TaxTMI 
TaxTMI 
2015 (10) TMI 1079
X X X X Extracts X X X X
X X X X Extracts X X X X
....earned CIT(A) has grossly erred in holding that appellant is not eligible for interest on refund of Rs.l 1,138/-. 4) In law and in facts and circumstances of the Appellant's case, the learned CIT(A) has grossly erred in holding that appellant is not eligible for interest on interest. We would like to mention here that while arguing the lead appeal i.e.ITA/6090/Mum/2013,it was stated by the representatives of both the sides that facts are identical in respect of each of the appeals.Therefore,for the sake of convenience,a consolidated order is being passed to adjudicate the above appeals. Brief Facts-(ITA No.6090/Mum/2013): 2.The assessee is beneficiary of K.Kacharadas Patel Specific Family Trust(KKPSFT),having 0.5%'present share and 0.5%'deferred share'in parent Trust'.For AY.under appeal,return was filed with on 23/6/1984,showing total income of Rs. 1,10,335/- .The returned income was accepted vide order,dated 27/2/1987,passed under section 143(3) of the Act.However,the assessment was made on protective basis as the income was assessed to tax on substantive basis in the case of main-trust.The main-trust,namely KKPSFT,was agitating the matter in further appeals.Later on, KKPSF....
X X X X Extracts X X X X
X X X X Extracts X X X X
....2015,the "F" Bench of the Tribunal had held as under :- 3.3.It is undisputed fact that in view of the substantial assessability of the income in the hands of the main Trust no income is assessable in the hands of these assessees. Thus, it is the case of the assessee that whatever tax is refunded to the assessee, the assessee is entitled to get interest on the said refund under the provisions of section 244(1A) of the Act. It is the case of the assessee that on similar facts and circumstances in the cases of other beneficiaries there is decision of Special Bench, which is dated 7/7/2006, copy of which is filed at pages 33 to 63 of the paper book and it was decided by the Special Bench that the beneficiaries are entitled to get the interest. The Special Bench while deciding this issue in favour of the assessee has considered the provisions of KVSS 1998 and after considering those provisions it was held that interest was rightly granted to the assessee. In the cases before Special Bench initially such interest was granted by the AO which was withdrawn by the CIT u/s.263 and it was held that interest was rightly granted by the AO. Reference was made to the following observations of th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....assessee. Therefore, we are of the considered opinion that the assessing officer has rightly accepted the prayers of the assessees and passed appropriate orders excluding the incomes which have already been considered in the hands of the Main Trusts under KVSS. Therefore, obviously, the assessing officer is justified in following the consequential procedure and making refund to the assessees. 30. One of the basic principles of taxation is that the income shall not be taxed twice. In the present case, the income under dispute is the same considered in the hands of the Main Trusts and also considered in the hands of the beneficial trusts. Kar Vivad Samadhan Scheme, 1998 was introduced by Government of India to settle the pending litigations at different levels and collect the tax once for all and reach finalities in the matters connected thereto. Even though KVSS was a special scheme, the KVSS did not propose to tax any income twice. Whether under the regular provisions of the Income-tax Act or under the scheme of KVSS what is to be assessed and subjected to tax is the real income once for all. KVSS does not create any artificiality. A case of double taxation of the same income can....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nvolved in the substantive assessment as well as in the protective assessments are one and the same. The income has been assessed substantively in the hands of the Main Trusts and the demand subsequently settled under KVSS. It is quite unnecessary to repeat that the income has already been assessed in the hands of the Main Trusts. Therefore, nothing remains thereafter to be assessed in the hands of the beneficiary trusts, as far as the income of Main Trust is concerned. Moreover, a case of assessment can be contemplated in the pre5ent cases because the stand taken by the assessees is that the, income of the Main Trusts has to be assessed in the hands of the individual beneficiary trusts. It is on the basis of that proposition that the returns were filed by the beneficiary trusts. While returns were filed by the beneficiary trusts in their individual capacities they are in fact offering income for taxation. Section 140A provides that when an assessee files a return of income and where tax is due as per the said return, the tax shall be paid by the assessee before filing the return of income and the proof of such payment of tax proof of such payment of tax shall be accompanied alongw....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s: (1.) Rectification application of the assessee from pgs. 106 to 108 (2.) Order passed by Ld. CIT(A) dated 19/9/2008 page 109 to 110 of the paper book. (3.) Order giving effect by the AO dated 11/2/2010 pages 111 of the paper book. (4.) Notice of demand under section 156 granting interest of Rs. 40,238/- page 112 of the paper book. (5.) Computation of such interest at pages 113 to 114 of the paper book. 3.6.Thus, it was pleaded by Ld. AR that in view of above submissions the necessary relief should be granted to the assessee. In this manner ground No.2 and 3 were argued by Ld. AR. 4.So far as it relates to Ground No.4, it was submitted by AR that since Revenue has deprived the assessee for long time for granting the interest or refund without any just cause, assessee should also be held entitled for receiving interest on interest. 5.On the other hand, after narrating the facts, it was submitted by Ld. DR that AO has rightfully denied interest to the assessee and referring to the order passed by Ld. CIT(A) it was submitted by Ld. DR that it has been clearly held by Ld. CIT(A) that according to the facts of the case it cannot be said that refund is due to the assess....
X X X X Extracts X X X X
X X X X Extracts X X X X
....anted by the AO. Special Bench has decided this issue in favour of the assessee and relevant observation of Special Bench have already been reproduced above. 7.1.The Revenue challenged the aforementioned order of Special Bench before Hon'ble Gujarat High Court and Gujarat High Court has not only upheld the decision of Special Bench on the issue regarding grant of interest but Hon'ble High Court has also directed Revenue authorities that they should not drag the assesseess to unnecessary avoidable litigation. In spite of such a warning given by the Court to the Revenue, the Department again in the present cases has dragged these assessees in litigation for non-granting of the interest. The relevant observations of their Lordships of Gujarat High Court have already been reproduced. It is made clear that the facts of the present cases and those which were decided by the Special Bench and Hon'ble Gujarat High Court are pari-materia and this fact was not disputed by the Revenue. The AO has adopted a view which is contrary to the decision of Special Bench and the decision of the Hon'ble Gujarat High Court and as he has again made the disallowance by rejecting the rectification applicat....