COMMISSIONER OF INCOME TAX Vs. MERCANTILE BANK LIMITED

JUDGEMENT

(1.) BY this reference under s. 256(1) of the IT Act, 1961, made at the instance of the Revenue, the Tribunal has referred the following question of law for the opinion of this Court : 'Whether, on the facts and in the circumstances of the case, the assessee is not liable to be taxed in respect of the amount credited to the 'Interest Suspense Account' representing interest recoverable on 'sticky loans and advances' and which is not taken to the profits and loss of the relevant account year ?'

(2.) LEARNED counsel for the Revenue submitted before us that the controversy in the above question is squarely covered by the decision of the Supreme Court in the case of State Bank of Travancore vs . CIT : [1986]158ITR102(SC) . Learned counsel for the assessee, however, submits that the decision of the Supreme Court in the above case does not apply, this controversy is covered by the decision of this Court in CIT vs . Citibank N.A. : [1994]208ITR930(Bom) .

(3.) IN view of the above, the question referred to us is answered in the negative and in favour of the Revenue. The assessee to pay cost of Rs. 1,000 to the Revenue.