Calcutta High Court
Uco Bank vs Commissioner Of Income Tax. on 25 November, 1991
Equivalent citations: (1993)111CTR(CAL)256
JUDGMENT
AJIT K. SENGUPTA, J. :
In this reference under s. 256(1) of the IT Act, 1961, for the asst. yrs. 1962-63, 1973-74 and 1974-75 the following common question of law has been referred to this Court :
"Whether, on the facts and in the circumstances of the case, and in view of the Circular dt. 6th October, 1952 of the CBDT r/w the subsequent Circular dt. 9th Oct, 1984 issued by the same authority, the Tribunal was right in confirming the taxing of the interest on the sticky advances as the income of the assessee even though they were credited to a suspensea account and not to the Profit & Loss Account ?"
2. Shortly stated the facts are that the assessee is a nationalised bank deriving income from business in banking activities.
3. The ITO made additions of Rs. 2,38,739, Rs. 12,97,506, and Rs. 18,84,752 to the disclosed income of the assessee respectively during the three years under consideration. These amounts represented interest on sticky advances which were debited to the debtors accounts but not credited to the Profit and Loss Accounts. Instead, these were credited to a suspense account on the ground that the realisation of the principal amounts themselves was in jeopardy. The case of the ITO was that the amounts themselves were taxable under the mercantile system of accounting followed by the assessee even though they were not credited to the Profit & Loss Accounts.
4. The assessee appealed to the CIT(A) but without success.
5. The assessee appealed to the Tribunal and contended that the aforesaid amounts should not have been subjected to tax as the income of the assessee. The Tribunal, however, respectfully following the decision of the Supreme Court in the case of State Bank of Travancore vs. CIT (1986) 158 ITR 102 (SC), upheld the order of the CIT(A) and dismissed the appeals filed by the assessee.
6. At the hearing before us Mr. Dilip Dhar led by Mr. R. N. Bajoria sought to contend that so far as the asst. yr. 1962-63 is concerned no assessment could have been made at all as the bank after nationalisation is not liable for any liabilities of the erstwhile company. We are afraid that we cannot allow Mr. Dhar to urge this contention as this contention was neither raised nor argued before the Tribunal or any of the authorities at any stage of the proceedings. No question of law arises on this issue and therefore this contention must be rejected.
7. It is not in dispute that this question is now concluded by the decision of this Court in the case of this assessee in IT Ref. No. 68 of 1989 (CIT vs. United Commercial Bank) where the judgment was delivered on 29th June, 1991. Following the said decision we answer the question in this reference in the affirmative and in favour of the Revenue.
There will be no order as to costs.
SHYAMAL KUMAR SEN, J. :
I agree.