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| The Tax Publishers2020 TaxPub(DT) 4809 (Chen-Trib) INCOME TAX ACT, 1961
Section 5
Addition made by AO treating the interest income as accrued income of assessee could not be held as justified as department had not placed on record any evidence of receipt of interest from the sundry debtors, as the burden lies on the department.
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Income - Accrual - Interest income on debtors, whether to be considered as accured income -
AO held that since assessee had not specifically mentioned the method of accountancy followed in the return of income. CIT(A) had erroneously held that interest on debtors is not chargeable on accrual basis and therefore, pleaded for confirming to treat the interest income as accrued income of assessee. Held: Department had not placed on record any evidence of receipt of interest from the sundry debtors, as the burden lies on the department. However, AO estimated the accrued interest and treated it as income and brought to tax. Further, on identical issue in similar facts and circumstances in the case of Smt. Renu Sarin, wife of the Karta of the assessee [I.T.A. Nos. 226, 227, 228/Chny/2015 & 1814 to 1816/Chny/2014 : 2019 TaxPub(DT) 2458 (Chen-Trib)], the issue was decided against the assessee. Following the same addition made of accrued income was required to be deleted.
Followed:Smt. Renu Sarin, Wife of the Karta of the assessee [ITA. Nos. 226, 227, 228/Chny/2015 & 1814 to 1816/Chny/2014 : 2019 TaxPub(DT) 2458 (Chen-Trib)].
REFERRED :
FAVOUR : In favour of assessee.
A.Y. : 2010-11 & 2009-10
INCOME TAX ACT, 1961
Section 14A
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