RAMAKRISHNA CINE STUDIO Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE assesses is Ramakrishna Cine Studios. THE relevant assessment years are 1980-81 and 1981-82. THE Income-tax Officer treated the film subsidy of Rs. 2 lakhs received by the assessee as revenue receipt in these two years. On appeal, the Commissioner of Income-tax (Appeals) upheld the same. THE Tribunal relying on its own order in the assessee's own case for the assessment year 1979-80 held that the film subsidy received is revenue receipt. THE assessee also contended that levy of interest under Section 217 of the Income-tax Act is not justified, while the Revenue contended that in the assessment year 1980-81, the Inspecting Assistant Commissioner has waived the interest levied under Section 217 and in the assessment year 1981-82 the interest levied under Section 217 of the Act is reduced to Rs. 15,000. Since, the assessee has moved for waiver of interest it is not a case where the very levy of interest under Section 217 is challenged. He also relied on the judgment of the Supreme Court in Central Provinces Manganese Ore Co, Ltd. v. CIT where it was held that no appeal lies against levy of interest under Section 217. THE Income-tax Appellate Tribunal relying on the judgment of the Supreme Court referred to above held that no appeal lies as the assessee has moved for waiver of interest and, therefore, it is not a case of total denial of levy of interest under Section 217, consequently the appeal is not maintainable against the levy of interest under Section 217.

(2.) THE Tribunal also took into account the waiver of interest for the assessment year 1980-81 and the reduction of interest in the year 1981-82. On the basis of the above, the following two questions were referred at the instance of the assessee :

(3.) IT was further held (page 968) :