TaxTMI 
TaxTMI 
2023 (11) TMI 403
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....r, they were heard together and being adjudicated 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 attr....
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....es receivable in lieu of supervision and management of assigned highway 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 NHID....
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....arious projects would be deposited in the same account. 8. As per MoRTH Letter No. 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 Minu....
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....n by MoRTH to deposit the any Interest to CFI clearly demonstrate that the Interest earned on the deposits from the funds provided 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 Infrastru....
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....in the very recent judgment Council of Handicrafts Development Corporation Vs. ITO Exemptions, Ward-1(3) New Delhi [ITA No. 2723/Del/2019 (2020)] has held as under:- "7. We have heard 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....
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....he judgement of Hon'ble Jurisdictional High Court in the case of Delhi State Industrial Development [supra] and the decision of ITAT in the case of Council of Handicrafts Development Corporation (Supra), the ld. CIT(A) held that the interest income generated on funds owned by Gol is not an income in the hands of the appellant company but it is the income of Gol and accordingly it is not required to be taxed in the hands of the Appellant Company. Therefore, the ld. CIT(A) held tht the action of the AO treating the interest income in the hands of the appellant is not sustainable on the facts of the case as well as the law. 15. Before us, it has been submitted the "Entire interest earned" has already been deposited in to the consolidate....