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2021 (9) TMI 757 - AT - Income TaxInterest Income from short term investments - Interest earned on unutilized funds - inextricably linked for the purposes of developing highway as taxable income kept in accordance with NHAI mandate with no liberty to utilize at free discretion and which was reduced from cost of project - contract has been received from NHAI and available funds were to be kept in Escrow Account - HELD THAT:- There are so many stipulations contained and it is clear that there is strategic investment policy in existence and the assessee has received the income from strategic investments - Income received from the investments made from Escrow Account and deposited it into general proceedings account, is taxable under the head "Income From Other Sources". Further, going through the conditions of Escrow account any value addition is made either in the form of Interest credited or profit on sale of Investments from permitted investments are to be deposited in the General Proceedings Account as per clause 8.2 (c)(iii) r.w.s. clause 8.5. Both the parties have not brought to our notice about the use of amount deposited in General Proceedings Account. If the said account is to be treated with parity to the Escrow account, then, the assessee is liable to tax on income received in the year in which the assessee is eligible to utilize the disputed amount. In view of the above observations, we remit the issue back to the file of the AO with a direction to examine the issue as per pages 8 to 14 of the paper book filed by the assessee before us. Thus, the ground raised by the assessee on this issue is treated as allowed for statistical purposes. Disallowance of interest on late payments of TDS - grievance of the revenue authorities is that the appellant has deducted TDS but not remitted to the Government Account within the stipulated time for which the appellant had to pay penal interest which has been claimed by the appellant as business expenditure - HELD THAT:- As assessee has not remitted the TDS amounts within stipulated time and paid interest on TDS, which is not allowable expenditure u/s. 37(1) of the Income Tax Act, 1961. At Sl. No. 5 i.e. the income tax paid by the assessee of an amount is also not allowable as per section 37(1) of the Act. Therefore, following the said decision of M/S. GOVINDAM CLEARING AGENCIES PVT. LTD. [2020 (9) TMI 577 - ITAT JAIPUR] we uphold the order of the CIT(A) in confirming the disallowance made by the AO on account of interest paid by the assessee on TDS/Income-tax. Thus, this ground of appeal of the assessee is dismissed. Restricting the TDS credit - HELD THAT:- We do not find any error in restricting the TDS credit to ₹ 2,96,061/- as the assessee has not offered the corresponding receipts as income in the impugned AYs. The AO is directed to give credit in the year in which the corresponding receipts have been offered as income by the assessee and give credit after due verification as per law. The assessee is also directed to produce the necessary documentary evidence for proof of payment of TDS by the deductor in the name of the assessee. Therefore, we uphold the order of the CIT(A) on this issue and dismiss the ground raised by the assessee.
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