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TMI Blog2019 (10) TMI 1317X X X X Extracts X X X X X X X X Extracts X X X X ..... obtaining in the name of JV company and the JV would give a bank guarantee to the Ministry of Coal, government of India. During the assessment year under consideration the assessee filed return of income on 29.09.2013 showing Nil income. The case was selected for scrutiny under CASS and statutory notices were issued to the assessee. During the course of assessment proceedings, the books of accounts of the assessee were produced which were duly examined by the AO on test check basis. It was noticed during the assessment proceedings that assessee had earned interest on FD income of Rs. 2,16,06,733/- for A.Y.2013-2014 and Rs. 1,58,81,730/- for the A.Y.2014-2015 on the fixed deposit of Rs. 17,51,98,378/- in A.Y.2013-2014 and Rs. 9,16,89,953/- in A.Y.2014- 2015, respectively both maintained with Canara Bank. In this regard a show cause notice was issued to the assessee stating that why the said income should be added to the total income of the assessee for above years under consideration. In response to the same, the assessee replied vide his letter dated 03.03.2016 for the A.Y.2013-2014 as under:- "Radhikapur (West) Coal Mining Private Limited is a joing venture (JV) company incorpor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the assessee has not disclosed in his return of income. In support of his contentions, ld. DR relied on the decision of Honble Madras High Court in the case of CIT Vs. Seshasayee Paper & Bards Ltd., [1985] 156 ITR 542 (Mad) and the decision of Honble Supreme Court in the case of Tuticorin Alkali Chemicals & Fertilizers Ltd. [1997] 93 Taxman 502 (SC). 7. On the other hand, ld. AR reiterated the submissions made before the CIT(A) and he also relied on the order of the CIT(A). Ld. AR also filed a written synopsis and the contents of which read as under :- The Respondent was allocated a Coal Block vide letter dtd 25 April, 2006 and also the same is de-allocated by the Gazette notification dtd. 24th September 2014.The genesis of the allocation and de-allocation is furnished as under: 1. The Radhikapur (West) Coal Block was allocated to Rungta Mines Limited jointly with OCL India Limited and Ocean Ispat Private Limited by Ministry of Coal vide its letter dated 25.04.2006 as mentioned in the letter dated 14.02.2014. 2. A joint venture company consisting of all the three aliocattees and named as "Radhikapur (West) Coal Mining Private Limited" was incorporated on 29.03.2010. 3. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessing Officer while doing scrutiny assessment, noted that there is a fixed deposit of Rs. 17,51,98,378/-, on account of which it earned an interest of Rs.Rs. 2,16,06,733/-. He gave an opportunity to the appellant to explain why the same shall not be treated as income from other source. The appellant furnished explanation why the amount should not be treated as income from other sources. The Learned Assessing officer without refuting the submission of the appellant, treated interest earned as income from other source. As per the Statement of Facts, in the Assessment Year under context, the appellant was in the process of doing paperwork like purchase of geological report, furnishing mining lease application, mining plan, efforts to get environment and forest clearance. However, when the process was completed, the mining allocation was cancelled without any fault of the appellant. The appellant raised share capital from its promoters to acquire land through IDCO and also furnished bank guarantee of Rs. 73.24 Crore. Hence, during the year under consideration, the appellant was in the process of setting up of coal mine and its business has not commenced. The Assessing Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder dated 14.02.2013, has recorded the findings as under :- 5. I have considered the matter carefully with reference to the facts and materials on record. I have also gone through the elaborate written submission filed by the assessee and taken note of the case laws referred to and discussed in the written submission. It may be pointed out here that the AO has not given any reasons in the assessment order as to why the interest earned on FDs should not be treated as capital receipt as claimed by the assessee and adjusted against the pre-operative expenses. The AO has also not discussed the reasons as to why the decision of the Hon'ble Delhi High Court in the case of Indian Oil Panipat Power Consortium Ltd, would not apply to the case of the assessee and how the decision of the Hon'ble Apex Court in the case of Tuticorin Alkali Chemicals & Fertilizers Ltd. applies to the facts of the assessee's case. It is clear from the assessment order that the AO's action to tax the impugned interest income is not backed by a speaking order. In the case of Indian Oil Panipat Power Consortium Ltd. v. ITO 315 ITR 255, the Hon'ble Delhi High Court was seized with a case of a c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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