JUDGMENT
P.A. MOHAMMED, J.:
This is a petition filed under s. 256(2) of the IT Act at the instance of the CIT, Cochin. The respondent Mls South India Corpn. Ltd., is the assessee. The questions of law sought to be referred in this petition are the following..
“(1) Whether, on the facts and in the circumstances of the case and also in view of the fact that the appeal has been disposed of by the Supreme Court (vide the last portion of the judgment of the Supreme Court extracted in the order of the Tribunal) cannot the amount received during the account year relevant to asst. yr. 1990~91 be brought to tax under s. 41(1) of the IT Act, 1961?
(2) Whether, on the facts and in the circumstances of the case, the Tribunal is right in law and fact in holding that it cannot be said that, in the facts and circumstances of the case, the assessee has received any benefit in the impugned assessment year in respect of the loss or expenditure by it in the earlier years?”
2. The assessment year involved in this petition is 1990-91. The assessee had contract with the Food Corporation of India (FCI) during the years 1970 to 1978 for loading and unloading at Cochin Port. There was a dispute between the assessee- company and the FCI in respect of deductions made in wagon charges, crane charges etc. Ultimately the said dispute was referred to arbitration. As per the award made on 5th June, 1986, the assessee was granted a claim to the extent of Rs. 30,73,418 with interest at 9 per cent from the date of claim. The award was not accepted by the FCI and they challenged it before the Madras High Court. A learned single judge of the High Court of Madras by the order dt. 24th May, 1988 allowed the claim of the assessee with interests. The FCI filed appeal before the Division Bench of the Madras High Court and the said appeal is pending. Based on the judgment of the Single Judge the assessee asked the FCI to pay the money as per the orders of the Court. The FCI contested the claim before the Supreme Court in Civil Appeal No. 2831 of 1989 against the order of the Division Bench of High Court of Madras. The assessee received a sum of Rs. 36,88,974 during the accounting year relevant to the asst. yr. 1990-91. Pursuant to the order of the Court the assessee contended before the officer that the amount received as per the orders of the Court is not taxable under s. 41(1) of the IT Act. However, the officer did not accept it for the reason that what is obtained during the accounting year under arbitration award is an amount obtained in cash. In appeal the CIT(A) deleted the addition in view of the decision of the Gujarat High Court in CIT vs. Rashn2i 7Yading (1976) 103 ITR 312 (Gul).
As against the said order, the Revenue as well as the assessee filed further appeal before the Tribunal. Before the Tribunal, the assessee contended that the Supreme Court has not given a final verdict on merits and in the case of an adverse decision, the assessee would be compelled to refund the amount received. Ultimately, the Tribunal held that, since the assessee did not receive the amount on final adjudication of the dispute, the same should not be assessed to tax during the assessment year. As against the order of the Tribunal, an application for reference was filed by the assessee under s. 256(1) of the IT Act. That petition was rejected by the Tribunal on l lth Aug., 1995.
3. Heard learned senior standing counsel for the Revenue and the counsel for the assessee.
4. The contention advanced by the Revenue depends upon the interpretation of an order passed by the Supreme Court in Civil Appeal No. 2831 of 1989 which has been referred to in Annexure-C. The order passed by the Supreme Court has been extracted in page 75 of the paperbook. The question is whether the said order is an interim order or final order passed by the Supreme Court in the above referred civil appeal. In view of the last sentence in the order mentioned above, standing counsel for Revenue submitted that it can only be interpreted as a final order and, therefore, whatever amount received by the assessee pursuant to the said order is liable to be taxed.
5. After going through the abovesaid order we have some doubt as to whether it is an order passed on the final disposal of the appeal or an interim order. The counsel for the assessee at this juncture made available the copy of the order received from the Supreme Court in Civil Appeal No. 2831 of 1989. The cause title of the said order reads as follows:
“Appeal by special leave granted by this Court’s Order dated the 9th May, 1989, the petition for Special Leave to Appeal (Civil) No. 8830 of 1989 from the order dated the 8th March, 1989, of the High Court of Judicature at Madras in Civil Miscellaneous Petitions Nos. 1669 and 2923 of 1989 in OSA No. 197 of 198811.
The above portion of the order is significantly ab-sent in the order extracted in the paperbook at page No. 75. From the above cause title, it is clear that the order passed by the Supreme Court in Civil Appeal No. 2831 of 1989 is against the order of High Court of Madras in Civil Miscellaneous Petitions Nos. 1669 and 2923 of 1989 in OSA No. 1971 of 1988. Therefore, it is (sic-not) an order in final disposal of the above civil appeal. Thus, it is distinctly clear that the matter is even now pending before the Division Bench of the Madras High Court.
That means what is received by the assessee is an interim payment subject to the final adjudication by the High Court of Madras. That being the position, the questions of law sought to be referred by this Court do not arise for consideration now. Only when the matter has become final by the judgment to be pronounced by the Division Bench of the Madras High Court, the amount received by the assessee can be considered for the purpose of assessment. No referable questions are involved in this petition. It is accordingly dismissed.
OPEN