appeal (ITA 57/2018) which was decided in its favor on January 17, 2018. The present appeal is based on the same grounds and legal question.

What were the issues?

1. Whether interest on overdue deposit is a crystallized liability and therefore, should be treated as such by the tax authorities? (Question of law) Assessee's contention: The assessee argued that interest on overdue deposit is a crystallized liability. This contention was supported by the High Court's decision in an identical appeal (ITA 57/2018) decided in favor of the assessee. Revenue's contention: The judgment does not record any specific arguments made by the Revenue in this appeal. However, the framing of the question of law implies the Revenue contested the assessee's position.

AI-generated summary — verify with the full judgment below

$~13 * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 413/2017

ORIENTAL BANK OF COMMERCE

..... Appellant

Through Mr. Rajat Navet, Adv.

versus

ADDITIONAL COMMISSIONER OF INCOME TAX ..... Respondent Through Mr. Rahul Chaudhary, Sr. Standing Counsel.

CORAM: HON'BLE MR. JUSTICE S. RAVINDRA BHAT HON'BLE MR. JUSTICE A. K. CHAWLA

O R D E R %

19.01.2018

The question of law urged in this appeal is whether interest on overdue deposit is crystallized liability and therefore, be treated as such by the tax authorities. An identical question was framed at the behest of the assessee in ITA 57/2018 and answered in its favour by order dated 17.1.2018. The Court then relied upon Bharat Earth Movers Ltd. Vs CIT, (2000) 245 ITR 428 (SC); Calcutta Co. Ltd. Vs. CIT, (1959) 37 ITR 1; and, Kedarnath Jute Mfg. Co. Ltd Vs. Addl. Commissioner Of Income Tax,(1971) 82 ITR 363.

For the same reasons, this appeal too needs to be allowed. The question framed is answered in favour of the assessee and against the Revenue. The appeal is consequently allowed.

S. RAVINDRA BHAT, J

A. K. CHAWLA, J JANUARY 19, 2018/rc

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