Raunaq International vs Commissioner Of Income-Tax
1998 Latest Caselaw 29 Del

Citation : 1998 Latest Caselaw 29 Del
Judgement Date : 9 January, 1998

Delhi High Court

Raunaq International vs Commissioner Of Income-Tax on 9 January, 1998

Equivalent citations: 1998 231 ITR 106 Delhi

Author: R Lahoti

Bench: R Lahoti, D Bhandari

JUDGMENT

R.C. Lahoti, J.

1. This is a reference under Section 256(1) of the Income-tax Act, 1961, arising out of the assessment year 1974-75 and made at the instance of the assessee seeking the opinion of the High Court on the following question of law :

"Whether, on the facts and in the circumstances of the case, the premium of Rs. 4,75,322 earned on transfer of import entitlements is income liable to tax ?"

2. The plea raised on behalf of the assessee was that the transfer of import entitlements amounted to a transfer of source of income and, therefore, should not be treated as revenue receipt. This plea did not find favour with the Tribunal and the premium earned by the assessee has been held liable to tax.

3. However, as pointed out by learned senior standing counsel for the Department, this reference has been rendered academic merely in view of the change in law made effective retrospectively. The Finance Act, 1990, has introduced Clause (iiia) in Section 28 of the Income-tax Act, 1961, according to which proceeds of sale of licence granted under the Imports (Control) Order, 1955, made under the Imports and Exports (Control) Act, 1947, is income chargeable under the head "Profits and gains of business or profession". An amendment has also been effected in the definition of income in Clause (24) of Section 2 of the interpretation clause of the Act whereby any sum chargeable under Clause (iiia) of Section 28 is included in the definition of "income". These amendments, though inserted by the Finance Act of 1990, have been given a retrospective effect from April 1, 1962. The assessment year 1974-75 is clearly covered by the amendment. Thus whatever might have been the controversy earlier, the same does' not survive for decision in view of the amendments referred to hereinabove, according to which the premium earned by the assessee is liable to be taxed as "income" under the head "Profits and gains of business or profession".

4. For the foregoing reasons, the reference is held to have been rendered academic merely and hence is returned unanswered.