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Facts
The Revenue filed appeals against the Ld. CIT(A)'s order which deleted an addition made by the Ld. AO regarding interest income on Fixed Deposit Receipts (FDRs) for Assessment Years 2011-12 to 2014-15. The Ld. AO had brought this interest to tax, alleging it was not offered by the assessee, a West Bengal government undertaking. This case marked a second round of litigation, as the issue was previously remanded to the AO.
Held
The Tribunal upheld the decision of the Ld. CIT(A), finding that the interest on FDRs was already accounted for by being reduced from the work-in-progress and, therefore, had been offered to tax, thus avoiding double taxation. The Tribunal relied on a prior jurisdictional ITAT judgment for AY 2017-18 which had decided a similar issue in the assessee's favour.
Key Issues
Whether the Ld. CIT(A) was correct in deleting the addition of interest income on Fixed Deposit Receipts (FDRs) made by the Ld. AO, when the assessee had already accounted for it by reducing it from work-in-progress, thereby offering it to tax.
Sections Cited
143, 143(3), 254, 263
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Income Tax Appellate Tribunal, “C” BENCH, KOLKATA
Before: SHRI RAJESH KUMAR, AM & SHRI PRADIP KUMAR CHOUBEY, JM
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.