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2020 (2) TMI 1146 - HC - Income TaxAccrual of income - Interest accrual as liable to tax - exemption u/s 10 (23BBA) - Instead of saying that the interest income has been utilized by the Assessee on its own free will, the Assessing Officer has inverted the law and has held that merely because the Assessee has never refunded any amount of interest to the Government it means it is its income - HELD THAT:- The argument that there is no such stipulation in the letter releasing the grant does not lead to the automatic conclusion that the interest is income of the Assessee. It is not the case of the appellant that the books of the Assessee ever revealed the diversion of any interest income. Had that been so something could have been said. The other argument raised by the counsel for the appellant is that the Tribunal wrongly invoked Section 10 (23BBA) of the Act and the invocation of that Section completely blind-sided the Tribunal into taking a wrong decision. Assessee never claimed any exemption u/s 10 (23BBA) and in the circumstances, the only thing which can be held is that reference to Section 10 (23BBA) by the Tribunal was surplusage and was not required in view of the basic finding of fact that the income which accrued to the Assessee from the funds of the Government which were released to it were not diverted by it and could not be diverted by to any other purpose and had to be used only for the purposes which the Government directed and in case the funds were not used the Government had the right to recall them.
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