ASSISTANT COMMISSIONER OF INCOME TAX, KOLKATA vs. WEST BENGAL HOUSING INFRASTRUCTURE DEVELOPMENT CORPORATION LIMITED, KOLKATA

Q: Which sections of the Income-tax Act were involved?

Section 143, Section 254, Section 143(3)

ITA 1617/KOL/2024Status: DisposedITAT Kolkata30 July 2025AY 2012-134 pages

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the addition made by the AO resulted in double addition and taxation of the same income, i.e., interest on FDR earned during the year. The Tribunal noted that the assessee follows a system of accounting where interest on FDR is reduced from work-in-progress. The audited annual accounts showed that work-in-progress was reduced by the amount of interest on FDR, and consequently, it was not shown on the revenue side of the Profit and Loss account. The Tribunal found the order passed by the Ld. CIT(A) to be well-reasoned and cogent, taking a correct view of the matter. Therefore, the Tribunal upheld the Ld. CIT(A)'s order and dismissed the Revenue's appeals. The decision in ITA No. 1616/KOL/2024 for AY 2011-12 was applied mutatis mutandis to ITA Nos. 1617 to 1619/KOL/2024 for AYs 2012-13 to 2014-15. No issue was expressly left undecided.

What were the facts?

The Revenue has filed appeals against the orders of the National Faceless Appeal Centre, Delhi (Ld. CIT(A)) for Assessment Years 2011-12 to 2014-15. The appeals were filed with a delay of 48 days, which was condoned by the Tribunal. The common issue in these appeals concerns the deletion of additions made by the Assessing Officer (AO) regarding interest on Fixed Deposits (FDRs). The assessee, M/s West Bengal Housing Infrastructure Development Corporation Limited, is a government undertaking involved in land and infrastructure development. The AO had brought to tax interest income on FDRs, stating it was not offered for tax. This is the second round of litigation; in the first round, the Tribunal had restored the issue to the AO's file. The AO again made the addition in an assessment order passed under Section 143/254/143(3). The Ld. CIT(A) allowed the assessee's appeal.

What were the issues?

1. Whether the Ld. CIT(A) erred in deleting the addition made by the Ld. AO in respect of interest on FDRs for the assessment years 2011-12 to 2014-15, which was brought to tax on the ground that it was not offered by the assessee? Assessee's Contentions: - The assessee argued that the interest on FDR amounting to Rs.68,52,58,292/- had already been offered to tax. - Reliance was placed on a previous order of the jurisdictional ITAT in the assessee's own case for AY 2017-18 (dated 5th April 2023). - The assessee highlighted that in the previous order, it was stated that interest income on FDR was deducted from the project cost 'work-in-progress' and shown as income in the computation of income filed with the return. - The assessee further pointed out that Para 13 of the ITAT's order for AY 2017-18 clearly mentioned that interest on FDRs for that year already stood offered to tax. Revenue's Contentions: - The Revenue contended that the interest income on FDR was not offered to tax and therefore liable to be brought to tax by the AO.

Which sections of the Income-tax Act were involved?

Section 143,Section 254,Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “C” BENCH, KOLKATA

Before: SHRI RAJESH KUMAR, AM & SHRI PRADIP KUMAR CHOUBEY, JM

For Appellant: Shri Akshay Ringasia, AR &, Shri Praveen Kishore, DR

For Respondent: Shri Akshay Ringasia, AR &, Shri Praveen Kishore, DR

Hearing: 21.07.2025Pronounced: 30.07.2025

These are appeals preferred by the Revenue against the orders of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] even dated 16.04.2024, for the AYs 2011-12 to 2014-15

At the outset, we note that there is a delay of 48 days in filing these appeals before ITAT, for which the Revenue has filed condonation petitions.

After perusing the condonation petition and hearing the rival parties, we find that the delay is for genuine, bonafide and reasonable cause

The common issue in both the appeals by the Revenue is against the deletion of addition made by the ld. CIT (A) as made by the ld. AO in respect of interest on FDR in the order passed u/s 143/254/143(3) of the Income-tax Act, 1961 (the Act)by the ld. Assessing Officer. As the facts are similar in all the appeals, we take for A.Y. 2011-12 as the lead case and adjudicate the same.

The facts in brief are that the respondent assessee is a government of West Bengal undertaking, fully owned by the State Government and is engaged in development of land and infrastructure and housing projects. The ld. AO in the assessment proceedings brough to tax the interest income on FDR during the year on the ground that the same has not been offered to tax. We note that this is second round of litigation before us. In the first round the tribunal vide dated 20.09.2019 restored the issue of interest on fixed deposits to the file of the ld. AO. The ld. AO made the addition again in the assessment framed u/s 143/254/143(3) dated 27.09.2021.

In the appellate proceedings, the ld. CIT (A) allowed the appeal of the assessee by observing and holding as under: -

“DECISION Grounds 1 to 3 are general in nature. Grounds 4 to 7 relate to Interest earned on Fixed Deposits to the extent of Rs.68,52,58,292. WBHIDCO had received deposits from prospective purchasers of developed land or flats while the work of construction was in progress. In the assessment order under consideration, the AO was of the opinion that this Interest quantum had not passed through the P and L account, and was hence liable to be brought to tax. Before me, the appellant has referred to the order of the jurisdictional ITAT in its own case for the AY 2017-18. It submits as: to 1619/KOL/2024 for A.Y. 2012-13 to 2014-15, is similar to one as decided by us in for A.Y. 2011-12. Accordingly, our decision would, mutatis mutandis, apply to these appeals of assessee in ITA Nos.1617 to 1619/KOL/2024. Hence, the appeals of Revenue in ITA Nos. 1617 to 1619/KOL/2024 are also dismissed.

In the result, the all the appeals of the Revenue are dismissed.

Order pronounced in the open court on 30.07.2025.

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