Fixed deposit interest treatment required fresh verification where maturity and reconciliation suggested taxation in different years.

Interest on fixed deposits, where the assessee contended that it became receivable only on maturity and was offered to tax in subsequent years, required verification on merits because the reconciliation statement indicated that matured amounts and interest were accounted for in different assessment years. The matter was remanded for fresh examination, with the Assessing Officer directed to consider the reconciliation and give the assessee an opportunity of hearing before deciding the tax treatment of the interest income.

---

---

Issues: Whether the interest on fixed deposits, in the light of the assessee's reconciliation and the maturity of the deposits, required fresh examination by the Assessing Officer.

Analysis: The assessee asserted that the interest became receivable only on maturity of the term deposits and that the amount had been offered to tax in the subsequent assessment years. The reconciliation statement placed before the Court showed that the matured amounts along with interest were accounted for in different years, and this aspect required verification on merits.

Conclusion: The matter was remanded to the Assessing Officer for fresh decision after considering the reconciliation and after giving the assessee an opportunity of hearing.

---