ITAT deletes Addition made on Interest Receipt without Jurisdiction by CIT(A) [Read Order]

The Kolkata bench of the Income Tax Appellate Tribunal (ITAT) deleted the additions made on the interest receipt without having jurisdiction by the Commissioner of Income Tax (Appeals) [(CIT(A)].

The assessee Guruji Mercantile Pvt. Limited has filed its return of income under section 139(1) of the Income Tax Act, 1961 declaring a total income of Rs.71,404/-.

Thereafter, the CPC while exercising the powers under section 143(1) Income Tax Act determined the total taxable income and cpc made an addition upon the interest receipt from M/s. Mohan Impressions Pvt. Limited.

The Revenue contended that the Tax Deduction at Source (TDS) was not deducted by the payer of the interest and, therefore, total interest income is to be included in the taxable income of the assessee.

The assessee contended that it has computed Rs.32,07,748 under the head “income from other sources" and in this income, the interest received from M/s. Mohan Impressions Pvt. Limited has been included.

The assessee has also placed on record the rectified Form 26AS exhibiting the fact that TDS was also made on this interest.

When an appeal is filed before the CIT(A) while considering the contentions of the assessee has observed that the assessee has income from ‘Winnings from Lottery’ or ‘Crossword Puzzles’.

It was observed by the tribunal that instead of deciding the issue of whether interest income from M/s. Mohan  Impressions Pvt. Limited has to be included in the income from other sources or not, CIT(A) has totally changed the colour by holding that all these aspects are to be ignored only gross income from  Winnings of Lottery or ‘Crossword Puzzles’ are to be taxed at 30%.

Instead of addressing issues related to the addition of Rs.5,64,863 upon the interest receipt the CIT(A) went into altogether a new issue and for that, it has no jurisdiction.

Therefore, the two members of Rajpal Yadav, (Vice-President) and Rajesh Kumar (Accountant Member)allowed the appeal of the assessee and deleted the addition made by the CPC.

Ranu Biswas appeared for the revenue. Abhishek Bansal appeared for the assessee.

To Read the full text of the Order CLICK HERE

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