9911796707
TMI Blog2006 (10) TMI 116X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment cannot be reopened where the assessee had not returned the income which was subjected to tax deducting at source?" The facts leading to the above substantial question of law are as under: The assessee is a company incorporated on October 1, 1990. The relevant assessment year is 1992-93 and the corresponding accounting year ended on March 31, 1992. The assessee has not commenced its business activities during the year. Hence no return of income was filed by the assessee. While perusing the return of income filed by the assessee for the assessment year 1993-94, it was noticed that the assessee had deposited a sum of Rs. 65,00,000 with M/s. Classic Financial Services and Enterprises Ltd., Calcutta, during the relevant previous y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wrong in holding that the interest income not returned by the assessee cannot be assessed to tax on the reassessment proceedings on the ground that the tax has been deducted at source. Further it is submitted that the tax deducted at source will not absolve the assessee from returning the correct income. Learned counsel appearing for the assessee submitted that simply because the assessee has not filed the return for the assessment year 1992-93, it cannot be said that the income has escaped assessment as the TDS was admittedly deducted from the amount paid to the assessee by the investment company. Therefore, that cannot be a reason for reopening the assessment. Heard counsel. The assessee-company was incorporated on October 1, 1990, an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al amount of Rs. 65,00,000 for a period of 94 days i.e. from January 27, 1992 to April 28, 1992. It is apparent that since the business had not commenced, the amount was deposited on January 27, 1992, and the interest income up to March 31, 1992, accrued to the assessee during the financial year 1991-92. This is an undisputed fact. Hence the interest income was liable to be taxed as income under "other sources" on accrual basis for the previous year for the assessment year 1992-93. The period of deposit was of no relevance as income from "other sources" was to be taxed on the basis of the financial year as the previous year. Since the amount was credited to the account of the assessee on March 31, 1992, itself by the payer, the income has n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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