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TMI Blog2016 (6) TMI 944X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 25th August, 2006 passed in ITA No.395/Kol/2006 was varied. The order dated 25th August, 2006 was as follows:- "On hearing the rival submissions on this issue, we could not, however, persuade ourselves to agree with the contention of Dr.Pal as because the case laws cited by him are not specific on the issue in hand. Further, in our considered view, erratic change in taking decision by the State Government machinery as to whether interest will be paid or not at a particular rate cannot spellbound the Income-tax department to act according to their whims and caprices. With this considered view, we are unable to accept the contention of Dr.Pal and reject the same." The aforesaid order was subsequently substituted in a miscellaneous appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f March, 2002 will be considered at the time of realization. Similarly it was noted that at Col.1(ii)(b) and Col.8 it has been mentioned that interest in deposit with Pay & Accounts Office, Kolkata for the entire year will be considered at the time of realization. Accordingly, it was queried to assessee that since mercantile system of accounting is being followed, why the amount involved of Rs. 216.08 crore will not be added to total income. In response, it was submitted that income from investments on loans and advances amounting to Rs. 4,478 lakhs has not been considered as the same has not been received subsequently in April, 2002 and that the fundamental accounting assumption of consistency and accrual had been followed in the prepar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vide letter dated 13-06-2001 and subsequently followed by letter dated 08-08-2001 and 27-03-2002. (III) The year of taxability of the aforesaid amount. 1.3 As it is evident from the order of the assessing officer he has held that interest on amount of term loan for the month of March, 2002 amounting to Rs. 51.75 crores and interest receivable amounting to Rs. 164.33 cores on deposits lying with the Pay & Accounts office in the previous year relevant to the Assessment Year 2002-03 should have been offered for tax on accrual basis." The learned Tribunal, by its original order dated August 25, 2006, had affirmed the addition of a sum of Rs. 164.33 crores without realising that the income did not accrue to the assessee as also without r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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