TaxTMI 
TaxTMI 
TaxTMI 
2023 (11) TMI 403
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....ated by a common order. In ITA No. 132/Del/2023, following grounds have been raised by the Revenue: 1. Whether in the facts and circumstances of the case, Ld. CIT(A) was justified in deleting the addition of Rs. 191,34,88,102/- made on account of interest income generated on the funds received from Gol ignoring the fact that the assessee has not included the same in its ITR as income from interest as per provision of section 194A of the Income Tax Act? 2. Whether in the facts and circumstances of the case, Ld. CIT (A) was justified in deleting the addition of Rs. 191,34,88,102/- made on account of interest income generated on the funds from Gol ignoring the fact that tax is attracted at the point when the income is earned and Taxability....
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....stretches. 6. The appellant company held the funds provided by the Govt. of India in fiduciary capacity. The NHIDCL gets the funds sanctioned from the GOl for doing specific government projects and that money has to be invested for the said projects only, they can't be used for any other business purpose. For fulfilling the purpose, those funds are deposited into the separate bank account and considering them as the government fund through which expenses related to the project assigned are undertaken. The amount of Interest generated on the deposited amount is credited to the government fund only as it is the part of the government fund and not the income of NHIDCL. Some agency charges are provided to NHIDCL which is clearly stated as ....
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.... A-I 2025/27/2019-NHIDCL Cell dated 03.06.2019 it has been clarified that the Interest on Project funds needs to be deposited in Consolidated Funds of India (CFI) and it has also been clarified that entire compound interest which has accrued on this account to date shall be deposited in CFl. The appellant further clarified that vide Transaction No. 2710200003234 Dt. 27.10.2020 the appellant company had already deposited the Interest earned on deposits on the MoRTH funds, for the period up to 31.03.2020 in the Consolidated Funds of India (CFI). Hence, it proves that the ownership of Interest earned clearly belongs to Government of India. The copy of the Minutes of the meeting held on Dt. 16.10.2020 under the chairmanship of AS&FA has also be....
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....by MORTH/Gol was never the income of the appellant company. The appellant company has also stated that it has nowhere in the submission accepted the interest income as its income. The assessee has produced the proof of payment of such interest received into the Consolidated Fund of India account. The sample of same reproduced below:- 11. The appellant has also relied upon various judicial pronouncements which are as under:- (1) Commissioner of Income-tax v. Delhi State Industrial Development [2007] 162 Taxman 275 (Delhi//2007| 295 |TR 419 (Delhi) (2) CIT v/s Anr. V. Karnataka Urban Infrastructure Development & Finance Limited (2006) [284 ITR 582](Karnataka High Court) (3) M/S Rajasthan Urban Drinking ... vs. Assistant Commissioner of....
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....d both the parties and perused the material available on record. Facts briefly show that the assessee was collecting rent on behalf of Government of India from the tenants and then remits that rent as it is back to the Government. The building is owned by the Government of India. The assessee is not the beneficial owner of the rent as property was given by the Government to the assessee for its use. The assessee was merely collecting the rent. Thus, the rent collected by the assessee is definitively its income and rent paid back to the Government is its expenses. It is a lease in & lease out agreement/understanding. Therefore, on the rent paid to the assessee by the tenants, tax is deductible under Section 194l of the Income Tax Act, 1961. ....