1990 (8) TMI 126

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....is is an application under section 256(2) of the Income-tax Act, 1961. The Department has sought to raise two questions as questions of law. But rule was granted in respect of question No. 1 only. That question reads thus : "Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that, in the case of a banking company following the mercantile system ....

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....nk was following the mercantile system of accounting and, therefore, interest even on sticky loans had accrued to it as income. Finding, however, that the Central Board of Direct Taxes had issued certain instructions by means of a circular issued in September, 1984, as follows : "On a subject like this, it appears futile that two organisations of the Government, both functioning under the Minis....

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....lity of interest income in the light of the aforesaid circular. The said circular, it appears, was withdrawn by the Board in February, 1986, i.e., soon after the judgment of the Supreme Court was pronounced in State Bank of Travancore's case [1986] 158 ITR 102. The question raised evidently is whether the Tribunal was justified in holding the income by way of interest on sticky loans had not....

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....n of law. It may, however, be mentioned that Shri Jetley, learned counsel for the Department, suggested that this court should reframe the question and direct the Tribunal to draw up the statement of the case and refer such reframed question as a question of law for opinion under section 256(2) of the Act. While this court has power to reframe questions to bring out the real controversy betw....