Facts. The Cit(A) Rightly Construed The Factual Positionand Held That The Interest Earned By The Assessee Accrued Fromfixed Deposits Which Were Made Out Of Busi v. Calcutta Nationalbank Ltd. Reported In (1959) 37 Itr 171(Sc) Wherein The Supremec

Form No.(J2) IN THE HIGH COURT AT CALCUTTASPECIAL JURISDICTION (INCOME TAX)ORIGINAL SIDE Present : THE HON’BLE JUSTICE T.S. SIVAGNANAM A N D THE HON’BLE JUSTICE HIRANMAY BHATTACHARYYA IA NO.GA/1/2017(Old GA/2815/2017) ITAT/298/2017 PRINCIPAL COMMISSIONER OF INCOME TAX-11, KOLKATA -Versus-WEST BENGAL HOUSING BOARD (PAN: ) For the Appellant: Mr. P. K. Bhowmick, Adv. For the Respondent: Mr. Subhabrata Dutta. Adv. Mr. Debashis Sarkar, Adv. Mr. Avra Majumdar, Adv. Heard on : 06.12.2021 Judgment on : 06.12.2021 T. S. SIVAGANANAM, J. : The appeal filed by the revenue underSection 260A of the Income Tax Act, 1961 (the ‘Act’ in brevity) isdirected against the order dated 22[nd] March, 2017 passed by theIncome Tax Appellate Tribunal, Kolkata “A” Bench (the ‘Tribunal’in short) in ITA No.284/Kol/2014 for the assessment year 2009-10. The revenue has raised the following substantial questionsof law for consideration: “(a) Whether on the facts and in the circumstances ofthe case and under the law, the Learned Tribunal was justifiedin law in upholding the decision of the CIT(A) and reversingthe decision of the assessing officer whereby the LearnedTribunal allowed deduction in full the assessee’s claim of theentire income from the interest from fixed deposits made outof accumulated profits and reserves as income derived from theindustrial undertaking for deduction, which the assesseeclaimed as its business income by filing a revised returnsubsequently? (b) Whether on the facts and in the circumstances ofthe case and under the law the Learned ITAT erred in allowingthe interest income earned on fixed deposits made out ofaccummulated profits and reserves of the assessee as incomederived from business and allowing the same to be deductedunder Section 80IB of the Income Tax Act?” (c) Whether the Learned Income Tax Appellate Tribunalwas correct in facts as well as in law in giving a correctinterpretation of the phrase “derived from” appearing inSection 80IA of the Income Tax Act, 1961?” We have Mr. P. K. Bhowmick, learned counsel for the appellant/revenue and Mr. Subhabrata Dutta, learned counselassisted by Mr. Debashis Sarkar and Mr. Avra Majumdar, learnedAdvocates for the respondent/West Bengal Housing Board, theassessee. The short issue which falls for consideration is whetherthe accrued interest in the hands of the respondent/assessee is tobe treated as income from business thereby entitling therespondent/assessee for exemption under Section 80IB(10) of theAct. Assessing Officer though did not have any material to showthat the respondent/assessee had income from other sources, on atechnical issue that such relief was not claimed by the assesseein its original return but only in the revised return, was of theview that this is an after-thought and denied the relief. Apartfrom that fact certain other observations were made by theassessing officer. The assessee being aggrieved carried thematter in appeal to the Commissioner of Income Tax (Appeals)-XIX,Kolkata (CIT(A)). The CIT(A) by the order dated 12[th] December,2013 allowed the appeal. Aggrieved by the same, the revenuepreferred appeal to the tribunal which was dismissed by theimpugned order.We have elaborately heard learned counsel for the partiesand carefully perused the materials placed on record. We find thatthe order passed by the CIT(A) is sustainable both in law as wellas on facts. The CIT(A) rightly construed the factual positionand held that the interest earned by the assessee accrued fromfixed deposits which were made out of business income of theassessee. Apart from that the assessee had no other source of income. The assessee is a Government of West Bengal undertakingand is engaged in the development of housing projects which wasinitially done by the housing Department of the Government of WestBengal and in the year 1972 the respondent was established andprojects were developed by the respondent by constructing LIG/MIGand HIG flats for sale to the general public. The CIT(A) on goingthrough the facts found that the income of the respondent/assesseeis only from sale of flats. The CIT(A) also examined as towhether the observation of the assessing officer that the assesseedid not make such a claim in the original return but only in therevised return was considered for its correctness as to whetherthe same could have been a ground to reject the revised return anddeny the claim for exemption. The CIT(A) noted that the earningof interest was not from the ‘first degree source’ and the samecould not be shown by the assessee as ‘income from other sources’in the original computation and hence revised computation wasfiled by the assessee during the course of assessment proceedingsand that the reason for rejecting the same as assigned by theassessing officer was incorrect. The CIT(A) rightly noted thedecision of the Hon’ble Supreme Court in CIT vs. Calcutta NationalBank Ltd. reported in (1959) 37 ITR 171(SC) wherein the SupremeCourt held that “business” is a word of very wide connotation andapplying the said decision to the facts of the case it was held that the income should be treated as business income. Thetribunal on its part, examined the correctness of finding recordedby the CIT(A) and approved by same. More importantly, thetribunal noted that the assessing officer himself has alloweddeduction under similar circumstances while completing theassessment for the assessment year 2006-07 under Section 143(3) ofthe Act. Thus, we find that the tribunal was right in rejecting therevenue’s appeal. In the result, the appeal fails and isdismissed and the substantial questions of law are answeredagainst the revenue.The connected application for stay (IA No.GA/1/2017, oldNo.GA/2815/2017)) also stands closed. (T.S. SIVAGNANAM, J.) I agree. (HIRANMAY BHATTACHARYYA, J.) A/s./bp