Telangana High Court Andhra Bank Financial Services Ltd vs The Commissioner Of Income Taxi, ... on 9 June, 2023 THE HON'BLE THE CHIEF JUSTICE UJJAL BHUYAN AND THE HON'BLE SRI JUSTICE C.V.BHASKAR REDDY I.T.T.A.Nos.424, 425 and 445 of 2005, 320 of 2006 and 114 of 2012 COMMON JUDGMENT: (Per the Hon'ble the Chief Justice Ujjal Bhuyan) This common order will dispose of I.T.T.A.Nos.424, 425 and 445 of 2005, 320 of 2006 and 114 of 2012. 2. We have heard Mr. C.P.Ramaswami, learned counsel for the appellant (also referred to as 'the assessee') and Mr. B.Narasimha Sarma, learned Standing Counsel, Income Tax Department representing the respondents (also referred to as 'the Revenue'). 3. Issue raised in all the appeals is one and the same and therefore, all the appeals were heard together and are being disposed of by this common judgment and order. However, Mr. C.P.Ramaswami had argued I.T.T.A.No.425 of 2005 as the lead appeal. Therefore, reference to facts and orders would be in relation to I.T.T.A.No.425 of 2005. 2 4. Before we deal with the said appeal, we may mention that I.T.T.A.No.424 of 2005 arises out of the order dated 06.06.2005 passed by the Income Tax Appellate Tribunal, Hyderabad BenchA, Hyderabad (briefly, 'the Tribunal' hereinafter) in I.T.A.No.126/Hyd/2000 for the assessment year 199697. Likewise, I.T.T.A.No.425 of 2005 arises out of order dated 06.06.2005 passed by the Tribunal in I.T.A.No.115/Hyd/1999 for the assessment year 199495; I.T.T.A.No.445 of 2005 arises out of the order of the Tribunal dated 06.06.2005 in I.T.A.No.116/Hyd/1999 for the assessment year 199596; I.T.T.A.No.320 of 2006 arises out of the order dated 14.03.2006 passed by the Tribunal in I.T.A.No.562/Hyd/2001 for the assessment year 199394; and finally I.T.T.A.No.114 of 2012 arises out of the order of the Tribunal dated 14.03.2006 passed by the Tribunal in I.T.A.No.318/Hyd/2003 for the assessment year 199596. 5. These appeals have been filed by the assessee as appellant under Section 260A of the Income Tax Act, 1961 (briefly, 'the Act' hereinafter) against the aforesaid orders of 3 the Tribunal and have been admitted on the following substantial questions of law: (1) Whether on the facts and in the circumstances of the case, Tribunal was justified in holding that the appellant was the owner of the bonds in question despite the notification dated 02.07.1992 issued by the Custodian in terms of Section 3 of the Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992? And (2) Whether on the facts and in the circumstances of the case, Tribunal was justified in holding that the assessing officer as well as the Commissioner of Income Tax (Appeals) was competent to decide the ownership of the bonds in assessment proceedings in spite of the provisions of subsection (4) of Section 3 of the Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992? 6. Appellant before us is an assessee under the Act having the status of a company. Assessment year under consideration is 199495. Assessee is engaged in the business of providing financial services. 7. For the aforesaid assessment year, the assessee filed return of income on 29.11.1994 declaring Nil income after settingoff the losses of earlier years. This was followed by 4 filing of a revised return by the assessee on 22.08.1995 again declaring Nil income after settingoff the losses. Thereafter revised return was processed under Section 143 of the Act. Assessing officer noted that one entity called 'Fair Growth Financial Services Limited' (referred to hereinafter as 'Fair Growth') had delivered five bonds to the assessee in discharge of twelve contracts much before the notified date. However, assessee had not accounted for the accrued interest on the said bonds on the ground that till such time the petitions filed by the assessee before the Special Court constituted under the Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992 (briefly, 'the Special Court Act' hereinafter) were decided declaring the ownership of the bonds, assessee could not deal with the bonds including getting its name registered as the owner. According to the assessing officer, assessee had purchased these bonds before the notified date though those were under the custody of the Special Court along with various other bonds. Therefore, assessing officer took the view that the interest accrued on those bonds had to be accounted for by the asses