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2017 (6) TMI 446 - AT - Income TaxTaxability of Interest earned on funds - belong to the assessee or not - amount / funds contributed by subsidiaries towards the shifting and rehabilitation fund - Held that:- The addition has been framed without understanding the purpose of creation of fund/legal ownership of money lying with the fund etc. It was specifically stated that in respect of ‘shifting and rehabilitation funds’, contribution by subsidiaries along with interest earned on such funds does not belong to the assessee. The assessee company is merely the custodian of such fund. It was also stated that in the earlier years, the Ld. AO had treated the contribution received from subsidiary as income from the assessee and the same was deleted by the Ld. CIT(A) for A.Y. 2007-08. It was also argued that it is well settled law that to treat any amount as an income, one should have the legal right to receive the same and also one will have all the authority to expend the money as per her/his wishes. In the instant case, the money (contribution and interest thereon) received by the company will be used as per the directions of the concerned Ministries and the Company had no control to use the money. The Company is merely acting as a custodian of such money and is required to release the same as per the directions of the concerned Ministries. However, the assets generated from such money cannot be treated as assets of the assessee company. Pending utilisation of the funds, the money was kept in the bank account which has resulted into interest income. - Decided in favour of the assessee
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