ANIL KEDIA Vs. SETTLEMENT CIT

JUDGEMENT

(1.) THE writ petition is directed against the order of the first respondent, Settlement Commission of Income-tax and Wealth-tax, dated October 25, 2002 in so far as it relates to the portion of the order rejecting the claim of the petitioner for payment of interest on the shares retained beyond the period of six months from the date of order under section 132(5) of the Income-tax Act and for direction against the first respondent to allow the claim of the petitioner for such interest.

(2.) THE petitioner is a member of the Madras Stock Exchange, carrying on the business as a share broker in the trade name, "Viswanath Anil Kedia" in his individual capacity. As a stock broker, he buys and sells shares in the stock exchange on behalf of his clients apart from selling and purchasing in his own name. While carrying on the purchase and sale of shares in his name, he is known as "jobber" who buys shares for lower price and sells at higher price and makes his profit. The shares held by him accordingly form part of the working capital of his business without retaining liquid cash. According to him, in the nature of business of a stock broker, such shares are equivalent to cash since the amounts are realized within 10 days of sale.

(3.) ON the other hand, Mr. T. Narayanasamy, learned counsel for the respondents would submit that under the taxation law, one has to construe the terms of the provisions of the Act strictly as per the terms and there is no scope for going beyond the words of the statute. According to the learned counsel, when section 132B(4) of the Income-tax Act makes it abundantly clear that the amount of interest payable by the Central Government is only in respect of the amount of money retained under section 132 of the Income-tax Act, there is no scope for extending the meaning of the term "money" to the shares seized and retained by the Income-tax Department when the search was made.