2019 (10) TMI 146

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....rongly written as guarantee fees & in fact it is Interest on FDR made out of un-utilised funds provided by COP & CCS (Govt Organization)". 2. Briefly the facts of the case are that the above addition pertains to Guarantee Fees of Rs. 1,94,68,000/- on NTC bonds. In the Assessment Order, the AO stated that assessee has earned interest on FDR's made out of unutilised funds provided by Commissioner of Payment (COP) and CCS (Controller of Cloth Subsidy Funds) and taxable u/s 56(1) of the I.T. Act, 1961. The findings of the A.O. are reproduced in the appellate order which reads as under : "The submissions of the assessee are considered but not accepted because the interest income earned on the unutilized subsidy as given by the Ministry of....

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....ibed as income is table under the Act, unless expressly exempted. Also in the case of Commissioner of Corporation & Taxation vs Filcon 38 NE 2d 693, 700, it is held that though there are different concepts of "income* for the purpose of taxation, income is broadly defined as the true increase in the amount of wealth which comes to a person during the stated period of time." 2.1. The A.O, accordingly, made the addition of Rs. 1,94,68,000/-. 3. The assessee submitted before the Ld. CIT(A) that there was no guarantee fees paid by NTC during the year and addition on this ground be declared null and void. However without prejudice to above it was submitted that interest of the above amount was earned against FDR's held for and on behalf o....

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.... CIT vs Karnataka Urban Infrastructure Development and Finance Corporation [2006] 155 Taxman 228). The Ld. CIT(A), however, did not accept contention of assessee and noted that in the case of assessee credit of interest was not reversed on the advise of Comptroller & Auditor General of India. Hence, the case Law relied upon by assessee are distinguishable. Appeal of assessee was accordingly dismissed. 4. We have heard the Learned Representative of both the parties and perused the material available on record. 5. Learned Counsel for the Assessee reiterated the submissions made before the authorities below. However, he has admitted that certain funds are remain un-utilised and consequently FDRs were made, on which, interest was accrued agai....