COMMISSIONER OF INCOME TAX Vs. INDIAN OVERSEAS BANK

JUDGEMENT

(1.) WE are very surprised at the conduct of the Revenue in seeking a reference, in a matter which admits of no doubt at all.

(2.) THE assessment of the assessee, a public sector bank, for the assessment year 1970-71 was completed on February 28, 1973, and it was revised twice on December 31, 1973, and October 10, 1977. THE matter was once again sought to be reopened on the allegation that the assessee had to furnish relevant particulars with regard to the interest on securities, which according to the Revenue audit was taxable on accrual basis and not on the basis of realisation, and that the provisions for foreign exchange entitlement certificate should not have been treated as a liability and it should have been treated as provisional liability. THE assessee-bank having appealed to the Commissioner against the order, the order of reassessment was set aside by the Commissioner who recorded a finding that the income offered from the interest on securities for income-tax purposes by the bank, was the correct one and was in accordance with law, and further that the provisions for foreign exchange entitlement certificate was in accordance with the computation made, which had been brought to the notice of the Income-tax Officer in a special note.