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Issues involved: Appeal against deletion of addition of interest earned on infrastructure development fund for A.Y. 2006-07.
Summary: The appeal by the Revenue challenged the deletion of an addition of Rs. 22,66,693 made on account of interest earned on an infrastructure development fund. The assessee, a local authority engaged in town area development, explained that the interest earned was not part of its income as it was credited by the Uttar Pradesh Government and withdrawals were controlled by a government committee. The AO made the addition despite these explanations. Upon appeal, the ldCIT(A) noted that in a previous year's case, the ITAT had deleted a similar addition. The Tribunal referred to relevant case laws and upheld the assessee's position that the funds were received under government orders and controlled by a high-power committee. The ldCIT(A) found the facts identical to the previous case and deleted the addition based on the ITAT's earlier decision. The Revenue appealed this decision, but the Tribunal upheld the ldCIT(A)'s order, citing the doctrine of stare decisis as the issue had been previously decided in the assessee's favor by the Tribunal and not reversed by the High Court. Therefore, the Revenue's appeal was dismissed, and the issue was decided in favor of the Revenue based on the previous decision and legal principles. Order pronounced in the Open Court on 5th April, 2010.
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