2025 (7) TMI 674

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....of the Income Tax Act, 1961 (in short "the Act"). 2. The brief facts of the case are that the assessee had filed return of income for AY 2015-16, declaring "Nil" income. The case was selected for complete scrutiny and a notice u/s. 143(2) of the Act was issued on 25.07.2016. The assessee is 100 % Government of Gujarat entity with the main object to undertake construction/maintenance/repairs of residential/non-residential buildings for Police/Jail/ Home Guard Department, as per the directive of the Government of Gujarat. In the course of assessment, the AO found that the assessee was paid interest of Rs. 27,67,422/- u/s. 244A of the Act in respect of refund for AY 2010-11 paid on 11.01.2015. However, this interest was not disclosed in the p....

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....lly and properly the explanations furnished and the evidence produced by the appellant. The impugned order being a non-speaking order, it is liable to be quashed and set aside. 2.1 The Ld CIT(A) has grievously erred in law and or on facts in upholding that the interest income of Rs. 27,67,420/- on the investment of funds not belonging to the Appellant Corporation was chargeable to tax in the hands of the appellant though the refund of tax did not belong to the appellant. 2.2 That in the facts and circumstances of the case as well as in law, the Id. CIT(A) ought not to have held that the refund of income tax belongs to the appellant and as such corresponding income had accrued to him. 2.3 The Ld CIT(A) has grievously erred in law and o....

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....ontra Shri Hargovind Singh, Ld. Sr. DR submitted that the interest received u/s. 244A of the Act was income of the assessee and was required to be disclosed in the Income-tax return, as income earned from "other sources". He submitted that this interest was paid on the tax paid by the assessee/TDS made on behalf of the assessee and, therefore, the AO was correct in treating the same as income of the assessee. He further submitted that the taxability of interest u/s. 244A of the Act cannot be considered as mistake apparent from the record as it was a debatable issue. Therefore, the AO had rightly rejected the rectification application of the assessee. 7. We have carefully considered the rival submissions. There is no dispute to the fact tha....

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....eived by the assessee u/s. 244A of the Act. This interest was received on the excess tax deposited/collected on behalf of the assessee. Further, the interest received by the assessee was adjusted with the outstanding tax liability of the assessee itself for the AY 2011-12 and 2012-13. The ownership of the interest received u/s. 244A of the Act on the excess tax paid, was squarely with the assessee and not with the Govt. of Gujarat. The assessee has not contended that it was not liable to pay any tax on the interest earned by it or that its income was not taxable at all. 8. Be that as it may, the fact remains that ownership of the interest u/s. 244A of the Act was with the assessee and not with the Government of Gujarat. Further, as rightly....