TMI Blog2015 (12) TMI 1891X X X X Extracts X X X X X X X X Extracts X X X X ..... parked in the bank would be of Ministry of Road Developments and State Rural Road Development Agency would not have any right over the interest income. Chapter X of the Accounting Manual of PMGSY Scheme is explicit in this regard and the AO erred in relying on Chapter XIII of the said Manual. Chapter X of the Accounting Manual is specific with regard to the nature and state of interest income, stating the interest income as belonging to the Ministry of Rural Development. The State Rural Road Agency does not have any control whatsoever on the interest income. That being so, the contents of Chapter XIII of the Accounting Manual, as rightly held by the ld. CIT(A), cannot over ride those of Chapter X of the Manual. J K State Rural Road A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The ld. CIT(A), while deleting the additions in all the years under consideration, held that the assessee was not liable to deduct tax on interest on deposits held by the Branch and he, therefore, cannot be treated as an assessee in default. While arriving at this conclusion, the ld. CIT(A) relied on the judgment of the ITAT Jaipur Bench in the case of ITO Vs. Branch Manager, State Bank of Bikaner and Jaipur, Jaipur in ITA No. 966 to 973/JP/2011. Aggrieved, the department is now in appeal before the Tribunal. 3. The ld. DR has contended that the ld. CIT(A), Jammu was not right in deleting the demands of Rs. 2,11,19,843/- in A.Y 2009-10, Rs. 1,35,84,394/- in A.Y 2010-11, Rs. 61,81,066/- in A.Y 2011-12 and Rs. 37,29,690/- in A.Y 2012-13 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opments and State Rural Road Development Agency would not have any right over the interest income. Chapter X of the Accounting Manual of PMGSY Scheme is explicit in this regard and the AO erred in relying on Chapter XIII of the said Manual. Whereas, the said Chapter XIII deals with the concept of TDS on interest income and accounting treatment to be given with regard thereto. It remains undisputed that such accounting treatment of TDS, as given in the Accounting Manual is of residuary nature and it constitutes merely a guideline in the event of TDS by the Bank. Chapter X of the Accounting Manual is specific with regard to the nature and state of interest income, stating the interest income as belonging to the Ministry of Rural Development. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terference is called for in well reasoned impugned order passed by the first appellate authority and accordingly we hold the same . 8. In the assessee s case, the ld. CIT(A) held that the J K State Rural Road Agency is a body established by the Government of Jammu and Kashmir, registered under the Societies Act and is fully funded by the Government. It was pointed out that, according to Sl. No. 40 of the notification issued in pursuance to section 195A(3)(iii)(f), any undertaking or body including society registered under the Societies Registration Act, 1860, financed wholly by the Government are exempt from deduction of tax on interest on their deposits. Relying on the decision of the Chandigarh Bench of the Tribunal in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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