2014 (10) TMI 925 - AT - Income Tax

Tribunal remands appeal, directs reassessment of interest liability under tax sections

M/s Harsh Estates Pvt. Ltd. Versus ACIT CC-31, Aaykar Bhavan, Mumbai

The Tribunal partially allowed the appellant's appeal, remanding certain issues back to the Commissioner of Income-tax (Appeals) for fresh adjudication, ... Interest expenditure - Held that:- As in the case of Eminent Holdings Pvt. Ltd. [2014 (7) TMI 2 - ITAT MUMBAI] wherein followed the decision of the Tribunal given in common group case of Hitesh S. Mehta [2013 (10) TMI 1065- 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. Charging of interest u/s 234A, 234B and 234C - Held that:- As Special counsel contended that the levy of interest is mandatory therefore it should be decided against the assessee. However the assessee contended that it may be sent to the Assessing Officer for actual calculation purposes only. Agreed, levy of interest is mandatory and sometimes consequential depending upon the facts of each case. We note that identical issue arose before the Tribunal in the aforesaid cases therefore following the reasoning contained therein, we direct the Assessing Officer to recomputed the interest liability after reducing the amount of tax deductable at source and decide as per the provisions of law. We direct accordingly, thus, this ground is allowed for statistical purposes. Issues:1. Assessment order passed by the Commissioner of Income-tax (Appeals) under section 250 of the Act.2. Compliance with the principles of natural justice in passing the order by the Commissioner of Income-tax (Appeals).3. Assessment of income from attached assets in the hands of the appellant.4. Relief of liability towards interest expenditure claimed by the appellant.5. Calculation of book profit under section 115JB.6. Charging of interest under sections 234A, 234B, and 234C of the Act.7. Delay in filing the appeal before the Tribunal for assessment year 2010-11.Analysis:1. The appellant challenged the orders of the Commissioner of Income-tax (Appeals) on various grounds, including errors in law and facts, lack of compliance with natural justice, and issues related to income assessment, interest expenditure relief, book profit calculation, and interest charges. The Tribunal considered the contentions and decided on each ground separately.2. Regarding the delay in filing the appeal for assessment year 2010-11, the appellant sought condonation of a 19-day delay, which was ultimately granted by the Tribunal after considering the reasons provided in the application and other circumstances.3. During the hearing, the appellant's counsel did not press certain grounds of appeal, which were subsequently dismissed as not pressed. However, the issue of relief towards interest expenditure claimed by the appellant was extensively discussed, citing previous decisions and factual similarities, leading to the remand of the issue to the Commissioner of Income-tax (Appeals) for fresh adjudication.4. The Tribunal also addressed the issue of charging interest under sections 234A, 234B, and 234C of the Act. While the appellant's counsel requested the matter to be sent to the Assessing Officer for calculation purposes, the Special Counsel argued for the mandatory levy of interest. Following previous decisions, the Tribunal directed the Assessing Officer to recomputed the interest liability, considering the tax deductible at source and deciding as per the provisions of the law.5. Ultimately, the Tribunal partly allowed the appeal of the assessee for statistical purposes, providing specific directions on the remanded issues and the calculation of interest liability. The order was pronounced in the presence of representatives from both sides at the conclusion of the hearing.