N.N.MATHUR,J. - (1.) HEARD Mr. Rajendra Mehta learned counsel for the applicant assessee and Mr. L.M. Lodha learned counsel for the Revenue.
(2.) THIS is an application under S. 256(2) of the IT Act, 1961, arising out of the order of the Tribunal, Jaipur Bench, Jaipur, rejecting the Ref. Appln. No. 117/Jp/1990 dt. 24th Jan., 1991, pertaining to the asst. year 1982 83 refusing to refer the following questions of law arising out of the order of the Tribunal in ITA No. 484/Jp/1986 dt. 15th Feb., 1990 : (1) Whether the learned Tribunal was right in law in holding the amount of interest on estate duty refund of late Shri Budhmal Dugar as not a capital receipt but as a revenue receipt liable to income tax for the asst. year 1982 83 ? (2) Whether the learned Tribunal was right in law in holding that the amount of interest is not to be spread over the year of payment to the date of actual refund of estate duty but is liable to be taxed in the asst. year 1982 83 because the refund voucher was received by the assessee on 20th April, 1981 ? (3) Whether the learned Tribunal was right in law in holding that interest was not liable to be taxed in the asst. year 1981 82 though the CIT made order for payment of interest on 12th Feb., 1981, and refund voucher was issued on 25th March, 1981 ? (4) Whether the learned Tribunal was right on facts and in law in holding that the system of account of the assessee was not mercantile but was cash ? (5) Whether the learned Tribunal was right in holding that the system of accounting for the asst. yr. 1981 82 and 1982 83 was cash when copies of interest account and other account for the asst. yrs. 1981 82, 1982 83 and other years were placed on records, which prove that interest, salary, etc. were adjusted at the end of the accounting year though not received or paid ? (6) Whether the learned Tribunal had material for the finding that the system of account was cash and not mercantile ? (7) Whether the learned Tribunal was right in ignoring the material evidence placed before it in the paper book and pointed attention was drawn during hearing ? (8) Whether the order of the Tribunal is not perverse on account of ignoring the material evidence placed in the paper book and referred to, relied upon in the course of hearing ? (9) Whether the finding of the Tribunal that system of accounting of the assessee during the asst. yrs. 1981 82 and 1982 83 was cash is not perverse ? (10) Whether the learned Tribunal was right in holding that method of accounting was cash when the assessment orders for the asst. yrs. 1978 79, 1979 80, 1980 81, 1981 82 and 1982 83 do not specify the method of accounting as 'cash' and no assessment order for any of the years was produced by the Revenue wherein the learned ITO had specified method of accounting as cash when number of orders were placed by the assessee wherein the learned ITO had specifically specified method of accounting 'mercantile' ? (11) Whether the learned Tribunal erred in drawing adverse inference against the assessee on account of some inadvertent mistakes committed in the returns of income ? (12) Whether the learned Tribunal was right in law in holding that question of interest under S. 215 could not be objected to in the appeal ? (13) Whether the learned Tribunal was right in law in holding that decision of the Rajasthan High Court in CIT vs. Golcha Properties Ltd. (1987) 61 CTR (Raj) 185 : (1988) 169 ITR 493 (Raj) : TC 4R.300 does not help the assessee ? The brief facts giving rise to this application are that one Budhmal Dugar the adoptive father of applicant Jabar Mal Dugar expired on 17th March, 1954. The estate duty payable on his property was assessed at Rs. 6,03,926 by the order of the Dy. CED, dt. 30th Oct., 1958. The assessee deposited the said amount but contested, which ultimately culminated in the order of the High Court, dt. 30th Nov., 1971, wherein this Court held that it is only 1/3rd share of the properties belonging to HUF of the deceased as 'Karta' and coparcener could pass on the death of the deceased and not the whole property. The assessing authority made a reassessment as per the directions of the judgment of the High Court and directed a refund of a sum of Rs. 4,66,184 by the order dt. 28th Feb., 1973. The petitioner assessee claimed interest under S. 64(7) of the ED Act on the amount of refund. This application was rejected by the CED. The petitioner approached to the High Court in second round, the High Court by its judgment dt. 20th July, 1979, directed CED to grant interest on the amount of refund to the petitioner. Accordingly the petitioner was paid amount of interest of a sum of Rs. 3,93,925 in the month of April, 1981. The amount of interest was payable on refund from the date of payment of estate duty i.e., on 28th Feb., 1973. It is alleged that a partition of the HUF between Jabar Mal and his sons took place in March, 1974 with respect to movable and immovable properties of the family worth Rs. 12,00,000. It was recognised as partial partition by the order of the ITO dt. 7th March, 1975. The petitioner assessee also claimed that amount of interest received after partition of the HUF was the capital receipt and not the revenue receipt liable to income tax. In alternate, it was contended that even if it is liable to tax, it is to be charged on accrual basis from year to year. The assessing authority rejected the contention and included the amount of interest in the taxable income of the previous year relevant asst. year 1982 83. On appeal, the CIT(A) Jodhpur confirmed the view of the assessing authority with respect to the interest. The assessee preferred an appeal of the Tribunal, which was also rejected by order dt. 15th Feb., 1990. The assessee moved an application under S. 256(1) for referring questions of law enumerated in the preceding para. The said application was rejected by the order of the Tribunal, dt. 28th Feb., 1991.
(3.) IT is contended by Mr. Rajendra Mehta, learned counsel for the petitioner assessee, that the issue of spreading over of the interest over year of actual payment to year of actual receipt instead of being charged as accumulated sum in the year in which the interest has been received, is a question of law and not a question of fact. In this context the learned counsel has placed reliance on a decision of the apex Court in Rama Bai vs. CIT (1990) 84 CTR (SC) 164 : (1990) 181 ITR 400 (SC) : TC 39R.668, wherein the Court dealing with the case of compensation for land acquisition held that interest of enhanced amount of compensation awarded by the Court on a reference under s. 18 of the Land Acquisition Act, on further appeal has to be taken to have accrued not on the date of the order of the Court granting enhanced compensation but having accrued year after year from the date of the delivery of possession of the land till the date of such order and such interest cannot be assessed to income tax in one lump sum in the year in which the order is made.;