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2015 (12) TMI 692 - ITAT KOLKATA

2015 (12) TMI 692 - ITAT KOLKATA - TMI - Addition on account of accrued interest receivable by assessee on unpaid compensation - CIT(A) deleted the addition - Held that:- In the instant case, the interest income is not from a definite source as it is subject to litigation. The assessee received a sum of ₹ 15.00 crores as part payment out of the total compensation and the balance was still to be received subject to the decision of the Apex Court. So it is quite clear that the interest incom .....

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peal No.200/CCXXVIII/ CIT(A)C-I/11-12 dated 08.11.2012. Assessment was framed by DCIT, C.C.XXVIII, Kolkata u/s 143(3) of the Income Tax Act, 1961 (hereinafter referred to as 'the Act') vide his order dated 29.12.2011 for assessment year 2009-10. 2. Only ground raised by Revenue in this appeal is that Ld. CIT(A) has erred in deleting the addition of ₹ 3,64,64,577/- on account of accrued interest receivable by assessee on unpaid compensation. 3. The Facts of the case are that the ass .....

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t of the total compensation amount as stated above assessee received a sum of ₹ 6.00 & ₹ 15.00 crores on dated 19/08/2003 22/7/2005 respectively. The Assessing Officer calls upon the assessee to explain as to why the interest on such compensation should not to be treated as income for the year under consideration. Assessee submitted that the question of accrual interest on the amount of compensation is still inchoate stage as the order of Hon'ble Guwahti High Court on dated 2 .....

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t payable under the Act. The appellants have already deposited ₹ 6 crore which have been withdrawn by the respondents. Operation of the impugned order is stayed subject to the deposit of another sum of Rs. Crore by the appellants within 6 weeks, failing which the stay shall be stand vacated automatically. Respondents would be at liberty to withdraw the amount on furnishing security to the satisfaction of the Registrar General of the hg of Gauhati at Gawahati." From the above the AO is .....

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and vacated and automatically and he worked out the interest @ 12% of ₹ 30,38,71,474/- which comes to ₹ 3,64,64,577/- and added the same to the income of assessee. The AO also enquired from the assessee about the present status of the Apex Court order passed on dated 21.4.2005, but the assessee failed update the then present status of the order of the Apex Court. Aggrieved, assessee preferred appeal before Ld. CIT(A), who deleted the addition made by AO relying on the order of this I .....

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as far as order of the Hon'ble Gauhati High Court is concerned, the said order was considered in respect of payment of ₹ 6,00,00,000/- received by the assessee and the interest element, which was directed to be paid by the Hon'ble High Court from 30.11.1996 on the compensation amount, had already been stayed by the Hon'ble Supreme Court and accordingly the said order could not be said that the interest had accrued to the assessee. The appellant has therefore submitted that the .....

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nsistently held that the compensation does not become taxable till the matter has reached its finality and the receipt of compensation has become final. The Hon'ble ITAT in the case of Sharda Pareek has also taken the same view in a similar case as that of the appellant. Above all, the case of the appellant is directly covered by the decision of the jurisdictional ITAT in its own case for the assessment year 2004-05. The case of the appellant is also covered by the order of the Ld. CIT(A) C- .....

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off. Accordingly the addition of ₹ 3,64,64,577/- on account of accrued interest made by the AO is deleted. In view of the above, and, respectfully following the decision of my learned predecessor and the Hon'ble jurisdictional ITAT, it is to be held that the addition of ₹ 3,64,64,577/- on account of interest as made by the AO is not sustainable in law; and so, the same is directed to be deleted. Ground no. 2 is allowed." Aggrieved, Revenue preferred appeal before us of the f .....

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e on record. Ld. DR relied on the order of AO and submitted that subject matter of the dispute has reached to its finality by the order of Apex Court on dated 29.11.2012 and the relevant portion of the order is reproduced below :- ORDER On November 22, 2012, the following consensus emerged between the learned senior counsel for the parties: i) The appellants shall pay a sum of ₹ 34 crores to respondent No.2 - Bharat Hydro Power Corporation Limited in full and final settlement of their clai .....

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parties, we find that AO has added the interest income in the total income of the assessee for the AY 2009-10 which was subject matter of litigation for the relevant year under consideration. Fundamentally Income tax Act provides that any receipt will be treated as income liable to tax only when this is unconditionally, unequivocally, without doubt and without any sort of ambiguity, uncertainty is received by the assessee. Here in the instant case, the interest income is not from a definite sou .....

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