Tribunal allows appeals, directs deletion of interest additions, emphasizes impermissibility of double taxation.

The Tribunal partly allowed both appeals, directing the Assessing Officer to delete the additions of interest on capital and share of profit as they were already disclosed in the return of income. The Tribunal highlighted the incorrectness of taxing the interest under u/s.115BBE and emphasized the impermissibility of double taxation.

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Issues Involved:
1. Addition of interest receivable from a firm already included in the income returned and taxed u/s.115BBE for A.Ys. 2016-17 & 2017-18.
2. Justification of confirming the addition by the Assessing Officer and CIT (A).
3. Taxing of interest from the firm under u/s.115BBE.
4. Double taxation of the same amount by way of addition to the income returned.
5. Exemption of share of profit u/s 10(2A) of the Act.
6. Assessment being unabated and the absence of incriminating materials.

Analysis:

Issue 1: Addition of Interest Receivable
In the case of A.Y 2016-17, the assessee contested the addition of interest receivable from a partnership firm already included in the income returned and taxed u/s.115BBE. The Assessing Officer added the interest amount to the income as unexplained credit. However, the Tribunal found that the interest on capital and share of profit were already declared in the return of income. The Tribunal set aside the CIT (A) order and directed the Assessing Officer to delete the addition of interest, as it amounted to double taxation.

Issue 2: Justification of Addition
The Assessing Officer and CIT (A) confirmed the addition of interest on capital received from the partnership firm. The Tribunal observed that the interest was already disclosed in the return of income. The Tribunal directed the Assessing Officer to delete the addition, as the income was already offered in the return.

Issue 3: Taxing of Interest under u/s.115BBE
The Tribunal found the taxing of interest under u/s.115BBE to be incorrect, as the interest from the firm should have been assessed under u/s.28(v) of the I.T. Act, 1961. The Tribunal allowed the appeal and directed the Assessing Officer to delete the addition of interest.

Issue 4: Double Taxation
The Tribunal emphasized that adding the same income twice would lead to double taxation, which is impermissible. The Tribunal set aside the CIT (A) order and directed the Assessing Officer to delete the addition, as the income was already declared in the return.

Issue 5: Exemption of Share of Profit
The Tribunal noted that the share of profit from the partnership firm was exempt u/s 10(2A) of the Act. Therefore, the Tribunal directed the Assessing Officer to delete the addition related to the share of profit.

Issue 6: Assessment and Incriminating Materials
The Tribunal considered the assessment being unabated and the absence of incriminating materials. It emphasized that no addition is called for in such circumstances.

In conclusion, the Tribunal partly allowed both appeals filed by the assessee, directing the Assessing Officer to delete the additions of interest on capital and share of profit, as they were already disclosed in the return of income. The Tribunal highlighted the incorrectness of taxing the interest under u/s.115BBE and emphasized the impermissibility of double taxation.

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