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2016 (6) TMI 944 - CALCUTTA HIGH COURT

2016 (6) TMI 944 - CALCUTTA HIGH COURT - [2016] 385 ITR 672 - Rectification of mistake - addition of interest - Held that:- As mistake on page 3 of the order of the Tribunal as pointed out by the Ld. Sr. Counsel with regard to ground No.XII that the amount of interest has been mentioned as ₹ 36,09,016/- instead of the correct amount of ₹ 36,09,31,016/-. The Ld. D.R. to this contention had nothing to say in rebuttal. Accordingly, the said rectification is hereby allowed. As a result o .....

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ha Arora, JJ. For the Appellant : Mr. M. P. Agarwal, Mr. F. Gaffer, Advocates For the Respondent : Mr. J. P. Khaitan, Sr. Advocate, Mr. Ananda Sen, Advocate ORDER The Court : The appeal is directed against a judgment and order dated 21st September, 2007 passed by the Income Tax Appellate Tribunal E Bench, Kolkata in M.A. No. 38/Kol/2007 arising out of ITA No.395/Kol/2006 pertaining to the assessment year 2002-03, by which the order dated 25th August, 2006 passed in ITA No.395/Kol/2006 was varied .....

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and caprices. With this considered view, we are unable to accept the contention of Dr.Pal and reject the same. The aforesaid order was subsequently substituted in a miscellaneous application by an order dated 21st September, 2007 which is as follows:- On hearing the rival submissions on the issue, in the peculiar set of facts and circumstances of the case, we had to agree that the petitioner-applicant had no option for the rate of interest decided by the State Government. Accordingly, Dr.Pal s c .....

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factual mistake. In passing the impugned order the Ld. Tribunal exceeded its jurisdiction under Section 254(2) of the Income Tax Act, 1961 ? The Assessing Officer, in his judgment and order passed under section 143(3) of the I.T. Act, dated March 30, 2005, had made addition of ₹ 216.08 crores, for the following reasons: (i) Interest income on loans & advances to Govt. of West Bengal and Interest on deposit with Pay and Accounts Office, Kolkata. It was noted as per notes on Accounts fil .....

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tile system of accounting is being followed, why the amount involved of ₹ 216.08 crore will not be added to total income. In response, it was submitted that income from investments on loans and advances amounting to ₹ 4,478 lakhs has not been considered as the same has not been received subsequently in April, 2002 and that the fundamental accounting assumption of consistency and accrual had been followed in the preparation and presentation of financial statements. As regards interest .....

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al basis. The submissions were carefully considered but are not accepted. Assessee follows mercantile system of accounting. Accordingly, on accrual basis, it should have offered the income for taxation. The CAG in their comments have also mentioned Non-recognition of interest income on accrual basis has resulted in understatement of profit by ₹ 216.08 crores. Accordingly, to arrive at true picture of profit, the amount of ₹ 216.08 crore is added back to total income. In an appeal, th .....

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etter dated 08-08-2001 and 27-03-2002. (III) The year of taxability of the aforesaid amount. 1.3 As it is evident from the order of the assessing officer he has held that interest on amount of term loan for the month of March, 2002 amounting to ₹ 51.75 crores and interest receivable amounting to ₹ 164.33 cores on deposits lying with the Pay & Accounts office in the previous year relevant to the Assessment Year 2002-03 should have been offered for tax on accrual basis. The learned .....

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