ITAT decision grants partial appeal, remands Foreign Tax Credit claim for fresh review, directs interest levy, provides relief.

The ITAT allowed the appeal partly, remanding the claim of Foreign Tax Credit back to the AO for fresh consideration. The ITAT directed the AO to levy interest u/s. 234C on the returned income, not the assessed income, in favor of the appellant. Additionally, the ITAT instructed the AO to provide consequential relief regarding the charging of interest u/s. 234D. The judgment was pronounced on August 7, 2015.

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Issues:
1. Claim of foreign tax credit - Rs. 21,32,548
2. Levy of interest u/s. 234C of the Act
3. Charging of interest u/s. 234D of the Act

Claim of Foreign Tax Credit:
The appellant, a company providing software development services, filed a revised return to claim Foreign Tax Credit (FTC) of Rs. 21,32,548 for the assessment year 2010-11. The Assessing Officer (AO) did not grant the credit, as it was not claimed in the original return. On appeal, the CIT(A) also denied the claim. The ITAT observed that the revised return did claim the credit, but it was not considered by the AO or CIT(A). Consequently, the ITAT set aside the CIT(A)'s order and remanded the issue to the AO for fresh consideration.

Levy of Interest u/s. 234C:
The appellant contested the levy of interest u/s. 234C, arguing that it should be on the returned income, not the assessed income. The ITAT analyzed the provisions of section 234C and concluded that the interest is indeed to be levied on the returned income. Therefore, the ITAT directed the AO to levy interest on the returned income, allowing this ground of appeal.

Charging of Interest u/s. 234D:
The appellant raised a concern about the charging of interest u/s. 234D, which was deemed consequential. The ITAT directed the AO to provide consequential relief in this regard. Consequently, the appeal by the appellant was partly allowed, with the ITAT pronouncing the judgment on August 7, 2015.

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