TaxTMI 
TaxTMI 
TaxTMI 
2015 (11) TMI 6
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....rvations made therein by the Tribunal while deciding the assessee's Ground of the Appeal No. 4, as under, i.e., vide para 3.3 of its order: '4. The learned Commissioner of Income-Tax (Appeals) has erred in law and in facts in not granting relief of liability amounting to Rs. 8,09,700/-, towards interest expenditure claimed by the appellant.' The ground raises the issue of the deductibility of interest u/s. 57(iii). The background facts of the case stand listed at para 2 of the impugned order, which also delineates the respective cases of both the sides. The ld. CIT(A) disallowed interest on the ground that the matter being subjudice, the liability qua the same cannot be said to be an ascertained liability. The deductibility of interest wa....
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....s which were not before it, or incorrectly stated the facts. 3.1 We are, to begin with, at a loss to understand as to how the assessee is prejudiced; the tribunal only confirming the order/direction by the ld. CIT(A), further modifying it to hold that the interest could not be allowed at a rate in excess of the interest (rate) fetched on the term deposit wherein the borrowed funds stand invested. In other words, the impugned observations by the tribunal do not, in any manner, disturb or percolates its finding or decision, which is in conformity with the Revenue's stand of the liability being unascertained, so that no right has arisen in favour of the creditor. This is also precisely the Revenue's case as projected during hearing as well, w....
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....led on that basis. How, we wonder? The assessee does not specify the material or the basis for the said observation by the ld. CIT(A). Rather, the ld. CIT(A) himself - at para 7.7 of his order, states that regardless of the intention, the decision of the Hon'ble Special Court would be the relevant factor in determining the liability to interest. That is, he himself chooses to ignore the same, and proceeds to hold the issue of accrual of interest as disputed and, therefore, uncertain. The matter being subjudice, he, however, considers it fit and appropriate under the circumstances to harmonize and bring about a parity between the civil rights proceedings and the proceedings under the Act, so that the decision of the Special Court shall obtai....
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....e apparent from the order of the ld. CIT(A), which itself is of later date (10.09.2010), and stood subsequently confirmed by the tribunal. Had the assessee clarified this 'fact', there was no question of the first appellate authority aligning his decision to that by the Special Court, which also found favour with the tribunal. In fact, the assessee before the tribunal did not even refer to the order by the Special Court, placing on the six pages thereof on the file (PB pgs.30-35), as noted by the tribunal at para 3.3 of the impugned order. Nevertheless, in our view, a prejudice stand caused to the assessee. True, the assessee is responsible in-as-much as it did not furnish the full facts at the first and the second appellate stage, even as ....
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....e or during the relevant years, as noted by the tribunal earlier. This is also not for the reason that no interest was agreed upon for subsequently, i.e., during and up to the relevant year, both of which are reasons, by itself sufficient to deny the assessee's claim for interest on ground of no liability in its respect accruing or arising. The special court holds the sum/s payable by A to B as being liable to be adjusted against the liability of B, or of A, or even of C for that matter, in-as-much as A, B, C (and others) form one group, so that these can be utilized for discharge of their liabilities to third parties. In other words, A is equally liable for the liability of B, and so on. The liabilities, accordingly, only represent inter s....