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TMI Blog2018 (2) TMI 664X X X X Extracts X X X X X X X X Extracts X X X X ..... TA No. 169/Agra'2015 dated 24.06.2015 for Assessment Year 2006-07 ignoring the facts that the said decision of Hon'ble ITAT Agra Bench Agra was not accepted by the department, but due to monetary limit, the appeal was not fled before the Hon'ble High Court." ITA No.170/Agra/2015 (AY 2010-11) "1. That having regard to the facts and circumstances of the case, Ld. CIT (A) has erred in law and on facts in confirming the action of Ld. AO in making addition of Rs. 26,71,081/- being Intereston Year Marked Funds (i.e. Development Fund & Infrastructure Development Fund). 2. That in any case and in any view of the matter Ld. CIT (A) has erred in law and on facts in not deleting the additions/disallowances made by Ld. AO as the assessment order is not sustainable on various legal and factual grounds and more so by recording incorrect facts and finding." 3. There is one and common effective issue regarding interest accrued on FDRs, which is part of Infrastructure Development Fund, involved in both the ITA No. 270/Agra/2016 (AY 2011-12) and ITA No.170/Agra/2015 (AY 2010-11) and therefore, both these appeals are adjudicated together for the sake of convenience. 4. The assessee is a s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... treated as income of the assessee. I, therefore, direct the Assessing Officer to delete the impugned addition at Rs. 7,26,878/-. The assessee gets the relief accordingly." 7.1 In the remand report, the AO has mentioned that order of Hon'bleITAT(Supra) though accepted by the department, however, it was due to the monetary limit that the appeal was not filed before the Hon'ble High Court. The AO has further stated that the assessee's appeal on the same issue for the assessment year 2010-11 has been decided by the Ld. CIT(Appeals) against the assessee. Thus as per the AO, the appeal for the year under consideration deserves to be rejected. The AO has not disputed the fact that the facts of the case for the year under consideration are the same as in the assessment year 2006-07. I further find that the Hon'ble ITAT while deciding the issue under consideration in ITA No.169/Agra/2015 has duly considered the order of the CIT(Appeals) for the AY 2010-11. Since the issue has been decided by the Hon'ble ITAT vide order dated 24.6.2015 in favour of the assessee after overruling the finding of Ld. CIT(Appeals) given in relation to the assessment year 2010-11, therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing interest. Therefore, I agree with the AO that even the balance amount of Rs. 15,71,581/- should be considered as revenue income in the hand of the assessee being earned on the investment made by it and such income cannot be said to be part of the Infrastructure Development Fund because this interest amount is not accumulated on the money deposited in a separate bank account maintained for the purpose of Infrastructure Development Fund to be utilized for infrastructure development of the city. Such account maintained with District Cooperative Bank has balance of Rs. 2,23,536/- only. The decisions cited by the Ld.AR in the case of Lucknow Development Authority and Saharanpur Development Authority would not apply in the present case under appeal because in the first case, the assessee was maintaining a separate Infrastructure Development Fund Account in a bank in which, amounts set apart by the assessee as per G.O. dated 15.12.1998 was being deposited and in the second case, the amount was being kept in a Narela Revolving Fund Account and these funds were not being invested by the assessee in FDRs for the purpose of earning of interest as is the case in the present appeal. Therefo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -4, Para-5 " In the context of the decision of the Supreme Court and this Court that income from securities has to be assessed as income from business and having regard to the admitted position that the true business of the assessee is only banking bus/ness" STATUTORY RESERVES OF BANKS PLACED WITH RBI - SLR AND CRR - TO REGULATE MONETARY POLICY; LIQUIDITY AND INTEREST RATE- THE INTEREST THEREON QUALIFIES AS INCOME OF ASSESSEE UNDER THE HEAD BUSINESS AND ELIGIBLE TO DEDUCTION U/S SOP IF THE BANK IS A COOPERATIVE SOCIETY. CONDUCT ARISING OUT OF COMPULSION OF LAW DOES NOT TAKE AWAY THE CHARACTER OF INCOME - THE DEPOSITS ARE IN THE NAME OF THE ASSESSEE AND EVEN AS PER CAG THE INTEREST HAS ACCRUED TO THE ASSESSEE. THE TREATMENT THEREOF IS NOT GOVERNED BV THE CAG OBSERVATIONS - ii) M/s. Southern Technologies Ltd. vs. JCIT Civil Appeal No. 1337/2003 - Supreme Court [Page: 5-32] Page-13 "45JA. Power of Bank to determine policy and issue directions (1) If the Bank is satisfied that, in the public interest or to regulate the financial system of the country to its advantage or to prevent the affairs of any non-banking financial company being conducted in manner detrimental to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mount has to be applied and thus out of the gross receipts the funds belonging to the State Government to be utilized as per their direction and are kept in separate bank account. The assessee do not have any ownership or control over such funds as the assessee is only a trustee. 8. The ld. counsel for the assessee further submitted that the same issue was earlier decided in favour of the assessee in ITA No. 169/Agr/2015 order dated 24.06.2015, AY 2006-07, in the assessee's own case by ITAT Agra Bench, Agra. He also submitted that the department has not filed appeal before the Honble Allahabad High Court against the said order of ITAT Agra Bench Agra in the assessee's case as he has not received any notice from the High Court in this reference till date. In support, he placed reliance on the cases of 'CIT vs. Delhi State Industrial Development, 295 ITR 419 (Del) and 'Saharanpur Development Authority vs. CIT, in ITA No. 132/Del/2009 where it is observed that interest earned by investing the surplus fund in banks belonging to state administration and not to the assessee and therefore, the interest could not be included in the income of the assessee. 9. We have heard the rival conte ..... X X X X Extracts X X X X X X X X Extracts X X X X
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