TaxTMI 
TaxTMI 
2015 (10) TMI 2014
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.... seriously in law and on facts in not admitting additional evidences submitted before him during the course of hearing ignoring that for granting the justice the additional evidences were vital for adjudicating on the issue of taxing interest earned by the appellant on grant during pre operation period. 2. That the ld. CIT(A) has erred seriously in law and on facts in confirming the action of the ld A.O. whereby he has taxed the interest of Rs. 63,21,497/- earned by the appellant during pre operation period on the grant received from government of India." Grounds of revenue's appeal "1. In the facts and circumstances of the case, the CIT(A) has erred in restricting the addition made under the head income from other sources from Rs. 66....
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.... Officer gave reasonable opportunity of being heard by considering the Hon'ble Supreme Court decision in the case of Tuticorin Alkali Chemicals Fertilizers Ltd. 227 ITR 172. The assessee replied vide letter dated 22/10/2012 which has been reproduced by the Assessing Officer on page 2-3 of the assessment order. The ld Assessing Officer was not satisfied with the explanation filed by the assessee and after considering the decision of Hon'ble Supreme Court in the case Bokaro Steel 236 ITR 315 (SC) and Tuticorin Alkali Chemicals Fertilizers Ltd. (supra) treated the interest income as income from other sources. 3. Being aggrieved by the order of the Assessing Officer, the assessee carried the matter before the ld CIT(A), who had confir....
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....ies during the assessment proceedings, such documents were not furnished. The assessee has not raised this issue before the Assessing Officer at the time of assessment proceedings that the interest amount being of capital nature is to be reduced from subsidy received and accordingly interest earned on such FDRs should not be taxed. There is no sufficient cause to prevent the assessee from producing these evidences with the Assessing Officer, therefore, he had not admitted additional evidences under Rule 46A of the Rules. He also relied on the various decisions of the Hon'ble Jurisdictional High Court as well as other courts. He further held that there is no dispute on the fact that such interest income of Rs. 63,21,497/- was earned by the a....
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....to be admitted as Govt. of India has granted subsidy to the appellant and imposed certain restrictions on interest income as per various papers filed before the ld CIT(A). Therefore, the same may be allowed to be adjudicated. The ld CIT(A) was not right that interest income is income from other sources as number of riders had been provided by the Govt. of India on it. Therefore, the matter may be set aside to the Assessing Officer. 5. At the outset, the ld DR has argued that it is a settled law if any interest is earned at the time of pre-operation and fund put in the FDRs and interest earned thereon is income from other sources as held by the Hon'ble Apex Court in the case of Tuticorin Alkali Chemicals & Fertilizers Ltd. Vs. CIT (supra),....
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...., order of the Assessing Officer may please be confirmed. 8. At the outset, the ld AR has submitted that the ld CIT(A) has analysed the whole issue in depth. He further submitted that a private company was incorporated by the share holders of the assessee company to facilitate all the particulars for developing various infrastructures in the textile park at Kishangarh. The assessee also stated that the loan extended to M/s JTPL Texmart Pvt. Ltd. was utilized for buying of shares in the assessee's company and because of this reason, the loan was granted without any interest. No nexus has been established by the Assessing Officer that interest bearing fund was diverted for advancing money to the sister company, therefore, charging of intere....