2017 (9) TMI 1758

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..... under the head 'Income from other sources' on account of being accrued interest income not declared by the assessee. 2. Whether in the facts and circumstances of the case, the Ld. Commissioner of Income Tax (Appeals) has erred in law and fact in deleting the addition of Rs. 10,62,6477- made by the A.O. as the assessee had not shown the same as income inspite of the fact that it was a taxable income on account of being receivable claim of Modvat and Canvat. 3. Whether in the facts and circumstances of the case, the Ld. Commissioner of income tax (Appeals) has erred in law and fact in deleting the addition of Rs. 7,47,49,7407- made by the A.O. on account of disallowance of interest u7s 43B(d) of the IT Act, 1961, ignoring the ....

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.... U.P. Cooperative, is interest free is not true. " The AO, however, added Rs. 85,50,000/- in the income of the assessee. 3. It was observed that in Schedule H of the balance sheet, the assessee has shown Modvat and Canvat claim as receivable, but it was added to the income of the assessee by Rs. 10,62,647/-. The AO further observed, in Schedule-C of the balance sheet, the assessee has shown following interest accrued and due but not paid : Shakkar Vishesh Nidhi Rs.1,18,29,590/- State Govt. Loan Rs.5,29,65,444/- UP Co-Operative Sugar Factories Federation Ltd. Rs.49,54,623/- Total  Rs.7,47,49,740/- The AO observed that the above interest is due to the public Financial Institution and State Financial Corporation, but have not b....

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....nd offered it as an income. The details are at pager book pages 53 & 54. The total interest expenses taken from U.P. Government is Rs. 6,65,15,444/- and deposited with U.P. Cooperative Sugar Factories Federation Ltd. and the interest accrued is Rs. 85,50,000/-. Therefore, the net interest expenses after netting off is appearing at page No. 40 under Schedule- T, under interest expenses, U.P. Government at Rs. 5,79,65,444/-. Therefore, the assessee has correctly accounted for it into his books of account and the ld. CIT(A) has rightly deleted to the addition of Rs. 85,50,000/-. 7. The Assessing Officer has added Rs. 10,62,647/- into the income of the assessee whereas it is in the nature of Modvat & Canvat receivable, which is appearing in Sc....

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....nt year 2008-09, held that the institution of Uttar Pradesh Government are not covered in the definition of public financial institution and thereby deleted the addition made by the AO. 12. Undisputedly, the assessee in Schedule - C of the balance sheet has shown the interest accrued and due but not paid as under:- Shakkar Vishesh Nidhi Rs.1,18,29,590/- State Govt. Loan UP Cooperative Sugar Rs.5,65,34,280/- Factories Federation Ltd. Rs.1,67,31,128/- Total Rs.8,50,94,998/- 13. Now, the sole question for determination in this case is, "as to whether the aforesaid lenders fall in the definition of public financial institution empowering the AO to invoke the provisions contained u/s 43(d)?" Identical issue has come up before the coo....