High Court Of Karnataka
CIT & Anr. vs. Vysya Bank
Section 263
Deepak Verma & K.L. Manjunath, JJ.
IT Appeal No. 242 of 2003
9th January, 2008
Counsel Appeared :
M.V. Seshachala, for the Appellants : S. Parthasarathi, for the Respondent
JUDGMENT
K.L. Manjunath, J. :
This appeal is by the Revenue challenging the order passed by the Tribunal, Bangalore Bench in case No. 7/Bang/2001 raising the following substantial questions of law :
“1. Whether the Tribunal was correct in holding that the revisional authority cannot exercise its jurisdiction as the assessment order is not erroneous despite the assessment order being prejudicial to the interests of the Revenue ?
Whether the CIT was correct in holding that an amount of Rs. 7,41,81,955 chargeable interest towards incidence of tax passed on to the borrowers and allowed by the AO was erroneous and prejudicial to the interests of the Revenue which represented additional interest collected and was liable to be treated as chargeable interest as per the provisions of the Interest-tax Act. Whether the CIT was correct in holding that the lease rentals received by the assessee of Rs. 14,20,53,000 which was allowed by the AO was erroneous and prejudicial to the interests of the Revenue as the transaction was a pure finance transaction and the amount received was interest which was liable to the Interest-tax Act.”
We have heard the learned counsel for the parties. During the course of arguments, the learned counsel appearing for both the parties submit that in the case of the assessee under the income-tax proceedings, the matter is pending before the Settlement Commission at Chennai and that any order that may be passed by the Settlement Commission would have a bearing on the issue in the present appeal. Therefore, they request the Court to set aside the order passed by all the authorities and remand the matter to the AO to consider the case of the parties afresh, subject to the result of the orders to be passed by the Settlement Commission. Having due regard to the submissions made by the learned counsel appearing for the parties, we are also of the opinion that the appeal is to be allowed without answering the questions of law framed therein and remand the matter to the AO and direct the AO to keep the matter in abeyance till the orders are passed by the Settlement Commission and depending upon the outcome of the result of the Settlement Commission, the AO after hearing the parties shall pass an appropriate order.
Accordingly, the appeal is allowed and remanded the matter to the AO.
[Citation : 322 ITR 69]
