Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2015 (7) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (7) TMI 115 - AT - Income TaxAddition on account of interest income - revenue v/s capital receipt - diversion of interest at source - Held that:- The interest earned on FDR before commencement of project was to be treated as capital receipt to be adjusted preoperative expenses, since it had a direct link with setting up power project. The interest was not assessable as income from other sources. Section 4 and Section 56 of the Income Tax Act, 1961. We also find that similar decision was also relied upon by the assessee’s counsel in the case of Gujrat Corporation Ltd.[2012 (11) TMI 181 - Gujarat High Court] wherein it was held that “the assessee corporation was promoted by Government for augmenting power supply. The share capital was provided by Government. The interest on short term deposits from share capital was paid to Government as per agreement. The interest income was diverted at source. It was not assessable in its hands. So the income did not belong to the assessee, but that was of the Govt. of Gujrat, and therefore, it cannot be taxed in the hands of the assessee. we find considerable cogency in the submissions and the case laws relied upon by the Ld. Counsel of the assessee, therefore, we are of the view that the interest received on FDR’s of ₹ 5,91,850/- in the present case is not to be taxed as income from other sources in the hands of the assessee company, hence, we delete the addition made by the AO and confirmed by the Ld. CIT(A) - Decided in favour of assessee. Addition on account of sale consideration of the assessee treated as unexplained income under section 68 - Held that:- as per the Ld. CIT(A) it is the immediate requirement of cash that had made the assessee to bring in picture the entire paper transaction of sale and purchase of cloth, though in effect no such transaction took place. In view of the above, the genuineness of sales transaction as well as purchase transaction remaining unproved, we find considerable cogency in the finding of the Ld. CIT(A) wherein he has observed that the addition made by the AO uls 68 of IT Act is correct on account of unproved purchases and subsequent unproved sales thereby leading to unexplained cash credit u/s 68 of IT Act, 1961 at ₹ 49,28,006/-. Keeping in view of the aforesaid facts and circumstances of the case as explained above, in our considered opinion, the Ld. CIT(A) has passed a well reasoned on the issue in dispute - Decided against assessee.
|