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| The Tax Publishers2019 TaxPub(DT) 8423 (Del-Trib) INCOME TAX ACT, 1961
Section 143(3)
Where AO made addition of interest earned on deposit of advances received from Rural Electrification Company (REC), action of AO was unjustified because conditions stipulated for grants of funds to assessee clearly provided that interest earned on deposits shall be utilized for cost of projects by way of adjustment in last installment and therefore, there was no difference between funds granted by Government and the interest credited by bank in account of assessee.
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Assessment - Additions to income - Interest earned on deposit of advances received from Rural Electrification Company (REC) -
Assessee-company was wholly owned subsidiary of NTPC Ltd. It was engaged in business of distribution and supply of electric energy along with providing consultancy, supervision and project management and inspection services etc. Assessment under section 143(3) was completed after making disallowances of interest earned on deposit of advances received from Rural Electrification Company (REC). Held: Identical issue in case of assessee for assessment year 2009-10 was decided by Tribunal in favour of assessee. CIT(A) also made finding of fact that out of total interest earned by assessee interest related to this account. CIT(A) also made a finding of fact that the conditions stipulated for grants of funds to assessee clearly provided that interest earned on deposits shall be utilized for cost of projects by way of adjustment in last installment and therefore there was no difference between funds granted by Government and the interest credited by bank in account of assessee. CIT(A) correctly allowed relief to assessee and no infirmity was in his order.
Followed:Pr. CIT v. NTPC Electrical Supply Company Ltd. Director [Special Leave Petition (Civil) Diary No(s). 11488/2018, dt. 23-4-2018]
REFERRED :
FAVOUR : In assessee's favour
A.Y. : 2012-13
INCOME TAX ACT, 1961
Section 37(1)
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