Barring private equity partners (India) private limited Vs ACIT (ITAT Delhi)
If the Assessee select the option to received Interest on Non-Convertible Debenture at maturity but showing yearly interest in P/L account but offered to tax at the Maturity then AO cannot raise objection.
The assessee had subscribed to 7500 NCDs of Rs. 1,000/- each issued by Muthoot Finance Ltd.; that these NCDs have an interest obligation on the part of Muthoot; that theassessee is entitled to interest on these NCDs; and that the assessee has opted/chosen to receive interest on the maturity/redemption of these Debentures. Therefore, evident that on the expiry of 66 months, the assessee is entitled to receive Rs.2,000/- representing Rs. 1,000/- being the face value of NCD and Rs. 1,000/- being the interest for 66 months. The assessee, however, in order to comply with the Accounting Standard, had shown the Interest Income in its Profit & Loss Account. Accordingly, the assessee excluded the interest from the total Income while filing the return of income on 29/11/2013.
Apart from the contentions relating to the matter of accountancy followed by the assessee, it remains an admitted fact that for the assessment years 2015-16 and 2016-17 there was no objection from the learned Assessing Officer in respect of non-inclusion of this particular interest on NCDs and the return was processed under section 143(1) of the Act. For the assessment year 2017-18, however, there was a scrutiny of the return of income and the assessing officer accepted the non-inclusion of the interest on NCDs and did not make any adverse comment the consequent addition.
The rule of consistency demands that the Revenue cannot approbate and reprobate in respect of the very same issue from year to year and finally remains silent when the entire interest amount was offered to tax in the assessment year 2018-19.
