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Facts
The assessee initially filed a return for AY 2016-17. Following a search and seizure operation, the case was centralized, and the AO completed the assessment under Section 153A r.w. Section 143(3), adding Rs. 3,02,940/- for undisclosed investment in MIS. The Ld. CIT(A) dismissed the assessee's appeal. The assessee argued that an investment of Rs. 1,98,000/- was made in FY 2009-10, maturing to Rs. 3,02,940/-, and only the accrued interest should be taxed.
Held
The Tribunal noted that the original investment was made in FY 2009-10 and matured in FY 2015-16. Agreeing with the department's stance, the Tribunal held that only the interest accrued on the investment, and not the entire maturity amount, should be subject to taxation. The case was remitted to the AO for fresh verification with specific directions to tax only the accrued interest component.
Key Issues
Whether the entire maturity amount of an investment made in an earlier financial year or only the accrued interest component is taxable in the assessment year when it matures.
Sections Cited
139(1), 143(1), 132, 133A, 153A, 143(2), 142(1), 143(3)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “B” BENCH: KOLKATA
Before: Shri Rajesh Kumar&Shri Pradip Kumar Choubey]
ORDER / आदेश Per Pradip Kumar Choubey, JM:
This is the appeal preferred by the assessee against the order of Commissioner of Income Tax (Appeals), -27, Kolkata (hereinafter referred to as the Ld. CIT(A)] dated 20.09.2024 for AY 2016-17.
Assessment Year: 2016-17 Manjira Banerjee 2. Brief facts of the case of the assessee is that the assessee had filed her return of income on 15.03.2017 u/s 139(1) of the I.T. Act 1961 disclosing total income of Rs. 7,93,860/- and said return was processed u/s 143(1) of the Act on 31.05.2017. Later, a search and seizure operation u/s 132 and survey operation u/s 133A of the Act was conducted on 16.07.2016 and subsequent dates upon the assessee as a part of ‘Amitava Banerjee & Others Group of cases.’ Later the case was centralized on the Central Circle- 4(3), Kolkata on 20.10.2016. Further, a notice u/s 153A was issued and duly served upon the assessee and requesting to the assessee to file return of income. In response to the same the assessee had filed the return for the instant AY on 28.04.2018 declaring total income of Rs. 7,93,860/- same i.e. earlier. Subsequently, notices u/s. 143(2) and u/s 142(1) of the Act were issued to the assessee along with questionnaire. The A/R of the assessee appeared time to time and case was discussed by the AO. Later, the AO had passed the assessment order u/s 153A r.w.s143(3) on 26.12.2018 determining a total income of Rs. 10,96,910/-. On perusal of the assessment order, it is noticed that the A.O. had made only one addition viz a) Rs. 3,02.940/- in the form of Undisclosed Investment in MIS.
3. Aggrieved by the said assessment order , the assessee preferred an appeal before the Ld. CIT(A) wherein the appeal of the assessee has been dismissed.
Being aggrieved and dissatisfied the assessee preferred an appeal before us.
4. The Ld. A.R challenges the very impugned order thereby submitting that the AO as well as Ld. CIT(A) has erred in confirming the addition of Rs. 3,02,940/- in the undisclosed investment ignoring the fact that investment of Rs. 1,98,000/- was made in the year 2009-10 which after maturity comes to Rs. 3,02,940/-. The Ld. A.R further submits that the Ld. CIT(A) has erred in confirming the addition ignoring the fact that the investment was made during FY 2009-10 and added accrued interest therein in the AY 2016-17.
Contrary to that the Ld. D.R though supports the impugned order but consider to this fact that amount at Rs. 3,02,940/- was in fact come after maturity amount invested Assessment Year: 2016-17 Manjira Banerjee by the assessee in the year 2009-10 and that was an amount of Rs. 1,98,000/-. The Ld. DR has considered to this fact only interest accrued on the fixed deposit shall be added into the income of the assessee.
Upon hearing the submission of the counsel of the respective parties, we have perused the order of lower authorities and find that in course of search and seizure operation books of account/ documents were seized and on perusal of the seized material invested in MIS of Rs. 4,33,500/- (1,98,000/- + 2,35,500/-) was found during FY 2010- 11. It is observed by the Ld. CIT(A) that the assessee has not disclosed investment in MIS of Rs. 1,98,000/- during FY 2009-10 in the balance sheet and it is a fact that said investment in MIS got matured in FY 2015-16. It is further important to mention here that assessee has been requested to explain why Rs. 1,98,000/- should not be treated as unexplained investment and added to the total income. There is no denying to this fact that investment was made in FY 2009-10 and maturity amount come in FY 2015-16 i.e. amount of Rs. 3,02,949/-. We are in consonance with the view of the department that only the interest amount should be taken into consideration for taxation and not the entire amount.
Keeping in view of the above discussion, we are remitting the appeal of the assessee to the file of AO for fresh verification after affording an opportunity to hear the assessee and considering the fact that in maturity amount only interest accrued at the amount shall be taken into consideration for taxation and not the entire amount.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order is pronounced in the open court on 24th July, 2025
Sd/- Sd/- (Rajesh Kumar/राजेश कुमार) (Pradip Kumar Choubey /�द�प कुमार चौबे) Accountant Member/लेखा सद�य Judicial Member/�या�यक सद�य Dated: 24th July, 2025 SM, Sr. PS Copy of the order forwarded to: 1. Appellant- Manjira Banerjee, FE 216, Sector-3, Bidhan Nagar, 1B Market, S.O. Salt Lake-700106 2. Respondent – ACIT, Central Circle-4(3), Kolkata 3. Ld. CIT(A)-27, Kolkata 4. Ld. PCIT- , Kolkata 5. DR, Kolkata Benches, Kolkata (sent through e-mail)