DCIT, C-1(1), Chandigarh V. M/s H.S. Tuli & Sons Builders Pvt. Ltd., Chandigarh

ITA 1515/CHANDI/2019

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 7615 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-06-2022
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 28-11-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRIYANKA DHAR
• Keywords: Depreciation; Tax effect; Capital receipt; TDS; Set aside
• Section: 147; 131; 148; 44AD; 73

Judgement Text

आयकर य कर , य य , IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH ‘A’,CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER ITA No. 1516 & 1517/Chd/2019 (Assessment Years : 2010-11 & 11-12) M/s. H.S. Tuli & Sons Builders Pvt. Ltd., No. 359, Sector 9-D, Chandigarh. बनाम The Dy. Commissioner of Income Tax, Circle 1(1), Chandigarh. ./PAN NO: AABCH 6642 P ITA No. 1515/Chd/2019 (Assessment Year : 2011-12) The Dy. Commissioner of Income Tax, Circle 1(1), Chandigarh. बन म M/s. H.S. Tuli & Sons Builders Pvt. Ltd., No. 359, Sector 9-D, Chandigarh. ./PAN NO: AABCH 6642 P न /Assessee by : Shri Tej Mohan Singh, Adv. / Revenue by : Shri Vivek Nangia, CIT D/R & Smt. Priyanka Dhar, Sr. D.R न /Date of Hearing: 04.04.2022 !" /Date of Pronouncement: 14.06.2022 आदेश/ORDER Per Vikram Singh Yadav, Accountant Member: These are three appeals filed by the assessee and revenue pertaining to assessment years 2010-11 and 2011-12 against the 2 ITA No 1516, 1517 & 1515/Chd/2019 M/s. H.S. Tuli & Sons Builders Pvt. Ltd. consolidated order passed by the ld. CIT (Appeals)-1, Chandigarh dated 02.09.2019. Since common issues are involved, all these appeals were heard together and are being disposed off by this consolidated order. 2. With the consent of both the parties, the case of the assessee in ITA No. 1516/CHD/2019 is taken as the lead case where the grounds/revised grounds of appeal read as under:- 1. That the ld. Commissioner of Income Tax (Appeals) has erred in law and facts in upholding the finding of the assessing officer that the amount of Rs. 4,05,439/- received as arbitration award was a revenue receipt and not a capital receipt not exigible to tax which is illegal, arbitrary and unjustified. 2. That the ld. Commissioner of Income Tax (Appeals) has further erred in law and facts in bringing to tax 8% of the total amount of Rs. 4,05,439/- resulting in sustenance of addition of Rs. 32,435/- which is arbitrary and unjustified. 3. Without prejudice to the above, the rate of 8% applied by the Commissioner of Income Tax (appeals) is highly excessive despite all payments having been received by cheque in the facts of the case which renders the order arbitrary and unjustified. 4. That the ld. Commissioner of Income Tax (Appeals) has further erred in not allowing the expenditure of Rs. 15,00,000/- incurred to recover the amount of Rs. 4,05,439/- which is allowable and as such the order passed is arbitrary and unjustified. 5. That the ld. Commissioner of Income Tax (Appeals) has erred in law as well as on facts in treating interest income as 3 ITA No 1516, 1517 & 1515/Chd/2019 M/s. H.S. Tuli & Sons Builders Pvt. Ltd. income from other sources as against business income expended in running the business which is arbitrary and unjustified. 6. Without prejudice to the above, the ld. Commissioner of Income Tax (Appeals) has further erred in upholding the addition of Rs. 11,90,123/- made on account of interest received without giving benefit of the allowable deductions u/s 57 of the Act against the taxable interest income which ought to have been allowed and as such the order passed is arbitrary and unjustified. 7. That the ld. Commissioner of Income Tax (Appeals) has erred in not considering that interest paid is merely compensation for fall in value of rupee and as such there is no income per se which renders the order arbitrary and unjustified. 8. That the appellant craves leave to add or amend the grounds of appeal before the appeal is finally heard or disposed off. 9. That the order of the ld. Commissioner of Income Tax is erroneous, arbitrary, opposed to law and f acts of the case and is, thus, untenable.” 3. Briefly the facts of the case are that certain information was received by the Assessing officer from DDIT-1, Chandigarh that Shri H.S. Tuli, Director of M/s. H.S. Tuli & Sons Builders Pvt. Ltd. has received a sum of Rs. 6,88,24,806/- as Arbitration Award from Government of India on behalf of M/s. H.S. Tuli & Sons Builders Pvt. Ltd. on account of various cases filed in the Civil Court of Chandigarh regarding cancellation of their projects by the Government of India pertaining to the period 1971 to 1973. Based on the said information and the fact that assessee had not filed its return of income, proceedings under section 147 were initiated and 4 ITA No 1516, 1517 & 1515/Chd/2019 M/s. H.S. Tuli & Sons Builders Pvt. Ltd. notice under section 148 was issued which was duly served upon the assessee and in response to the notice, the assessee filed Nil return of income. During the course of assessment proceedings, the assessee was asked about the arbitration proceeds and why the same has not been offered to tax. In response, the assessee submitted that the amount of Rs. 6,88,24,806/- was received during the financial year relevant to assessment year 2011-12 and only a sum of Rs. 4,05,439/- was received during the financial year relevant to the impugned assessment year. The assessee further submitted that the receipt of Rs. 4,05,439/- being a capital receipt, same was accordingly not offered to tax in the return of income. It was further submitted that the money recovered through Court from Union of India was kept in reserve and cannot be considered as income till the claims of Union of India are satisfied or finally rejected. The reply so submitted by the assessee was considered but not found acceptable to the AO. As per the AO, based on the statement of Shri H.S. Tuli recorded under section 131 of the Act during the course of assessment proceedings and perusal of Arbitration Award, the assessee’s contention that the Award receipt cannot be treated as income as the restitution application filed by the Union of India are still pending is not tenable as the said restitution application was in respect of Arbitration Award given to 5 ITA No 1516, 1517 & 1515/Chd/2019 M/s. H.S. Tuli & Sons Builders Pvt. Ltd. the assessee company in the year 2002. The present case is with respect to Arbitration Award granted in financial year 2010-11 and financial year 2009-10 which is in respect of other contracts and has been finally settled by the Hon’ble Supreme Court vide its order dated 20.01.2010. Therefore, the claim of the assessee company that the income is capital nature was not found acceptable and amount of Rs. 4,05,439/- was brought to tax in the hands of the assessee company. 4. Being aggrieved, the assessee company carried the matter in appeal before the ld. CIT(A) and before the ld. CIT (A), the assessee company reiterated its contention regarding keeping the amount in reserve against pending restitution application and the fact that the amount is capital in nature. It was further contended that the entire amount of Rs. 4,05,439/- cannot be brought to tax and only the profit element embedded therein can be brought to tax and reference was drawn to the provisions of section 44AD of the Act which provides for taxation of 8% of the Net Profit in the hands of the assessee company. The contention so advanced by the assessee company was considered by the ld. CIT (A). The contention of the assessee that the Award was capital in nature and not revenue receipt was not found acceptable to the ld. CIT (A) and the said contention was dismissed. However, in respect of estimating the 6 ITA No 1516, 1517 & 1515/Chd/2019 M/s. H.S. Tuli & Sons Builders Pvt. Ltd. N.P. as against bringing the whole receipt to tax, the ld. CIT (A) agreed to assessee’s contention that only element of profit can be brought to tax and by following various jurisdictional High Court decisions, the ld. CIT (A) restricted the addition to 8% of N.P. in the hands of the assessee being engaged in the business of execution of Government contracts and the relevant finding of the ld. CIT (A) are contained in para 4.2.2 to 4.2.4 which reads as under:- “ 4.2.2. Now let’s understand the exact nature of the Contract on which arbitration has been awarded. M/s. Harbans Singh Tuli & Sons, a sole proprietor of Shri Harbans Singh Tuli, entered into various building construction contracts with MES Department of Union of India. Because of cancellation of two contracts, one at Nahan and another at Pithoragarh, disputes and differences arose between the parties and consequently running or final payments against work done were withheld on all contracts in anticipation of alleged extra cost involved in completing left over work and which resulted in multiplicity of arbitration/litigation. In view of these facts and circumstances, the claim of the appellant that the award is capital in nature and not revenue receipts has no iota of truth that too in the absence of any documentary evidence because primarily it is a payment against work done in respect of a building construction contract and the amount received by any stretch of imagination cannot be coloured as capital in nature. 7 ITA No 1516, 1517 & 1515/Chd/2019 M/s. H.S. Tuli & Sons Builders Pvt. Ltd. 4.2.3. It is undisputed fact that an amount of Rs. 405,439/- was recovered/received from Union of India on 11.03.2010 i.e. during the AY 2010-11 for work done at Kasauli in the year 1973-74 and an amount of Rs. 6,88,24,806/- was recovered/received from Union of India during the period 16.06.2010 to 07.09.2010 i.e. A.Y. 2011-12 for work done at Ambala Civil Construction Agreement No. CENW-46/65-66 entered on 31.12.1966 by M/s. H.S. Tuli & Sons Builders (P) Ltd. against work done by M/s. Harbans Singh Tuli & Sons a sole proprietor of Sh. Harbans Singh Tuli through the appellant. This arbitration award includes principle amount and simple interest @ 18% for claim No. 1 to 35 from 31.03.1967 to the date of award i.e. 22.04.2008 and interest @ 15% for Claim No. 1 to 37 from 22.04.2008 till payment or court decree. It has been decided by various judicial authorities that interest on arbitration award cannot be treated as Income from Other Sources as it partakes colour of business receipts. Hon’ble SUPREME COURT OF INDIA in the case of CIT vs. B.N. Agarwala & Co. [2003] 129 TAXMAN 78 (SC) has decided that – “...3. We have heard counsel for the parties. The respondent- assessee entered into a contract with the Government for executing certain works. A dispute arose between the assessee 8 ITA No 1516, 1517 & 1515/Chd/2019 M/s. H.S. Tuli & Sons Builders Pvt. Ltd. and the Government which has referred to arbitration. The arbitrator awarded certain amount by way of compensation for the work done and also awarded interest. The question arose in the assessment proceedings, whether the interest awarded is income and is liable to be included in his assessment. The Income-tax Officer treated the same as income and included it after deducting the expenses. The appeal preferred by the assessee was allowed holding that interest is not income. An appeal preferred by the Revenue was dismissed by the Tribunal. On a reference, the Orissa High Court – CIT v. B.N. Agarwala & Co. [1993] 200 ITR 246, answered the follow3ing question in favour of the assessee, following its earlier decision in Govinda Choudhary & Sons v. CIT [1977] 109 ITR 497: “Whether, on the facts and in the circumstances of the case, interest awarded by an arbitrator is income to be assessed to tax under the Act?”(p. 247). 4. It is now brought to our notice that the decision of the Orissa High Court in Govinda Choudhary & Sons’ case (supra) was brought to this Court in appeal and has since been disposed of, which is CIT v. Govind Choudhary & Sons [1993) 203 ITR 881. In the said decision, it is recorded that learned counsel for the assessee conceded that interest did constitute a revenue receipt. The court, however, held on the other question (arising in that appeal) that the said amount of interest cannot be taxed under the head “Income from other sources” which necessarily meant that it has to be taxed as a business receipt. It is true that on the question whether the interest constitutes income or not, the said decision is based upon a concession but we are of the opinion that it was a concession rightly made and is correct in law. Accordingly, we hold that interest is income and it has to be 9 ITA No 1516, 1517 & 1515/Chd/2019 M/s. H.S. Tuli & Sons Builders Pvt. Ltd. assessed as a business receipt. The question referred is accordingly answered in favour of the Revenue and against the assessee in the above terms. The appeals are disposed of accordingly.” The appellant has also received net Rs. 4,49,661/- as interest after deducting Rs. 15,65,323/- as interest paid on overdraft, Rs. 3,11,494/- as TDS out of total interest on FDRs amounting to Rs. 23,26,478/-. Appellant has claimed that the recovery of these amounts was not final because due to setting aside award in respect of Nahan work on 10.04.2009 i.e. A.Y.2010-11, Union of India has filed application dated 08.03.2019 for revival of restitution application claiming Rs. 7,33,01,870.00 as on 02.03.2019. In addition, UOI is claiming over Rs. 73 lakhs with interest in respect of work at Pithoragarh. On careful perusal of documents, I am in agreement with AO’s view that the Company had received two claims i.e. the claim of Rs. 6,88,24,806/- on account of Arbitration Award dated 22.4.2008, which was received during F.Y. 2010-11 & F.Y. 2009-10 respectively, in respect of Contract Agreement No. CENW-46/65-66 and other award received vide Court order dated 20.11.2002. The order dated 20.01.2010 of the Hon’ble Supreme Court is clear that the Arbitration Award dated 22.04.2008 received in the F. Y. 2010-11 & F. Y. 2009-10 was completely settled ad no further appeal/restitution application is pending in respect of this claim, whereas the Restitution application filed by the Government was in respect of the claims received by the assessee company in the year 2002 or for work executed at Nahan and Pithoragarh. Hence, award received on work contract at Kausali and Ambala are considered as final. 10 ITA No 1516, 1517 & 1515/Chd/2019 M/s. H.S. Tuli & Sons Builders Pvt. Ltd. 4.2.4. The undisputed fact is that there was cancellation of two contracts i.e. one at Nahan and another at Pithoragarh, disputes and differences arose between the parties and consequently running or final payments against work-done were withheld on all contracts in anticipation of alleged extra cost involved in completing left over work and which resulted in multiplicity of arbitration/litigation. The moot character of contracts under arbitration is that appellant has executed the contracts and in order to execute these contracts he has to make necessary expenses. During assessment proceedings, appellant has submitted that “(vi) That while all the works were going on smoothly, trouble started with the work at Naha in 1971. Due to site conditions, large scale extra and additional work was ordered and executed at site of work. The contract amount of Rs. 24 lakhs almost doubled but the revised administrative approval could not be obtained by the concerned paying authority who in order to avoid making payment, wrongfully cancelled the contract in Aug 1973. The contractor had continued working for almost two years without payment investing his monies by selling his house in Delhi (now valued at about Rs. 20 crores), selling show-room plot on Madhya Marg Chandigarh (now valued at about Rs. 25 crores) and also mortgaged house4 No. 359, Sector -9D, Chandigarh. The contractor had also diverted funds from his other works in the hope of getting payment and completing the Nahan work. (vii) That with great difficulty and using jewelry of family members, the work at Solan, Kasauli and Jhakhri were completed under heavy losses but the work at Pithoragarh could not be completed and was also cancelled. The contractor from plenty became penniless and suffered tragedy in the family in the 11 ITA No 1516, 1517 & 1515/Chd/2019 M/s. H.S. Tuli & Sons Builders Pvt. Ltd. death of my grandfather. Unable to continue business, Lakhbir Singh Tuli went abroad and is now settled in Canada. (viii) That I 1978, one contract at Dharamsala and five contracts in J&K were allotted and while the work was in progress the MES Office at Pithoragarh and Nahan sent letters for recovery claiming damages and extra cost in executing cancelled works. Even the Income Tax Department at Chandigarh also initiated certain recovery proceedings. Due to stoppage of running payment, the contractor was able to complete one work in J&K only but all other five contracts were cancelled. While running from pillar to post to get some interim relief to survive, great tragedy struck the family when I lost my only son in an accident. (ix) That since further business stopped Maj. Balbir Singh Tuli and Balkrishen Singh Tuli also left India and are now in USA. S. Harbans Singh Tuli shattered due to loss in business built since 1936 and tragedies in the family, died of heart attack in June, 1982. In the meantime and in view of the facts and circumstances, loss returns were filed but of the Act accepted and after deposit of tax, recovery was withdrawn by Tax Authorities at Chandigarh....[Though appellant has no evidence to support the submissions on expenses]”. In the normal circumstances, if after completion of these contracts he gets payment from the MES Department he would have offered excess of receipt and expenses as income for taxation. Here in the ca se of the appellant when dispute arisen on Nahan & Pithoragarh Works running or final payments against work- done, the Works from where arbitration award has been received were also withheld in anticipation of alleged extra cost involved in completing left over work. This very fact envisages that though appellant has incurred expenses but final payment 12 ITA No 1516, 1517 & 1515/Chd/2019 M/s. H.S. Tuli & Sons Builders Pvt. Ltd. of Contract Works was not made to the appellant being withheld by the MES Department. Now appellant has received the said final payments by way of Arbitration Award amounting to Rs. 4,05,439/- for A.Y.2010-11 and Rs. 6,88,24,806/- for A.Y.2011-12. It is my considered opinion that only element of profit can be brought to tax. Question arises that what should be the basis of profit element I civil construction activity. Again this depends on whether there is a fierce competition for the tender, whether the tender has been submitted as a desperate attempt to get the job. In this case this fact cannot be established as no evidence is available either with the appellant or with the AO. Moreover books of accounts are also not available in the instant case. It is gathered that in the case of Government Civil Contractor, profit margin is generally confined to margin of 10% of the Project cost and contractor after deducting overhead expenses offers surplus as Net Profit. Appellant has also submitted that his profit & gains should be chargeable to tax @ 8% under section 44AD of the Act. Since appellant w as a sole proprietor at the time of entering into the said contracts he is covered u/s 44AD of the Act. However, I have carefully considered the facts and circumstances of the case and came to the conclusion that in the absence of books of account and any other supporting evidence brought on record either of the party and in the interest of present vision of the Income Tax Department i.e. “Litigation Management” it will be safe to bring NET PROFIT element @ 8% of the arbitration award to tax. Though it is undisputed fact that appellant must have incurred certain expenses to secure arbitration at different judicial authorities, but application of Net Profit @ 8% will take care of above expenses claimed by the appellant to procure 13 ITA No 1516, 1517 & 1515/Chd/2019 M/s. H.S. Tuli & Sons Builders Pvt. Ltd. arbitration award over and above regular expenses. Rate of profit on Govt. Civil Contractor is also strengthen by the following cases i.e. Hon’ble High Court of Punjab and Haryana in the case of CIT-II, Amritsar vs. Vidya Sagar Saini [2013] 35 taxmann.com 411 (Punjab & Haryana) has decided in the case of a civil contractor working primarily for the government department that applying 8% as net profit rate is not so arbitrary or perverse. Same view was taken by the Hon’ble High Court of Himachal Pradesh, in the case of Commissioner of Income-tax vs. Rakesh Mahajan [2015] 62 taxmann.com 158 (Himachal Pradesh) while determining net profit of Govt. Civil contractor. In the case of Commissioner of Income-tax vs. Bhullar Builders (P) Ltd. [2006] 286 ITR 686 (Punjab & Haryana), it is held that in view of non-maintenance of proper books of account, Tribunal adopted net profit rte of assessee at 8 per cent. In addition, since assessee had filed audit accounts along with audit report, balance-sheet, profit and loss account, fixed assets and depreciation chart Tribunal has rightly held that assessee was entitled to depreciation in view of the decision in the case of Chopra Bros. India Ltd. [2001] 252 ITR 412. However in the case of present appellant no such audit reports, balance sheet etc. was submitted before the AO or during appellate proceedings. Commissioner of Income-tax-II, Amritsar vs. Earth Tech Engineers [2014] 46 taxmann.com 287 (Punjab & Haryana) has held that Profit of contractor depend upon various factors like place of execution of contract, accessibility of labour, raw material, etc and would, therefore, vary from contractor to contractor and confirmed 8% net profit I the case of assessee-firm who was engaged in business of execution of government contract. By following above judicial 14 ITA No 1516, 1517 & 1515/Chd/2019 M/s. H.S. Tuli & Sons Builders Pvt. Ltd. pronouncements ad peculiar facts of the case, AO is directed to restrict the disallowance to Rs. 32,435/- for A. Y. 2010-11. The Grounds of Appeal Nos. 1 to 3 are partly allowed.” 5. Against the aforesaid findings of the ld. CIT (A), both the assessee as well as the Revenue are in appeal before us. 6. During the course of hearing, the ld. A/R submitted that the assessee does not wish to press Ground No.1 relating to whether the arbitration receipts are revenue or capital in nature. Hence the same is dismissed as not pressed. 7. Regarding Ground Nos. 2 to 4, the ld. A/R submitted that the limited grievance of the assessee is that the estimation of 8% of N.P. is highly excessive and given the fact that all the payments have been received by cheque, the estimation of N.P. may be brought down to a reasonable level and submitted that the same may be brought down to 6% of N.P. relying on the amended provisions of section 44AD of the Act. 8. Per Contra, the ld. D/R submitted that though the Revenue is not in appeal in A.Y. 2010-11 due to low tax effect, however, for assessment year 2011-12 the revenue is in appeal against the arbitrary estimation of N.P. by the ld. CIT (A). It was submitted that the ld. CIT (A) has considered not just the contract receipt but 15 ITA No 1516, 1517 & 1515/Chd/2019 M/s. H.S. Tuli & Sons Builders Pvt. Ltd. also the interest element which have been awarded as part of the arbitration as business receipt which is against the decision of Hon’ble Supreme Court in case of CIT vs. B.N. Agarwala & Co., 129 Taxman 78 (SC). It was further submitted that the various jurisdictional High Court decisions relied on by the ld. CIT (A) are distinguishable from the instant case as no issue of such Arbitration Award was involved in those cases. It was accordingly submitted that the estimation of N.P. of 8% was purely on estimation and surmises without any material on record and the said findings of the ld CIT(A) deserves to be set aside. 9. We have heard the rival contentions and purused the material available on record. The limited issue that arises for consideration is estimation of net profit @ 8% on the amount of arbitration award received by the assessee. The assessee is seeking for a lower estimation @ 6% relying on the amended section 44AD of the Act. The Revenue on the other hand is contending that the estimation of 8% is on an adhoc basis and the various decisions relied upon by the ld CIT(A) are distinguishable. Firstly, coming to the assessee’s contention, we find that before the ld CIT(A), the assessee in its grounds of appeal had contended that the whole of the receipts towards the arbitration award cannot be brought to tax and it should be restricted to net profit rate of 8% as per section 44AD of 16 ITA No 1516, 1517 & 1515/Chd/2019 M/s. H.S. Tuli & Sons Builders Pvt. Ltd. the Act. Therefore, we find that where the ld CIT(A) has accepted the assessee’s contention and has applied net profit @ 8%, the assessee has come in appeal before us and has sought further relief which amounts to fresh claim and relief which was not raised before the ld CIT(A). Having said that, we find that the CIT(A) has stated that various factors are relevant for estimating net profit rate such as nature of competition at the time of tendering, the estimation of costs at the relevant point in time, actual incurrence of expenditure, maintenance of books of accounts etc. It was held by the ld CIT(A) that neither the assessee nor the AO has been able to bring into record these evidences and even the books of accounts are not available. In such circumstances, the ld CIT(A) has proceeded to seek guidance from the provisions of section 44AD as well as various judicial pronouncements of the higher authorities wherein the matter relating to estimation of profits in the case of assessee involved in civil contracts was concerned and has held that it would be reasonable to estimate net profit @ 8% of the arbitration receipts. Here, it is relevant to note that the ld CIT(A) has given due credence to the fact that the said estimation will take care of expenses that the assessee has incurred for the purpose of securing the arbitration award. Coming to the contention advanced by the ld CIT DR that the ld. CIT (A) has considered not just the 17 ITA No 1516, 1517 & 1515/Chd/2019 M/s. H.S. Tuli & Sons Builders Pvt. Ltd. contract receipt but also the interest element which have been awarded as part of the arbitration as business receipt which is against the decision of Hon’ble Supreme Court in case of CIT vs. B.N. Agarwala & Co(Supra). We have gone through the order of the ld CIT(A) and find that the ld CIT(A) infact has relied upon the said decision of the Hon’ble Supreme Court and held that interest on arbitration award cannot be treated as income from other sources as it partakes the colour of business receipts and has to be assessed as business receipts. We therefore find that the ld CIT(A) has passed a very reasoned order taking into consideration the peculiar facts and circumstances of the case and various judicial pronouncements on the subject and therefore, we don’t find any justifiable basis to disturb the said findings of the ld CIT(A). In the result, the grounds of appeal taken by the assessee are dismissed. 10. In respect of ground nos. 5, 6 & 7, the ld. A/R basically submitted that the ld. CIT (A) has erred in confirming the interest income without giving the benefit of allowable deduction under section 57 of the Act. 11. Per Contra, the ld. D/R supported the findings of the ld. CIT (A) and submitted that the only contention which has been raised before the ld. CIT (A) relates to rate of interest being lower than the 18 ITA No 1516, 1517 & 1515/Chd/2019 M/s. H.S. Tuli & Sons Builders Pvt. Ltd. rate of inflation and as a result the said amount was not offered to tax. It was submitted that the ld. CIT (A) has rightly held that there was no such provision in the Act to accept such arguments and the contention raised by the assessee was accordingly rejected. 12. We have heard rival contentions and perused the material available on record. We agree with the findings of the ld CIT(A) that one has to go by the provisions of the IT Act and has to see whether any expenditure has been incurred for the purposes of earning the interest income. In the instant case there is no such evidence which has been brought on record that the assessee has incurred any expenditure which calls for allowance under section 57 of the Act. In the result, the grounds of appeal taken by the assessee are dismissed. 13. In the result, the assessee’s appeal in ITA No. 1516 for A.Y 2010-11 is dismissed. 14. For A.Y 2011-12, both the parties fairly submitted that the facts and circumstances of the case are exactly identical and contentions raised therein be considered for disposing off these appeals. Therefore, basis discussion and findings in ITA No. 1516/CHD/2019, the respective grounds of appeal taken by the 19 ITA No 1516, 1517 & 1515/Chd/2019 M/s. H.S. Tuli & Sons Builders Pvt. Ltd. assessee in ITA No. 1515/CHD/2019 and by the Revenue in ITA No. 1515/CHD/2019 are dismissed and both the appeals are thus dismissed. 15. In the result, both the appeals are dismissed. Order pronounced on 14.06.2022. Sd/- Sd/- ( SANJAY GARG ) (VIKRAM SINGH YADAV) याय क सद य/Judicial Member लेखा सद य/Accountant Member Dated: 14.06.2022 *Das * # $ % & '( )* '! / Copy of the order forwarded to : 1. )( +/ The Appellant 2. %, +/ The Respondent 3. # # - / CIT 4. # # - ()( )/ The CIT(A) 5. ' . / % 0 , # )( #0 ", 123 /4/ DR, ITAT, CHANDIGARH 6. / 3 5 / Guard File # $ स / By order, सह (ंज / Assistant Registrar Draft dictated 19.04.2022 Sr.PS Draft placed before author 20.04.2022 Sr.PS Approved Draft comes to the Sr.PS/PS 14.06.2022 Sr.PS Order signed and pronounced on 14.06.2022 File sent to the Bench Clerk 14.06.2022 Sr.PS Date on which file goes to the AR 20 ITA No 1516, 1517 & 1515/Chd/2019 M/s. H.S. Tuli & Sons Builders Pvt. Ltd. Date on which file goes to the Head Clerk. Date of dispatch of Order. 21 ITA No 1516, 1517 & 1515/Chd/2019 M/s. H.S. Tuli & Sons Builders Pvt. Ltd.