2014 (3) TMI 728

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....ated 23rd November 2009. 2. By preferring the present Appeal, the Revenue has proposed the following substantial question of law :-      "Whether in law and on facts, the ITAT was right in not treating the interest of Rs. 21,22,253/= accrued on Fixed Deposits as income of the assessee ?" 3. Facts leading to the present Appeal, in a nutshell, are as under :- 3.1 The assessee-company filed its original return of income for the assessment year 2005-06 declaring total income at Rs. Nil on 31st March 2006. The said return of income was processed under section 143 (1) of the Income-tax Act, 1961 {"Act" for short}. Thereafter, it was noticed by the then Assessing Officer that the assessee had escaped income of Rs. 2....

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.... of the assessee, more particularly the condition that, "the interest earned on the central grant already released would form part of the central grant limit of Rs. 50 crore" and considering the decisions of this Court in case of Gujarat Municipal Finance Board v. Dy. CIT [Assessment] [1996] 221 ITR 317 (Guj.) as well as in case of Gujarat Power Corpn. Ltd. v. ITO [2013] 354 ITR 201 (Guj.), the Tribunal has allowed the appeal by deleting the addition of Rs. 21,22,153/= made by the Assessing Officer. 3.4 Feeling aggrieved and dissatisfied with the order dated 15th February 2013 passed by the Tribunal in ITA No. 1079/Ahd/2010 for A.Y 2005-06, the Revenue has preferred the present Tax Appeal with the aforesaid proposed substantial question ....

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.... and in case of Gujarat Power Corpn.Ltd. (supra), the Tribunal has held that the aforesaid amount of Rs. 21,22,253/= earned by the assessee as interest on the fixed deposit of Rs. 16.70 crore cannot be said to be its income. Considering the condition imposed by the Central Government, while releasing the grant in favour of the assessee, when the interest earned on the Central grant already released was required to be forming part of the Central grant, the learned Tribunal has rightly held that the interest earned on Rs. 16.70 crore cannot be said to be the income of the assessee. As such, the issue involved in the present Tax Appeal is directly covered by the decisions of this Court in case of Gujarat Municipal Finance Board (supra) and in ....