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2019 (8) TMI 561 - AT - Income TaxAssessment u/s 153A - Addition of interest income - HELD THAT:- Assessing officer is not without recourse to bring this interest income to tax. The reason for the same is that there is no dispute that the assessee has earned this interest income and there is also no dispute that the same has not been offered to tax by the assessee for the impugned assessment year. Therefore, in a scenario, where during the course of reassessment proceedings u/s 153A, the Assessing officer is ceased of the material and information that the income has escaped taxation, such material and information can form the basis for initiating the reassessment proceedings u/s 147 the same time, the contentions which has been raised by the ld AR, that the assessee has reported the interest income at the time of maturity of the fixed deposits and on receipt of income tax refund in subsequent assessment year and therefore, the action of the AO has resulted in double taxation which cannot be sustained in the eyes of the law, has to be considered and examined objectively as the law permits the assessee to report interest income under the head ‘Income from other sources” either on the cash or mercantile basis which is regularly employed by the assessee. Where the assessee contends that it has offered the interest income on maturity of fixed deposits and on receipt of income tax refund, basically, the assessee has followed the cash basis of accounting which is permissible under law. In the scenario, where it is found on examination that the interest income has not been reported to tax as so claimed by the assessee even in the subsequent assessment year, the Assessing officer will be at liberty to take action as per law to bring such interest income to tax. Under the present proceedings which has been initiated u/s 153A, given that the original proceedings were not abated as on the date of search and in absence of any incriminating material found during the course of search, no addition can be made in the hands of the assessee and the same is hereby directed to be deleted. - Decided in favour of assessee.
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