Prakash Bhansidhar Hemdev , CHENNAI V. ACIT Non Corporate Circle 16 , CHENNAI

ITA 1646/CHNY/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 9243 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 9 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-04-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2010-2011
• Appeal Filed On: 28-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR M SRINIVASA RAO
• Assessee Lawyers: A KANAGARAJ
• Keywords: Assessment record; Set aside

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI . . . , ! ' # , % #& BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ./ ITA NO.1646/CHNY/2017 ) *) / ASSESSMENT YEAR : 2010-11 SHRI PRAKASH BHANSIDHAR HEMDEV, NO.56, KASTURI SATHIADEV AVENUE, MRC NAGAR, R.A. PURAM, CHENNAI - 600 028. PAN : AAHPB 6640 C V. THE ASSISTANT COMMISSIONER OF INCOME TAX, NON-CORPORATE CIRCLE 16, CHENNAI. (,-/ APPELLANT) (./,-/ RESPONDENT) ,- 0 1 / APPELLANT BY : SHRI A. KANAGARAJ, CA ./,- 0 1 / RESPONDENT BY : DR. M. SRINIVASA RAO, CIT 2 0 3% / DATE OF HEARING : 14.03.2019 45* 0 3% / DATE OF PRONOUNCEMENT : 01.04.2019 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER : THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-4, CHENNAI , DATED 21.03.2017 AND PERTAINS TO ASSESSMENT YEAR 2010-11. 2. THERE WAS A DELAY OF 36 DAYS IN FILING THIS APPE AL BY THE ASSESSEE. THE ASSESSEE HAS FILED A PETITION FOR CO NDONATION OF DELAY. WE HAVE HEARD THE LD. REPRESENTATIVE FOR TH E ASSESSEE AND 2 I.T.A. NO.1646/CHNY/18 THE LD. D.R. WE FIND THAT THERE WAS SUFFICIENT CAU SE FOR NOT FILING THE APPEAL BEFORE THE STIPULATED TIME. THEREFORE, WE C ONDONE THE DELAY AND ADMIT THE APPEAL. 3. THE ONLY ISSUE ARISES FOR CONSIDERATION IS ADDIT ION OF 24,42,634/- BEING INTEREST ON THE FIXED DEPOSIT. 4. SHRI A. KANAGARAJ, THE LD. REPRESENTATIVE FOR TH E ASSESSEE, SUBMITTED THAT THE ASSESSEE FILED RETURN OF INCOME ON 28.02.2011. ACCORDING TO THE LD. REPRESENTATIVE, THE ASSESSING OFFICER ISSUED NOTICE UNDER SECTION 142 OF THE INCOME-TAX ACT, 196 1 (IN SHORT 'THE ACT') ONLY ON 14.12.2012 WHICH IS BEYOND THE TIME L IMIT PROVIDED UNDER SECTION 143(2) OF THE ACT FOR ISSUING NOTICE, THEREFORE, THE CONSEQUENTIAL ASSESSMENT IS BARRED BY LIMITATION. MOREOVER, ACCORDING TO THE LD. REPRESENTATIVE, THE ASSESSEE IS FOLLOWING CASH SYSTEM OF ACCOUNTING. THEREFORE, TH E ACCRUED INTEREST ON THE FIXED DEPOSIT WOULD BE DISCLOSED BY THE ASSESSEE ON THE DATE OF MATURITY OF THE FIXED DEPOSIT. THEREFO RE, ACCORDING TO THE LD. REPRESENTATIVE, THERE IS NO NEED FOR ADDITION D URING THE YEAR UNDER CONSIDERATION. 3 I.T.A. NO.1646/CHNY/18 5. ON THE CONTRARY, DR. M. SRINIVASA RAO, THE LD. D EPARTMENTAL REPRESENTATIVE, SUBMITTED THAT ON VERIFICATION OF O RIGINAL ASSESSMENT RECORDS, THERE IS NO INDICATION THAT THE NOTICE WAS ISSUED WITHIN THE TIME PROVIDED FOR ISSUING NOTICE UNDER SECTION 143(2) OF THE ACT. ON THE MERIT OF THE APPEAL, THE LD. D.R. SUBMITTED THAT THE ACCRUED INTEREST HAS TO BE TAXED IN THE YEAR OF ACCRUAL. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE ONLY ISSUE ON MERIT IS ADDITION OF INTEREST ON THE FIXED DEPOS IT. IT IS AN ADMITTED FACT THAT THE FIXED DEPOSIT DOES NOT MATURE DURING THE YEAR UNDER CONSIDERATION. WHEN THE ASSESSEE HAS DEPOSITED IN THE FIXED DEPOSIT, THE ACCRUED INTEREST WILL AUTOMATICALLY BE CREDITED TOWARDS DEPOSIT AND THE ENTIRE PRINCIPAL AMOUNT AND ACCRUED INTEREST WILL BE PAID ONLY ON THE DATE OF MATURITY. THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT IT IS FOR THE ASSESSEE TO D ISCLOSE EITHER ON YEARLY BASIS OR ON THE DATE OF MATURITY. IN THIS C ASE, THE ASSESSEE CLAIMS THAT THE INTEREST SHALL BE DISCLOSED IN THE YEAR ON WHICH THE FIXED DEPOSIT WOULD MATURE. THIS IS ALSO ONE OF TH E METHODS OF DISCLOSING INTEREST. THEREFORE, NO ADDITION IS CAL LED FOR. IN VIEW OF 4 I.T.A. NO.1646/CHNY/18 THIS, WE ARE UNABLE TO UPHOLD THE ORDERS OF THE AUT HORITIES BELOW. ACCORDINGLY, ORDERS OF BOTH THE AUTHORITIES BELOW A RE SET ASIDE AND THE ADDITION OF INTEREST ON THE FIXED DEPOSIT IS DE LETED. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE COURT ON 1 ST APRIL, 2019 AT CHENNAI. SD/- SD/- ( ! ' # ) ( . . . ) (INTURI RAMA RAO) (N.R.S. GANESAN) % / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 7 /DATED, THE 1 ST APRIL, 2019. KRI. 0 .389 :9*3 /COPY TO: 1. ,- /APPELLANT 2. ./,- /RESPONDENT 3. 2 ;3 () /CIT(A)-4, CHENNAI-34 4. PRINCIPAL CIT- 5, CHENNAI 5. 9< .3 /DR 6. ) = /GF.