The Delhi bench of Income Tax Appellate Tribunal (ITAT) has recently held that misplacing fixed deposits was not a ground for deleting addition of interest therefore the bench upheld the addition made by the Assessing Officer.
Assessee Smiths Detection Asia Pacific Pte Ltd company is incorporated under the laws of Singapore and is a tax resident of Singapore, within the meaning of Article 4 of the DTAA between India and Singapore.
The assessee is a part of UK based business conglomerate – Smiths Group and is engaged in the business of manufacturing and trading of security equipment manufacturing and trading of security equipment.
After filing the return assessee case was selected for scrutiny and while the proceedings assessing officer notice that as per Form 26AS, the assessee has received an amount of interest from Canara Bank but assessee did not disclose the full interest amount before the AO therefore the assessing officer made addition upon the interest amount. Aggrieved assessee filed an appeal before the ITAT.
Himanshu Sinha, and Bhuwan Dhoopar,counsel for the assessee submit “that assessee misplaced the fixed deposits and being capital assets, have written off the same. Therefore there is no question of earning any interest income”
Sukesh Kumar Jain, counsel for the revenue, confirmed the decision of the lower authorities.
After considering the facts and materials the division bench of the ITAT comprising N.K. Billaiya, (Accountant) and Anubhav Sharma,(Judicial Member) disallowed the above ground raised by the assessee and confirmed the addition . Further the bench observed that “The Canara Bank in Form No. 26AS has acknowledged the Fixed Deposits with it and has credited interest by deducting tax at source. Even if the Fixed Deposits are misplaced, the assessee can approach the Canara Bank and ask for duplicate Fixed Deposits.”
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