Itta/52/2013 Of Commissioner Of Income Tax-V v. Sri Dandamuri Avanindra Kumar

HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTAANDHON’BLE Ms. JUSTICE G.ROHINI I.T.T.A.No.52 of 2013 Date: 20.06.2013 Between: The Commissioner of Income Tax-V,IT Towers, A.C.Guards, Hyderabad. .....Appellant AND Dandamuri Avanindra Kumar H.No.88, Gunrock Enclave, Secunderaabd.. ...Respondent HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTAANDHON’BLE Ms. JUSTICE G.ROHINI I.T.T.A.No.52 of 2013 JUDGMENT:(per Hon’ble the Chief Justice Sri Kalyan Jyoti Sengupta ) This appeal is sought to be admitted on the followingsubstantial questions of law: 1. In the facts and circumstances of the case,Whether the Tribunal (ITAT) is correct in law inupholding the decision of the addition made byAssessing Officer in regard to the interest income on theamounts accrued and derived by the respondent-assessee on the amounts invested in the redeemabledebentures, when the said interest income is chargeableto tax on accrual basis? 2. In the facts and circumstances of the case,Whether the Tribunal (ITAT) is correct in law inupholding the finding of the learned Commissioner ofIncome Tax (Appeals) that the interest income would notaccrue on the debentures at the end of each year and therespondent-assessee has no right to receive the saidinterest on the investment in the debentures, without dueappreciation of related material facts and reasonsmentioned in the assessment order? We have heard the learned Counsel for the appellant andgone through the impugned order of the learned Tribunal. In orderto consider the arguments of the learned Counsel for the appellant,we have also gone through the findings of the assessing officerand that of the Commissioner of Income Tax (Appeals). It appearsat the time of scrutiny, the assessing officer made an addition ofRs.2,63,84,593/- on account of difference of interest received. The Commissioner of Income Tax (Appeals), however, found onfact as follows: “It is undisputed that the interest is cumulative,i.e., it is not payable to the assessee every year, butis accumulated and added to the amount invested inthe RCD. There is, therefore, merit in the assessee’sclaim that he had no right to receive the interestduring the year and the interest had not accrued. This view is also supported by the various case lawscited by the assessee. Therefore, even on accrualbasis, the interest had not accrued to the assessee,except to the extent of the TDS, and is not taxableduring the year. The addition of Rs.2,53,84,593/- tothe assessee’s income is deleted.” The learned Tribunal has examined the aforesaid fact-finding and has concurred with the fact-finding of theCommissioner of Income Tax (Appeals). We are of the view that interms of debentures, there cannot be accrual of income as thesame are cumulative in nature. If there is no accrual of income,the question of right to receive the interest does not and cannotarise. The learned Tribunal has also observed as follows: “Considering the above findings given by theCIT (A) that the interest would not accrue on theRCDs at the end of each year and the assessee alsohas no right to receive the said interest on account ofinvestment in the said debentures, we are of theopinion that the said order of the CIT (A) does not callfor any interference.” We, therefore, do not find any element of point of lawinvolved in this matter. The learned Tribunal has correctlyaccepted the order of the Commissioner of Income Tax (Appeals).Hence, we do not find any reason to interfere with the order of thelearned Tribunal. Accordingly, the appeal is dismissed. No order as tocosts. As a sequel, miscellaneous petitions, if any pending, shallstand dismissed. ___________________ K.J. SENGUPTA, CJ _______________ G.ROHINI, J 20.6.2013 Gsn.