Pune Smart City Development Corporaion Ltd., Pune V. Income-Tax Officer, Ward 4(5), Pune

ITA 25/PUN/2023

AI Insights

The case involves Pune Smart City Development Corporation Ltd., which appealed against the order of the National Faceless Appeal Centre (NFAC) Delhi, which upheld the Assessing Officer's decision to tax interest income of Rs.10,90,67,924 on fixed deposits. These deposits were from a capital grant received from the Central Government. The assessee argued that this interest income should not be taxed as it was to be remitted back to the Central Government, as per guidelines from the Ministry of Housing and Urban Affairs. The Tribunal found merit in the assessee's request for a re-examination of the facts and admitted additional evidence provided by the assessee.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 137317 (ITAT-PUNE)
• Duration Of Justice: 4 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-05-2023
• Appeal Filed By: Assessee
• Order Result: AllowedAllowed
• Bench Allotted: B
• Next Hearing Date: 23-05-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 02-01-2023
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Additional evidence
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “B” : PUNE BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND DR. DIPAK P. RIPOTE, ACCOUNTANT MEMBER I.T.A.No.25/PUN./2023 Assessment Year 2017-2018 Pune Smart City Development Corporation Ltd., PMC Main Building, Shivaji Nagar, Pune PIN 411 005 Maharashtra. PAN AAICP5447P vs. The Income Tax Officer, Ward – 4 (5), Pune. Maharashtra. (Appellant) (Respondent) For Assessee : Shri S.N. Puranik For Revenue : Shri Deepak Garg Date of Hearing : 24.05.2023 Date of Pronouncement : 25.05.2023 ORDER PER SATBEER SINGH GODARA, J.M. : This assessee’s appeal for assessment year 2017-18, arises against the National Faceless Appeal Centre [in short “NFAC”] Delhi’s Din and Order No.ITBA/NFAC/S/250/2022- 23/1047091450(1), dated 07.11.2022, involving proceedings u/s. 143(3) of the Income Tax Act, 1961 (in short “the Act”). Heard both parties. Case file perused. 2. The assessee raise the following substantive grounds in the instant appeal : 2 ITA.No.25/PUN./2023 1. “Honourable Commissioner of Income Tax (Appeals) has erred in bringing to Tax Interest of Rs.10,90,67,924/- on fixed deposits with Bank out of Capital Grant received from the Central Government. ] Appellant prays to delete the same, as it is not the Income of the Assessee. [Rs.3,84,43,763/-]. 2. Commissioner of Income Tax (Appeals) has erred in not being just and equitable in not accepting Assessee's contentions, and making addition of Rs.10,90,67,924/- [Rs.3,84,43,763/-]. Appellant prays for deletion of addition. 3. Appellant denies liability to Interest charged u/s234A, 234B, 234C of I.T. Act. 4. Appellant prays for cancellation of Interest charged u/s.234A, 234B, 234C etc. 5. Appellant prays for Just and Equitable relief. 6. Appellant prays to add, alter, amend, take additional grounds, submit additional evidence, and/or withdraw the ground/s, during appellate Proceedings.” 3. Both the parties next invited our attention to the NFAC’s detailed discussion affirming the Assessing Officer’s action assessing interest income of Rs.10,90,67,924/- on fixed deposits representing capital 3 ITA.No.25/PUN./2023 grant received from the central government reading as under : 4 ITA.No.25/PUN./2023 5 ITA.No.25/PUN./2023 6 ITA.No.25/PUN./2023 3.1. Mr. Puranik submitted at the outset that both the learned lower authorities have wrongly assessed the impugned interest income once the same had to be remitted back in the central government’s account as per the necessary intimation coming from Government of India, Ministry of Housing and Urban Affairs, Mission Smart City Division. He highlighted the fact that the assessee has filed it’s additional evidence application running into 08 pages not only comprising of the above facts/letter in terms of GFR 2017 in clause 230(8) but also evidence of actual remittances of the aforesaid interest income in financial year 2016-2017 to 2021-2022 including that in issue of Rs.10,90,67,924/- by way of demand drafts. 7 ITA.No.25/PUN./2023 4. The Revenue could hardly dispute that all these remittance evidence(s) goes to the root of the matter which requires Assessing Officer’s afresh factual verification. That being the case, we admit the assessee’s above additional evidence and restore it’s corresponding substantive grounds back to the Assessing Officer for his de-novo adjudication on merits as per law preferably within three effective opportunities of hearing. Ordered accordingly. 5. This assessee’s appeal is allowed for statistical purposes in above terms. Order pronounced in the open Court on 25.05.2023. Sd/- Sd/- [DR. DIPAK P. RIPOTE] [SATBEER SINGH GODARA] ACCOUNTANT MEMBER JUDICIAL MEMBER Pune, Dated 25 th May, 2023 VBP/- Copy to 1. The appellant 2. The respondent 3. The CIT(A) NFAC, Delhi. 4. The CCIT, Pune. 5. D.R. ITAT, Pune “B” Bench, Pune 6. Guard File. //By Order// Assistant Registrar, ITAT, Pune Benches, Pune. 8 ITA.No.25/PUN./2023