2020 (2) TMI 1146

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....Officer held that the interest which had accrued to the Assessee was liable to tax. 2. The brief facts are that the Assessee is regularly given grants by the State of Punjab for various purposes including the construction of houses for police officials. It so happens that in a particular year the grant remains un-utilized and the money which is parked in the bank earns interest. As per the Assessing Officer this interest was exigible to tax whereas the Commissioner and the Tribunal held otherwise. The basis for the Tribunal's decision is that the amount of interest which accrues on any money parked in the bank would be deemed to be a further grant for that particular purpose and can be used only for that purpose and in the event that....

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....e any funds for those purposes. The Tribunal also upheld the findings of the Government.   6. Before us the learned counsel for the appellant has vehemently argued that the absence of any instance where the interest income was ever returned to the Government and the absence of any stipulation to this effect in the letter releasing the various grants to the Assessee clearly show that the interest income belongs to the Assessee. 7. Counsel for the appellant has relied upon a judgment passed by the Supreme Court in Commissioner of Income-Tax, Bombay City II Vs. Sitaldas Tirathdas, 1961 AIR 728 but that case is not applicable because in that case what the Supreme Court had decided that if the interest is spent by the Assessee as per ....