TMI Blog2019 (9) TMI 1392X X X X Extracts X X X X X X X X Extracts X X X X ..... Account of the State Government - Correspondence between the Government of West Bengal and the assessee - HELD THAT:- The correspondence, which lead to the assessee investing in the Government Treasury, the terms and conditions under which such deposits/investments were made, have to be examined. The type of accounts being maintained, their numbers etc. have to be examined only on such detailed enquiry, in our view it can be concluded as to whether the deposits/investments in question is a non-interest bearing deposits/investments or not - set aside the issue to the file of the AO for fresh adjudication in accordance with law. AO shall issue necessary notices to the Director of Treasury, Directorate of Treasury and Accounts and thereafter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law, the Ld. CIT(A) erred in allowing the deduction claimed by the assessee under section 80IA(4)(i) without considering the findings made by the AO and thereby deleting the disallowance made by the AO for ₹ 8,26,94,832/-. 2. That on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition made in the assessment for accrued interest of ₹ 35-,91,389/- on the sum deposited in the Treasury Account of the State Government when the assessee did not produce any agreement with the State Government which implies that the assessee company was bound to deposit certain sum in the non-interest bearing Treasury Account. 3. That on the facts and circumstance of the case and in law, the Ld. CIT(A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in sub-section (4) which is pre-requisite qualification u/s 80IA of the Act. Therefore, in our opinion, the submission vide dated 14.03.2017 that the assessee being involved in development, operation and maintenance of infrastructural facilities and its income was earned almost entirely from such business activities i.e. development, operation and maintenance of infrastructural facilities is contrary to record i.e. P L A/c. Therefore, as rightly found by the AO that the assessee is not eligible to claim deduction u/s 80IA(4) of the Act as confirmed by the CIT(A) in his impugned order. 21. Further, on perusal of the balance sheet of the assessee, the CIT(A) found that the balance sheet does not reflect any income earned from other deve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... part of highway project. As discussed in the aforementioned paragraphs, the assessee failed to substantiate its claim before the two lower authorities. It is noted from the record that the Co-ordinate Bench of this Tribunal vide its order dated 02.12.2015 remanded the matter to the file of AO to examine all the requirements for allowing the aforesaid deduction with a direction to the assessee to provide all the details to substantiate its claim for the deduction u/s 80IA(4)(i) of the Act. As rightly pointed out by the Ld.DR that there were no such details provided by the assessee before the AO in claiming the said project in New Town is an integral part of highway project. Therefore, in our opinion, the assessee is not entitled to claim de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sits in Local Fund Account bearing no. 8448. 5. The ld. DR submits that this letter requires verification and that from the letter issued by the Joint Director, DTA, West Bengal dated 14.06.2016 it is not clear as to whether any interest is payable by them or not. 6. The ld. Counsel for the assessee relies on the order of the ld. CIT(A) and submits that the correspondence between the Government and Government Undertaking has to be believed and the Assessing Officer ( AO for short) cannot merely say that original copies were not produced and hence the correspondence is not believable. 7. After hearing rival contentions we are of the opinion that the entire gamut of correspondence between the Government of West Bengal and the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arned and the cost of the project and hence the interest income should be treated as a capital receipt, which will reduce the cost of the project. He did not follow the judgement of the Hon ble Supreme Court in the case of Tuticorin Alkalies Chemicals Ltd. vs. CIT (1997) 227 ITR 172. Before us, the ld. Counsel for the assessee pointed out that he had raised additional grounds on similar issue for the assessment year 2014-15, 2015-16 wherein he submitted that, interest income in question from F.Ds has already been offered to tax and hence, disallowing the same will result in double taxation. On enquiry from the Bench he submitted that, the finding of the ld. CIT(A) that the interest income in question is in the capital receipt, is not bein ..... X X X X Extracts X X X X X X X X Extracts X X X X
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