The Income Tax Appellate Tribunal (ITAT), Bangalore Bench directed the AO to bring on tax correct income earned from Fixed Deposits by examining bank statements.
The assessee, N.A. Haris contended that CIT (Appeals) erred in confirming the action of the A.O, without appreciating that the appellant had prematurely closed the fixed deposit and the interest paid was reversed on premature closure.
The assessee submitted that during the Financial Year 2011-12 had prematurely closed one fixed deposit with Vijaya Bank, Hassan Branch and the interest accrued on such FD was reversed subsequently. The assessee had declared Rs.4,50,840/- as interest from premature closure of FD. However, the CIT(Appeals) confirmed the additions of Rs.12,56,890 made by the AO.
It was submitted that the CIT(A) failed to appreciate the FD ledger account from Vijaya Bank, Hassan Branch which the assessee relied on to prove the transaction. Hence, the additions confirmed by the CIT(Appeal) amounting to Rs.8,06,050 is liable to be deleted.
On the other hand, the department contended that the assessee has not disclosed interest of RS.6,11,866 received from Vijaya Bank. The statement of Vijaya Bank shows that AO has correctly calculated the interest received and rightly brought it to tax.
The coram consisting of Beena Pillai and Chandra Poojari held that the Assessing Officer has to bring on tax the correct income earned from fixed deposits while going through the bank statements or certificate issued by Vijaya Bank, Hassan Branch in respect of fixed deposit prematurely closed by the assessee.
The ITAT while remitting the issue to the file of the AO for fresh consideration directed the assessee to produce bank statements or interest certificates in support of the income earned from the fixed deposit from Vijay Bank.
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