TaxTMI 
TaxTMI 
2013 (2) TMI 553
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....nditure amounting to Rs.1,87,61,273/- u/s.36(1)(iii) and u/s.37(1) of IT Act. 2. Facts in brief as emerged from the corresponding assessment order passed u/s.143(3) of IT Act 1961 dated 26.12.2008 were that the assessee-company was incorporated as a Government company. The company is stated to be a nodal agency for development of Information Technology Industry in Gujarat State. It was noted by the AO that as per P&L account, a sum of Rs.1,87,61,273/- was debited. A provision for interest @ 6% was made by the assessee. As per AO, the said provision @ 6% was in the nature of interest on the unspent amount which was received as grants/advances from Department of Science & Technology. The AO was of the opinion that the said provision was no....
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....2.1. Being aggrieved the matter was carried before the first appellate Authority. 3. Before ld.CIT(A), the assessee has submitted as follows:- "1.1 The appellant is incorporated as Government Company on 19- 02-1999 under the Companies' Act, 1956. It is a nodal agency for Development of Information Technology Industry in the Gujarat State. It is through the appellant that Gujarat Government is implementing its I.T. Policies and Development of Information Technology in the State. The appellant is also carrying out the -work of E-Governance in the State of Gujarat on behalf of Govt. of Gujarat. The appellant also provides consultation services to various Government Departments, Boards and Corporations in Hardware procu....
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.... The appellant during the year earned an interest of Rs.2,82,60,028/- out of such inter corporate deposits which is offered as income. (Page No. 13, point No.8)" 3.1 Before ld.CIT(A), the case laws cited were as follows:- I. Shri Venkata Satyanarayan Rice Mill Contractors Ltd. vs. CIT. (S.C.) 223 ITR 101 II. Krishna Sahakari Sakhar Karkhana Ltd. vs. CIT (Bombay High Court) 229 ITR 577 III. CIT vs. Swat Jilla Kamdar Sahakari Sangh Ltd. Gujarat High Court) 200 ITR 157 IV. Mehsana Dist. Co-Op. Milk Producers' Union Ltd. vs. CIT (Gujarat High Court) 203 ITR 601 V. CIT Vs. Pandavpura Sahakara Sakkare Karkhane Ltd, (Karnataka) 201 ITR ....
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....e CIT(A). 7. We have heard both the sides. We have perused the orders of the authorities below in the light of voluminous compilation filed and case laws cited. The admitted factual position is that the assessee-company is a Government Undertaking incorporated for the implementation of IT Policies in the State of Gujarat and to provide consultation services to various Government Departments towards software development. Certain grants were given to the assessee. There was a clause as per certain Government Regulations that if an amount remains unspent out of the Grant, then the unspent amount shall bear interest @ 6% per annum. In the light of the said instructions, the assessee has made the provision in its books of account. In this reg....