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TMI Blog2015 (12) TMI 1891X X X X Extracts X X X X X X X X Extracts X X X X ..... ely, raised u/s 201(1) and interest u/s 201(1A) of the Income-tax Act, 1961 [hereinafter referred to as 'the Act', for short]. 2. Facts, in brief, are that the assessee is a Branch Manager of Moving Secretariat Branch of Jammu and Kashmir Bank Ltd. He was held as an assessee in default for not deducting tax at source on alleged deposits which were funds of the Central Government. The ld. CIT(A), while deleting the additions in all the years under consideration, held that the assessee was not liable to deduct tax on interest on deposits held by the Branch and he, therefore, cannot be treated as an assessee in default. While arriving at this conclusion, the ld. CIT(A) relied on the judgment of the ITAT Jaipur Bench in the case of ITO Vs. Bra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny declaration u/s 197 of the Act and also not a notified organization in terms of notification No. 3489 dated 22.10.1970. 6. Now, as correctly taken into consideration by the ld. CIT(A), as per the PMGSY [a scheme of the Ministry of Rural Development], any interest income accrued on surplus funds of the project parked in the bank would be of Ministry of Road Developments and State Rural Road Development Agency would not have any right over the interest income. Chapter X of the Accounting Manual of PMGSY Scheme is explicit in this regard and the AO erred in relying on Chapter XIII of the said Manual. Whereas, the said Chapter XIII deals with the concept of TDS on interest income and accounting treatment to be given with regard thereto. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in section 194A(3)(iii)(f) of the Act and as per notification, the Jammu Development Authority is a creation of J &K Development Act and satisfies the entry No. 39 of the said notification and we hold that no tax was deductible on interest accrued on FDRs of Jammu Development Authority with J & K Bank Ltd. Keeping in view the above discussion, we hold that no interference is called for in well reasoned impugned order passed by the first appellate authority and accordingly we hold the same". 8. In the assessee's case, the ld. CIT(A) held that the J & K State Rural Road Agency is a body established by the Government of Jammu and Kashmir, registered under the Societies Act and is fully funded by the Government. It was pointed out that, accor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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