IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM MONDAY, THE 29TH JUNE 2009 / 8TH ASHADHA 1931 ITA.No. 172 of 2009(T) ---------------------- ITA.378/1999 of I.T.A.TRIBUNAL,COCHIN BENCH .................... APPELLANT/RESPONDENTS: ----------------------------- THE COMMISSIONER OF INCOME TAX, TRICHUR. BY ADV. SRI.JOSE JOSEPH, SC, FOR INCOME TAX RESPONDENT/APPELLANT: ------------------------------- M/S.CATHOLIC SYRIAN BANK LTD., TRICHUR. THIS INCOME TAX APPEAL HAVING COME UP FOR ADMISSION ON 29/06/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.N.RAMACHANDRAN NAIR & C.K.ABDUL REHIM, JJ. ----------------------------------- I.T.A. No. 172 of 2009 -------------------------------------- Dated this the 29th day of June, 2009 J U D G M E N T ---------------------- Ramachandran Nair,J. The question raised is whether the Tribunal was justified in cancelling the assessment of income being the difference between the cost of acquisition and face value of Government securities. Assessee was returning income for earlier years and the same was accepted by department. However later Reserve Bank issued circular addressing banks not to remit tax on the difference between the face value and cost of acquisition of the Government Securities. The issue raised is for the year prior to th date of the circular came into force. The Tribunal however accepted the assessee's contentions and allowed the claim. We do not find anything with the Tribunal's findings because Reserve Banks circular is obviously accepted by the department for subsequent years and circular is nothing but an advice to bank not to pay tax on notional income. The fact that the assessee without contest paid tax for earlier years does not mean ITA.172/09 2 that they forfeit their right to contest liability for any subsequent year. We therefore dismiss the appeal filed by the department. C.N.RAMACHANDRAN NAIR, JUDGE. C.K.ABDUL REHIM, JUDGE. okb