9911796707
TMI Blog2023 (11) TMI 403X X X X Extracts X X X X X X X X Extracts X X X X ..... geable to tax. As relying on DELHI STATE INDUSTRIAL DEVELOPMENT [ 2007 (4) TMI 150 - HIGH COURT, DELHI] CIT(A) held that the interest income generated on funds owned by Gol is not an income in the hands of the appellant company but it is the income of Gol and accordingly it is not required to be taxed in the hands of the Appellant Company. Therefore, the ld. CIT(A) held that the action of the AO treating the interest income in the hands of the appellant is not sustainable on the facts of the case as well as the law. Before us, as submitted the Entire interest earned has already been deposited in to the consolidated fund of India by way of challans. Since the entire amounts received as interest stands deposited in the consolidated fund of India, we hold that no addition is called for in the hands of the assessee. For the limited purpose of reconciliation of the interest earned and deposited in the CFI, we direct the assessee to furnish the entire details of receipt of interest income earned, TDS deducted and the total amounts deposited in CFI before the AO in a consolidated statement, which the AO shall verify and accord the benefit. Appeals of the Revenue are dismissed. X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the road and infrastructure projects are financed by the Govt. of India. The appellant has to incur the establishment expenditure towards payments of salary, rents and other establishment expenses, these operating expenses, are met from agency charges receivable in lieu of supervision and management of assigned highway stretches. 6. The appellant company held the funds provided by the Govt. of India in fiduciary capacity. The NHIDCL gets the funds sanctioned from the GOl for doing specific government projects and that money has to be invested for the said projects only, they can't be used for any other business purpose. For fulfilling the purpose, those funds are deposited into the separate bank account and considering them as the government fund through which expenses related to the project assigned are undertaken. The amount of Interest generated on the deposited amount is credited to the government fund only as it is the part of the government fund and not the income of NHIDCL. Some agency charges are provided to NHIDCL which is clearly stated as the income of the NHIDCL. The interest received on the amount deposited in government fund is received after the deduction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom GOl for the execution of the Road and Infrastructure Projects in Fiduciary Capacity i.e., as a Nodal Agency. 3. The Appellant Company cannot utilise funds received from GOl as per its own will and can be utilised only for the specified purposes as defined by GOI. 4. The funds received from GOl for project execution are kept in a separate bank account linked with the flexi account. 5. Further, the Ministry has now clarified that entire compound interest which has accrued on this account TO DATE shall be deposited in Consolidated Funds of India. 6. Further, the Company has already deposited the Interest on deposits for the period up to 31.03.2020 in the Consolidated Fund of India. 10. Looking into the facts of the case and from the contentions of the appellant made in its submissions, it becomes abundantly clear that the ownership of the funds provided by MoRTH/GOl alongwith the consequential income earned in the form of interest, clearly lies with the MORTH/GOl. Further, the act of the appellant company to deposit the interest earned up to 31.03.2020 in CFl and clarification by MoRTH to deposit the any Interest to CFI clearly demonstrate that the Interest earned on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting rent on behalf of Government of India from the tenants and then remits that rent as it is back to the Government. The building is owned by the Government of India. The assessee is not the beneficial owner of the rent as property was given by the Government to the assessee for its use. The assessee was merely collecting the rent. Thus, the rent collected by the assessee is definitively its income and rent paid back to the Government is its expenses. It is a lease in & lease out agreement/understanding. Therefore, on the rent paid to the assessee by the tenants, tax is deductible under Section 194l of the Income Tax Act, 1961. As assessee pays the same to the Government, it does not need to deduct tax at source on its repayment to the Government. Thus, in all practical purposes rent collected by the assessee from its tenants and rent paid to the Government (actual transfer of rent to the Government) is its outgo. Therefore, tax deducted by the Tenant should be granted as refund to the assessee as rent collected is its income in hands of the assessee and rent paid to the Government is its expenses. Therefore, the Assessing Officer as well as the CIT(A) was not right in denying th ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
