2015 (4) TMI 1153 - AT - Income Tax

Tribunal partially allows appeals, addresses assessee's concerns, based on legal interpretations & case law

The Tribunal partly allowed all three appeals for statistical purposes, addressing the various issues raised by the assessee against the orders passed by ... Disallowance of interest expenses - Held that:- CIT(A) has followed the findings given in the case of Eminent Holdings Pvt. Ltd. [2014 (7) TMI 466 - ITAT MUMBAI] wherein followed the decision of the Tribunal given in common group case of Hitesh S. Mehta [2013 (11) TMI 1650 - ITAT MUMBAI] and restored the matter to the file of the Ld. CIT(A) for fresh adjudication. Respectfully following the findings of the Co ordinate Bench, we restore this issue to the files of the Ld. CIT(A) for fresh adjudication after giving reasonable opportunity of being heard to the assessee. Chargeability of interest u/s. 234A, 2324B and 234C - Held that:- Tribunal in the case of Topaz Holding Pvt. Ltd [2013 (10) TMI 1067 - ITAT MUMBAI]held that the chargeability of interest u/s. 234A, 2324B and 234C of the Act does not fall within the domain of the Special Court (Control of offences relating to transactions in securities) at 1992. Since levy of interest is mandatory and is very much applicable in the case of notified persons It has already mentioned that assessee has filed a declaration in Form No.8 under section 158A, therefore, according to the declaration filed the issue is decided against the assessee with a direction that when the decision on the question of law in respect of assessment year 2007-08 becomes final the same shall be applied to the present appeals accordance with sub-section (5) of section 158A of the Act. Accordingly, this ground for all the three years is decided against the assessee. Issues:- Appeal against orders passed by Ld. CIT(A) for assessment years 2001-02, 2002-03, and 2003-04.- Disallowance of interest expenditure.- Levy of interest under sections 234B and 234C of the Act.- Charging of interest under sections 234A, 234B, and 234C of the Act.- Applicability of provisions to notified entities.Analysis:Issue 1: Appeal against Ld. CIT(A) ordersThe appeals were filed by the assessee against orders passed by Ld. CIT(A) for the mentioned assessment years. Grounds of appeal were similar across the years, with differences in figures. It was noted that Ground No.1 of each appeal was not pressed by the assessee. Grounds No.2 and 4 were covered by earlier Tribunal orders, and in respect of Ground No.3, the matter was previously decided against the assessee. The issue was to be decided based on the outcome of a pending appeal before the Hon'ble Bombay High Court. The appeals were dismissed or decided against the assessee accordingly.Issue 2: Disallowance of interest expenditureRegarding the disallowance of interest expenditure, the Tribunal referred to a previous decision involving similar issues. It was noted that the matter had been restored back to the file of Ld. CIT(A) for fresh adjudication. The Tribunal directed the Ld. CIT(A) to consider relevant facts and accounting methods while deciding the issue afresh. The ground related to interest expenditure was allowed for statistical purposes in all three appeals.Issue 3: Levy of interest under sections 234B and 234CThe Tribunal discussed the levy of interest under sections 234B and 234C of the Act. It was observed that the chargeability of interest did not fall within the domain of the Special Court. Following the decision of the Hon'ble Jurisdictional High Court, the Tribunal allowed the appeal filed by the Revenue in part. The issue was decided against the assessee based on a declaration filed under section 158A, with directions for future application based on the final decision for another assessment year.Issue 4: Charging of interest under sections 234A, 234B, and 234CThe Tribunal addressed the charging of interest under sections 234A, 234B, and 234C of the Act in relation to notified entities. Citing relevant case law, the Tribunal held that the provisions were applicable to notified persons. The issue was restored back to the Assessing Officer for fresh adjudication considering the tax deductible at source on the income assessed. The ground related to this issue was allowed in part in favor of the assessee for all three appeals.In conclusion, the Tribunal partly allowed all three appeals for statistical purposes, addressing the various issues raised by the assessee against the orders passed by Ld. CIT(A) for the specified assessment years. The decisions were based on legal interpretations, previous Tribunal orders, and relevant case law, ensuring a thorough analysis of each issue presented.