COMMNR. OF INCOME TAX, AHMEDABAD vs SARABHAI HOLDINGS PVT. LTD.

The Supreme Court addressed two Income Tax References concerning the assessment years 1979-80 and 1980-81 under the Income Tax Act, 1961. The Court held that the Tribunal was correct in determining that interest of Rs. 66,29,236 was liable to tax on an accrual basis for the assessment year 1979-80, while also affirming that no income accrued to the assessee for the assessment year 1980-81 until after the accounting year. Additionally, the Court upheld the Tribunal's decision regarding the penalty levied under Section 273(2)(a) of the Act, confirming the penalty of Rs. 4 lakhs.