Law:

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Section 28(i) of the Income-tax Act, 1961 - Business loss/deductions - Allowable as - Assessment years 1990-91 to 1992-93 - Assessee-bank purchased Government securities after certain time of date of their issue and as by that time, certain amount of interest had already accrued thereon payable by Government to bank, purchase price comprised of issue price and accrued interest uptill date of purchase (known as broken period interest) - Whether amount of broken period interest paid by assessee bank could be claimed as allowable deduction from its income - Held, no CASE REVIEW Vijaya Bank Ltd. v. CIT [1991] 94 CTR (SC) 206 followed. American Express International Banking Corporation v. CIT [2002] 177 CTR (Bom.) 442/ 258 ITR 601 (Bom.)dissented from CASES REFERRED TO Vijaya Bank Ltd. v. Addl. CIT [1991] 187 ITR 541/ 57 Taxman 152 (SC) [Para 2], American Express International Banking Corpn. v. CIT [2002] 258 ITR 601/ 125 Taxman 488 (Bom.) [Para 5] and IRC v. Pilcher[1949] 31 Tax Cases 314 [Para 6]. K.K. Bissa for the Appellant. Ramit Mehta, Avinash Acharya and L.R. Mehta for the Respondent. ORDER N.P. Gupta, J. - These four appeals involve common questions of law, and are between the same parties, and are, therefore, being decided by common order. Though these are two sets of appeals, one being Appeal No. 12/2005, which has been filed against the order of the learned Tribunal, dated 15-7-2004, while the other three appeals are against the common judgment of the Tribunal, dated 29-5-2003, but then the judgment dated 15-7-2004 simply follows the judgment dated 29-5-2003. Thus, these appeals involve common questions of law. Appeal No. 12 was admitted vide order dated 24-3-2005, by framing the following substantial question of law : "Whether in the facts and circumstances of the case, the difference in interest amount accounted for by the assessee on accrual basis in his books of account, and the amount actually offered for taxation in computation of income submitted by the assessee should be the subject-matter of adjustment under section 143(1)(a) for raising a demand of tax and additional tax on that basis? While the other three appeals have been admitted vide order…

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