2011 (1) TMI 1271 - AT - Income Tax

Summary

Issues involved: Appeals by the assessee against orders of CIT (A) regarding disallowance of interest paid and fringe benefits tax assessment.

Appeals related to interest paid disallowance:
The assessee, a government undertaking providing housing loans, appealed against disallowance of interest paid to banks and financial institutions due to not showing interest income in profit and loss account. The assessing officer disallowed the interest claim as no interest income was offered. The CIT (A) upheld this decision. The assessee argued that recoveries from beneficiaries were not considered as income, and interest payments were part of expenditure. The department contended that no accounts for interest received were maintained. The ITAT found the assessee not in the construction business and allowed the interest payment claim, directing the assessee to provide details of interest received for assessment.

Appeal related to fringe benefits tax assessment:
The assessee appealed against the imposition of fringe benefits tax by the assessing officer, upheld by the CIT (A). The assessee claimed exemption under section 12A, stating the corporation did not fall under the status of an employer. However, no evidence was produced to show income exemption under section 12A. The ITAT confirmed the lower authorities' decision on the fringe benefits tax assessment.

Conclusion:
The ITAT partly allowed the appeals related to interest paid disallowance for statistical purposes, directing the assessee to provide interest details. The appeal regarding fringe benefits tax assessment was dismissed.