Case Law Details
DCIT Vs National Bank for Agriculture & Rural Development (ITAT Mumbai)
ITAT Mumbai held that NABARD has acted as nodal or implementing agency for the schemes framed by GOI. Hence the amounts transferred to Tribal Development Fund/Watershed Development Fund are diverted at source itself and hence not taxable in the hands of the assessee.
Facts-
The assessee claimed a sum of Rs.2872.36 crores as interest expenditure. The AO noticed that the above said amount included a sum of Rs.682.55 crores which has been credited to Tribal Development Fund (TDF) account in the liability side of the Balance Sheet, i.e., the AO noticed that the said sum of Rs.682.55 crores was not payable to any bank or any other person, but the same has been claimed as expenditure. The AO also noticed that the assessee has credited a sum of Rs.4.88 crores to another fund named “Watershed Development Fund”.
AO rejected the submissions of the assessee and took a view that entire surplus amount is income of the assessee and the amount transferred to TDF is only a provision made for the future expenses.
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