2021 (7) TMI 438

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..... ssee preferred this appeal. 2. Brief facts are that during the Assessment Year 2012-2013, the assessee had subscribed to 7500 NCDs of Rs. 1,000/- each issued by Muthoot Finance Ltd.; that these NCDs have an interest obligation on the part of Muthoot; that the assessee is entitled to interest on these NCDs; and that the assessee has opted/chosen to receive interest on the maturity/redemption of these Debentures. As per the Allotment Advice, the assessee is entitled to receive interest on the expiry of 66 months from the date of allotment. Prospectus also makes it clear that the assessee has chosen to receive interest on the date of redemption of NCDs. It is, therefore, evident that on the expiry of 66 months, the assessee is entitled to rec .....

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..... ue. He therefore contends that the addition of interest for this particular year amounts to double taxation and also contrary to the conduct of the Revenue in accepting the contention of the assessee for subsequent years. 5. Per contra, it is argued by the Ld. DR that the assessee has been following the Mercantile system of accounting and therefore, the interest accrued in this year was rightly added by the learned Assessing Officer and the orders of the authorities below are in perfect consonance with the accounting policy of the assessee. 6. We have gone through the record in the light of the submissions made on either side. Apart from the contentions relating to the matter of accountancy followed by the assessee, it remains an admitted .....

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..... entire interest income of Rs. 75, 75, 000/-to tax. 8. In the circumstances, we are of the considered opinion that the rule of consistency demands that the Revenue cannot approbate and reprobate in respect of the very same issue from year to year and finally remains silent when the entire interest amount was offered to tax in the assessment year 2018-19. We, therefore, find substance in the submissions made on behalf of the assessee and hold that the impugned addition cannot be sustained. We consequently direct the learned Assessing Officer to delete the impugned addition. 9. In the result, appeal of the assessee is allowed. Order pronounced in the open court on this the 9th day of June, 2021 immediately after conclusion of hearing or vi .....

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