sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax
Latest Expert Exchange
From the Courts »
 DCIT Circle 2(1) Gurgaon vs Kellog Brown & Roof Engineering & Construction India Pvt. Ltd. 16th Floor, Tower-A, DLF Building, Nos. 5, DLF Cyber Terraces, DLF Phase-III, Gurgaon
 Dharam Pal, Garg R Kumar & Associates, 7, Adv. Chambers, RDC, Raj Nagar, Ghaziabad vs ITO, Ward-1(2), Ghaziabad
 Satish Singhal, 6, Patpar Road, Shivpuri, New Delhi vs ITO, Ward-11(1), New Delhi
 Vodafone Mobile Services Limited vs. Commissioner Of Service Tax, Delhi
 Anupam Sushil Garg, S/o Shri Vijay Garg, C/o Venus Cinema, Railway Road, Saharanpur. vs. Income-tax Officer, Ward-2, Saharanpur.
 Oriental Building & Furnishing Co.Ltd. C/o. Ravi Gupta, Advocate E-6A, Kailash Colony New Delhi vs. DCIT Circle-13(1) New Delhi.a
 Housing Board Haryana, Panchkula, Haryana
 Broadcast Engineering Consultants India Limited, Multi Location, Multi State
 Ranjana Sen Gupta Raghavan, H-1592, Chittaranjan Park, New Delhi-110019 vs. Income Tax Officer, Ward-71(2), New Delhi
 M/s Sony India Private Limited A-31 , Mohan Cooperative Industrial Estate New Delhi -44 vs. The Deputy Commissioner of Income tax , Circle 24 (1), New Delhi
 Manik Singh S/o. Dr. Meharban Singh, A-47, Sector-31, Noida Uttar Pradesh Noida vs. DCIT Room No. 408, 4th Floor, A- 2D, Aayakar Bhawan, Sector-24 Noida

M/s. SI Group India Ltd. (formerly Schenectady India Holdings P. Ltd. Plot No. 2/1, T.T.C. Indl. Vs. Income Tax Officer- 3(3)(2) Mumbai
June, 04th 2014
                          "SMC" Bench, Mumbai

                  Before Shri D. Manmohan, Vice President

                            ITA No. 1044/Mum/2014
                            (Assessment Year: 2010-11)

 M/s. SI Group India Ltd.                          Income Tax Officer- 3(3)(2)
 (formerly Schenectady India Holdings P. Ltd.      Mumbai
 Plot No. 2/1, T.T.C. Indl. Area        Vs.
 Thane Belapur Road, Opp. Jui Nagar
 Rly Stn., Navi Mumbai 400705
                             PAN - AACCS2571D
               Appellant                                   Respondent

                     Appellant by:        Shri Vivyesh I. Shah
                     Respondent by:       Shri Javed Akhtar

                     Date of Hearing:       03.06.2014
                     Date of Pronouncement: 03.06.2014


Per D. Manmohan, V.P.

     This is an appeal filed at the instance of the assessee company and it
pertains to A.Y. 2010-11.

2.    Addition of `90,738/- referable to bank interest on fixed deposit is the
subject matter of dispute before the Tribunal.

3.    Admittedly, the assessee made fixed deposit with the Bank of Nova
Scotia for a period of 90 days which ends on 31.03.2009. However, interest
was paid by the bank on 02.04.2009. The assessee is following mercantile
system of accounting. Therefore, the impugned sum was offered to tax in the
previous year relevant to A.Y. 2009-10 and assessment was completed
accordingly. The AO is, however, of the view that the bank deducted the tax
at source on 02.04.2009 and credited to assessee's account within the
previous year relevant to A.Y. 2010-11. Therefore interest accrues to the
assessee only in the year 2010-11. In this regard he observed that the
interest was credited to assessee's account in this year and, therefore, the
assessee was required to reconcile the interest income. In reply the assessee
claimed TDS of `45,417/- pertaining to the total interest income of
                                       2                  ITA No. 1044/Mum/2014
                                                  Schenectady India Holdings P. Ltd.

`2,60,619/-. With regard to TDS of `4705/- it was stated that the assessee
company has not received the TDS certificates and, therefore, it did not
claim TDS in the return of income for A.Y. 2011-12. A careful scrutiny
reveals that the assessee credited the interest income of `2,60,619/-
whereas in the P & L Account, the income credited is `2,16,935/- only.
Since the assessee followed mercantile system of accounting, the interest
income amounting to `3,07,673/- as per 26AS should be brought to tax in
the year under consideration. In other words, addition amounting to
`90,738/- was made to the total income.

4.    Aggrieved, assessee contended before the first Appellate Authority that
the AO erred in making addition of `90,738/- being interest difference
between interest as per P & L Account and interest as per 26AS. It was
further clarified that interest of `90,738/- has been accrued in the year
2009-10 and the same has been assessed to tax in A.Y. 2009-10 and,
therefore, bringing the same amount to tax in this year would amount to
double addition.

5.    The learned CIT(A) did not discuss the issue in detail but merely
observed as under: -

     "Ground No. III: The appellant being a company is required to follow
     the mercantile system of accounting and therefore the interest
     accrued during the relevant previous year is required to be credited to
     the P&L A/c of the same period. The AO is therefore justified in
     making an addition of Rs.90,738/- i.e. the difference in interest
     income. The same is confirmed."

6.    Further aggrieved, assessee company is in appeal before the Tribunal.
At the time of hearing the learned counsel for the assessee adverted
attention of the Bench to pages 53 to 65 of the paper book to highlight that
the impugned interest income was offered to tax in the earlier year since the
interest is for the period ending 31.03.2009 and as per mercantile system of
accounting it accrues on the last date.

7.    The learned D.R. was not able to controvert the contention of the
assessee and no material, whatsoever, was furnished before me to show that
as per the terms of fixed deposit scheme the interest accrues only on
02.04.2009. It is also not in dispute that the impugned amount was already
                                           3                  ITA No. 1044/Mum/2014
                                                      Schenectady India Holdings P. Ltd.

offered to tax in the earlier year and assessment was completed under section
143(3) of the Act for A.Y. 2009-10 accepting the impugned interest as income of
that year. Having regard to the circumstances of the case I am of the view that
even as per mercantile system of accounting the impugned interest accrues on
31.03.2009 and, therefore, assessable to tax in A.Y. 2009-10. I therefore direct
the AO to delete the addition made in the year under consideration.

8.        In the result, the appeal filed by the assessee is allowed.

Order pronounced in the open court on 3rd June, 2014.

                                                        (D. Manmohan)
                                                        Vice President

Mumbai, Dated: 3rd June, 2014

Copy to:

     1.   The   Appellant
     2.   The   Respondent
     3.   The   CIT(A) ­ 7, Mumbai
     4.   The   CIT­ 3, Mumbai City
     5.   The   DR, "SMC" Bench, ITAT, Mumbai
                                                          By Order

//True Copy//
                                                       Assistant Registrar
                                               ITAT, Mumbai Benches, Mumbai
Home | About Us | Terms and Conditions | Contact Us
Copyright 2018 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - We Bring IT. Offshore software outsourcing company. We use Global Delivery Model (GDM) and believe in Follow The Sun principle

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions