TaxTMI 
TaxTMI 
2013 (3) TMI 440
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....tration and Conciliation Act, 1996. The arbitral tribunal made an award on 18 June 2004 in the amount of Rs. 179 crores together with interest at 10% per annum. Initially, the arbitral award was set aside by a Learned Single Judge of this Court, but on appeal, the proceedings were remanded back to the Learned Single Judge for fresh disposal. On 18 March 2009, the Learned Single Judge dismissed a Petition under Section 34 of the Arbitration and Conciliation Act, 1996 challenging the arbitral award. MSEDC filed an appeal before the Division Bench. By an order dated 2 May 2009, the Division Bench granted an interim stay of the execution of the award subject to MSEDC depositing an amount of Rs.179 crores and furnishing a Bank Guarantee for the balance of Rs.86 crores (the contention of DSL being that the total amount due inclusive of interest was Rs.265 crores). Against the order of the Division Bench, Special Leave Petitions were filed before the Supreme Court both by DSL and by MSEDC. The Supreme Court modified the conditions on which a stay of execution of the award was granted by the Division Bench in the following terms: "We are of the view that interests of justice ....
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....nished by the Assessing Officer to differ from the earlier decisions for A.Ys. 2009-10, 2010-11 and 2011-12 in the matter of the grant of a certificate under Section 197. Since no reasons were furnished for taking a view different from the view taken in the earlier years, the order dated 29 May 2012 was set aside and the Assessing Officer was directed to pass a fresh order on merits in accordance with law. Thereafter, a communication was issued by the Income Tax Officer on 22/23 November 2012 rejecting the application of the Petitioner. On a fresh petition filed under Article 226 of the Constitution, a Division Bench of this Court by an order dated 17 December 2012 noted that in the earlier order of the Court, the order of the CIT dated 14 May 2012 was not specifically set aside though it was contained in the communication dated 29 May 2012 to the Petitioner. Consequently, since the order of 14 May 2012 of the CIT had not been specifically set aside, the Income Tax Officer (TDS) was bound by the order of the CIT. In that view of the matter, the Division Bench quashed and set aside the order of the ITO (TDS) dated 22/23 November 2012 and made it clear that by the order of the Court ....
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....davit in reply has been filed in these proceedings. 8. On behalf of the Petitioner, it has been submitted that: (i) The arbitral award is yet to attain finality since the appeal against the decision of the Learned Single Judge, rejecting a Petition under Section 34 has been admitted and is pending consideration before the Division Bench; (ii) Unless and until the arbitral award attains finality, the Petitioner has no crystallised entitlement to receive the amount awarded and this cannot be treated as its income; (iii) The order of the Supreme Court dated 15 May 2009 makes it clear that while DSL was permitted to withdraw an amount of Rs.65 crores deposited by MSEDC, this was subject to its furnishing an additional Bank Guarantee to cover the entire amount; (iv) In the event that the Petitioner fails and the challenge to the arbitral award is upheld, the Petitioner would be liable to refund the entire amount of Rs.65 crores which has been withdrawn and would be liable to provide restitution to MSEDC under Section 144 of the Code of Civil Procedure, 1908. In the circumstances, it was urged that the interest which has resulted from the fixed deposit maintained with the Indian Bank in....
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.... been invested in a fixed deposit of Indian Bank which has marked a lien to the extent of Rs.65 crores; this corresponds to the amount of the Bank Guarantee which it has furnished. The interest which has accrued on the amount of the fixed deposit cannot be regarded at this stage as income which has accrued to the Petitioner. In view of the provisions of Section 144 of the Code of Civil Procedure, 1908, if the decree in terms of the award is varied or reversed in appeal, the Court which passed the decree or order is under a mandate on the application of any party entitled to any benefit by way of restitution or otherwise to cause such restitution to be made so as to place the parties in the position which they would have occupied but for such decree or order. The Court is empowered to make any orders including orders for the refund of costs and for the payment of interest. 11. The basis on which a show cause notice was issued to the Petitioner on 21 January 2013 is that what was disputed before the Division Bench of this Court is only the quantum of compensation. The show cause notice also proceeded on the basis that the Petitioner has absolute ownership of the funds to the extent ....
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....in a realistic manner". The Supreme Court held that the claim at increased rates on the basis of which necessary entries were made represented only hypothetical income and the amounts as brought to tax by the Income Tax Officer did not represent the income which had really accrued to the assessee-company during the relevant previous years". In Commissioner of Income Tax vs. Hindustan Housing and Land Development Trust Ltd., (1986) 161 ITR 524 the Supreme Court cited with approval the following principle laid down in Khan Bahaddur Ahmed Alladin & Sons vs. C.I.T.: (1969) 74 ITR 651. "Income-tax is not levied on a mere right to receive compensation; there must be something tangible, something in the nature of a debt, something in the nature of an obligation to pay an ascertained amount. Till such time, no income can be said to have accrued..." 13. The submission of the Revenue is that the order of the Supreme Court only required the Petitioner to furnish a Bank Guarantee of Rs.65 crores in respect of the amount which was deposited by the MSEDC and withdrawn. However, it is urged that there was no direction in regard to the interest which would accrue on the amount of Rs....