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Income Tax Appellate Tribunal, [ DELHI BENCH “A”, NEW DELHI ]
Before: SHRI N. K. SAINISHRI S. SRIVASTAVA
O R D E R PER N. K. SAINI, VP: These two appeals by the assessee are directed against the separate orders each dated 03.06.2015 of the CIT(A)-22, New Delhi. Since the issues involved are common and the appeals were heard together, so these are being disposed off by this consolidated order for the sake of convenience and brevity. 2. In for the assessment year 2010-11, following grounds have been raised:- 1 i. That order made u/s 250 of the Income Tax Act dated 03.06.2015 by the learned CIT (Appeals)-22 is erroneous in nature as he has confirmed the order of Ld. AO who made the addition in the total income which was arbitrary and uncalled for. ii. That the during the year under consideration the assessee company was into construction & development of Housing project and while incurring development expenses on the project reduced the interest on FDR of Rs. 5,39,740/- from the development expenses thereby reducing the construction & development cost of the project which is as per accounting norms and as per laws of the land. iii. That above interest was accrued on FDR’s which were provided to bank as a margin money for obtaining bank guarantees to submit before various Government Authorities. iv. That the learned AO made addition of Rs. 5,39,740/- in the total income of the assessee without giving consideration to the above facts that FDR’s were pledged to bank for obtaining bank guarantees for construction and development work. v. That the aforesaid addition of Rs. 5,39,740/- is unjustified and bad in law particularly in the light of facts of the cases of respondent. Name of the cases:- CIT vs Jaypee DSC ventures Ltd (2011) ITA 357/2010 (Delhi HC). CIT vs Bokaro Steel Ltd (1999) 236 ITR 315 (SC). Tuticorian Alkali Chemicals & Fertilizers Ltd vs CIT (SC). For the assessment year 2011-12 in ITA No. 5035/Delhi/2015 identical grounds are raised. The only difference is in the amount involved.
3. During the course of hearing the Learned Counsel for the assessee at the very outset stated that the issue under consideration is squarely covered by the order dated 17.07.2015 in ITA No. 922/Delhi/2013 for the assessment year 2009- 10 in assessee’s on case decided by the Income Tax Appellate Tribunal, Delhi Bench, “H”, New Delhi. Copy of the said order was furnished which is placed on record. It was further submitted that the FDR’s on which interest accrued for the years under consideration are the same which were there for the assessment year 2009-10.
4. In his rival submissions the Learned Sr. DR although supported the orders of the authorities below but could not controvert the aforesaid contention of the Learned Counsel for the assessee. 2
We have considered the submissions of both the parties and perused the material available on the record. It is noticed that an identical issue having similar facts was a subject matter of the assessee’s appeal for the preceding assessment year 2009-10 in wherein vide para no. 5 of the order dated 17.07.2015, the Income Tax Appellate Tribunal, Delhi Bench, “H”, New Delhi held as under: “We have heard the rival submissions of the parties and perused the material on record. Undisputedly, the interest income in question had arisen on account of margin moneys placed with bankers for the purposes of obtaining bank guarantees. These bank guarantees so required for furnishing landlords for rented premises and sales tax authorities. Renting up of premises as well as registration of the sales tax authorities are inextricably connected with the execution of the projects and therefore following the ratio laid down by the Hon’ble Supreme Court in the case of CIT Vs. Bokaro Steel Ltd. (supra) as well as by the Hon’ble Jurisdictional High Court in the case of CIT Vs. Jaypee DSC Ltd.(supra) and CIT Vs. K and Co.(supra), we direct the Assessing Officer not to treat as an income from other sources but reduce it from the cost of project. Accordingly, the appeal filed by the assessee is allowed.” So, respectfully following the aforesaid referred to order dated 17.07.2015, the issue under consideration is decided in favour of the assessee.