Full Judgment Text
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PETITIONER:
COMMISSIONER OF INCOME TAX, BOMBAY
Vs.
RESPONDENT:
M/S KANJI SHIVJI & CO.
DATE OF JUDGMENT: 25/01/2000
BENCH:
S.P.Bharucha, A.P.Misra, N.Santosh Hegde
JUDGMENT:
Order
This appeal stands referred to a Bench of three Judges
because it was found that a Bench of two learned Judges had
taken the view that the conclusion of an earlier Bench of
three learned Judges was difficult to accept. The issue
relates to whether Explanation (2) to Section 40(b) of the
Income Tax Act, 1961, introduced with effect from 1st April,
1985, is prospective in operation or only declaratory.
In Brij Mohan Das Laxman Das vs. Commissioner of
Income Tax (223 I.T.R./825) two learned judges concluded
that the said Explanation was declaratory. This view was
accepted by a Bench of three learned judges in Suwalal
Anandilal Jain vs. Commissioner of Income Tax (224 I.T.R.
753).
In the case of Rashik Lal & Co. vs. Commissioner of
Income Tax (229 I.T.R.458) this view was doubted. A Bench
of two learned Judges observed that it was difficult to
accept the proposition that the said Explanation was only
clarificatory for the reason that if what was contained in
the said Explanation was already the law in force, then
giving effect to the said Explanation from 1st April, 1985
did not make any sense. But the Bench immediately noted,
"Hkowever, in the case before us, no question of payment of
any interest in involved". In other words, the application
of Section 40(b) and the said Explanation was not really in
issue in Rashik Lal’s case relative to the said Explanation
must, therefore, betreated as obiter dicta.
The conclusion of the court in the earlier cases of
Brij Mohan Das Laxman Das and Suwalal Anandilal jain still
represents the correct exposition of the law. Fkollowing
these decisions, the civil appeal must be dismissed./
We are abliged to Mr. B.Sen, learned counsel, for his
assistance at our request.
Appeal dismissed.
No order as to costs.