IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE P.S.GOPINATHAN TUESDAY, THE 2ND FEBRUARY 2010 / 13TH MAGHA 1931 ITA.No. 19 of 2010() -------------------- ITA.119/COCH/2009 of I.T.A.TRIBUNAL,COCHIN BENCH .................... APPELLANT/RESPONDENT: ----------------------------------------- THE COMMISSIONER OF INCOME TAX, COCHIN. BY ADV. SRI.JOSE JOSEPH, SC, FOR INCOME TAX RESPONDENT: --------------- M/S.SURYA CONSTRUCTIONS, LAYAM ROAD, KOCHI-11. THIS INCOME TAX APPEAL HAVING COME UP FOR ADMISSION ON 02/02/2010,THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.N.RAMACHANDRAN NAIR & P.S.GOPINATHAN, JJ. .................................................................... I.T. Appeal No.19 of 2010 .................................................................... Dated this the 2nd day of February, 2010. JUDGMENT Ramachandran Nair, J. The only question raised is whether the Tribunal was justified in cancelling order of the C.I.T. issued under Section 263 of the Income Tax Act directing revision of assessment for disallowing part of the interest claim. We notice that the justification for Commissioner's order is that the assessee has not claimed interest in the preceding years on accrual basis but made claim on settlement with the creditor. On going through the orders we find that the assessee has gone into bad days and there was dispute between the lender firm and the assessee which led to settlement. Interest claim is based on payment made under settlement. Even though there is some force in the contention of the Revenue that interest paid during the previous year is not attributable to that year's liability, assessee would have been able to claim carry forward benefit had the claim been made in earlier years. 2 Therefore, in substance, department can have no grievance. Consequently we dismiss the appeal. C.N.RAMACHANDRAN NAIR Judge P.S.GOPINATHAN Judge pms