2000 (12) TMI 224

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....n the case of Gaddore Tools of the Income-tax Appellate Tribunal, Delhi (SB) and Aero Leather (P.) Ltd v.UnionofIndia[1992] 194 ITR 7. Subsequently, the law was amended with retrospective effect by the Finance Act, 1990 and as such the receipts became taxable. Accordingly, the income was enhanced by the Assessing Officer and interest under sections 234B and 234C was charged. The Assessing Officer did not accept the explanation of the assessee that there was a bona fide intention of the assessee, as the Special Bench decision was available and accordingly the assessee was of the view that he was not liable to pay tax on account of cash compensatory support, as it was treated as capital in nature. The CIT (Appeals) also confirmed the order of....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....d also perused the material on record. After considering the material and submissions, we are of the view that assessee deserves to succeed here. This is not in dispute that the decision of theSpecialBeachin the case of Gaddore Tools (P.) Ltd was available and in view of this decision the assessee did not pay advance tax on the amount received as Cash Compensatory Support. The amendment came in the year 1990 and the estimate was filed much earliers i.e., on6-11-1989. Therefore, it cannot be said that there was any mala fide intention, on the part of the assessee. The decision in the case of Aero Leather (P.) Ltd where the Hon'ble High Court has observed as under.- "It was contended in respect of assessment year 1987-88, the position of l....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....Therefore, the assessee's contention was bona fide and accordingly tax was not paid by him. The CBDT while exercising powers specified under section 119(2)(a) decided to authorise Chief Commissioner and Director General, Investigation to reduce or waive penal interest charged under the aforesaid sections in the circumstances, where as a result of any retrospective amendment of law or the decision of the Supreme Court, after the end of the relevant previous year, certain receipts which were hitherto treated as exempt, became taxable. Since no advance tax would normally be paid in respect of such receipts during the relevant financial year, penal interest is levied for the default in payment of advance tax." These instructions were issued by ....