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TMI Blog2019 (11) TMI 747X X X X Extracts X X X X X X X X Extracts X X X X ..... Act on account of certain violations and further made additions on account of undisclosed interest income Rs. 18,82,023/-. The Assessing Officer while disallowing assessee's claim of deduction under section 80 IB (10) of the Act observed that the assessee is not eligible for claiming deduction in respect of sale of car parking and also on resale of flat. 2.1 Aggrieved by the assessment order dated 18/03/2014 passed under section 143(3) of the Act, the assessee filed an appeal before the CIT(A). The CIT(A) allowed prorata deduction under section 80 IB(10) of the Act to the extent there were no violations in the residential building. The CIT(A) further held that the assessee is eligible for claiming deduction in respect of sale of car parking as well as on alleged resale of flat. However, CIT(A) upheld the findings of Assessing Officer qua addition in respect of undisclosed interest income earned by the assessee on fixed deposits from corpus fund, purportedly held by the assessee on behalf of the proposed residents Co-operative society. Against the aforesaid findings of the CIT(A), both, the assessee and the Revenue are in appeal before the Tribunal. 3. For the sake of convenien ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the submissions made by representatives of rival sides and have perused the orders of authorities below. The solitary issue raised by the assessee in appeal is against the addition of Rs. 18,82,023/- on account of undisclosed interest income. The contention of the assessee is that interest was generated on fixed deposits made from corpus fund of residents Co-operative society. Hence, the interest income is income of the society and not of the assessee. We do not find merit in the contentions raised by the ld.Authorized Representative of the assesse. It is an unrebutted fact that till the end of the previous year, the residents Co-operative society had not come into existence. The alleged corpus fund were deposited in the bank in the name of the assessee. The TDS on the interest on the said fixed deposits were deducted and credited to the PAN of the assessee. 7. Before we proceed to decide this issue, it would be relevant to refer to the dictionary mention of expression "fiduciary relationship". The Black's Law Dictionary defines fiduciary relationship as under:- "A relationship in which one person is under a duty to act for the benefit of another on matters within the scope of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd and offered the same to tax. The Assessing Officer held contribution towards corpus fund collected at time of sale as part of sale consideration of the flat. The assessee had collected the corpus fund in accordance with the provisions of Maharashtra Ownership of Flats Act, 1963 and had kept the same in separate account. The Tribunal in the backdrop of facts narrated above held that corpus fund is not income of the assessee. In the present case, it is not the collection of corpus fund but the interest on alleged corpus fund , which is subject matter of dispute. Corpus fund and interest on corpus fund are on different footing. Corpus fund is capital in nature, whereas, interest earned on corpus fund is revenue receipt. Therefore, the ratio laid down in the case of Evershine Builders Pvt. Ltd.(supra) cannot be applied in the case of assessee in assessment year under appeal. 10. We concur with the findings of the CIT(A) in confirming the addition on account of undisclosed interest income in the hands of assessee. The grounds raised by the assessee in appeal are de-void of any merit and, hence, the same are dismissed. ITA No.4114/Mum/2017- Revenue's Appeal: 11. The Revenue in its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,000/- only and they failed to make payment of the remaining sale consideration. Therefore, the booking was cancelled. The said flat was subsequently sold for Rs. 75,50,000/- on which the assessee claimed deduction under section 80 IB(10) of the Act . Thus, it is not the case of claim of deduction under section 80 IB(10) of the Act twice on resale of flat. 11.2 The ld. Authorized Representative for the assessee further submitted that as regards allowability of pro-rata deduction under section 80 IB(10) of the Act is concerned, the Hon'ble Bombay High Court in the case of Vandana Properties, 353 ITR 36 and the Hon'ble Madras High Court in the case of Viswas Promoters, 214 Taxman 524(Mad) has approved the same.. 12. On the other hand, ld. Departmental Representative vehemently defended the order of Assessing Officer in rejecting assessee's claim of deduction under section 80 IB(10) of the Act and prayed for reversing the findings of CIT(A) on this issue. 13. Both sides heard. Ground No.1 of the appeal by the Revenue is against allowing deduction under section 80 IB(10) of the Act in respect of sale of car parking . We find that this issue is squarely covered in favour of the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X
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