2012 (1) TMI 393

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....ess in the field of investment and finance activities. It had filed its return of income declaring total income of Rs. 13,81,841/-. The assessment was completed under provisions of section 115JB determining book profit at Rs. 3,59,39,07,446/-, inter alia, after making addition of Rs. 72,02,91,091/- in respect of diminution in value of investment. The Assessing Officer levied interest amounting to Rs. 91,17,582/- under section 234C. The assessee preferred appeal before ld. CIT(Appeals) and ld. CIT(Appeals) dismissed the assessee's appeal relying on the Explanation to section 234C(i) of the Income Tax Act amended w.e.f. 1st April, 2007 (by Finance Act, 2006) observing that the said explanation clarifies that interest under section 234C is....

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.... (1) of section 234C of the Act". The assessee has relied on the following decisions :-  (i) National Thermal Power Co. Ltd. -vs.- CIT (229 ITR 383 (SC);  (ii) Jute Corporation of India Ltd. (187 ITR 688) (SC);  (iii) Ahmedabad Electricity Co. Ltd. (199 ITR 351)(Bom.)(FB). 3. Having heard both the sides, we find that the additional ground of appeal raised by the ld. counsel for the assessee is purely legal in nature and no fresh scrutiny of facts is required. Therefore, following the decision in the case of N.T.P.C. (supra), we admit the additional ground of appeal. 4. Ld. senior counsel for the assessee, Shri R.N. Bajoria submitted that while computing book profit, diminution in value of i....

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....t provisions of the Income Tax Act, 1961, the provisions of sections 234B and 234C are attracted in a case where there was no liability to pay any advance tax under section 208 on any of the due dates for payment of the advance tax instalments and there is retrospective amendment of the law long after the close of the financial year imposing liability for tax? 4.1. Ld. senior counsel submitted that while question no. (a) was answered against the assessee in view of the decision of the Hon'ble Supreme Court in the case of Joint CIT -vs.- Rolta India Ltd. reported in [2011] 330 ITR 470 (SC), but so far as question no. (b) was concerned, it was decided in favour of assessee by, inter alia, observing at para 11 as under :- &nbsp....

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....provisions of section 115JB. However, whether there was any liability for interest under section 234C or not will depend upon the position of law in regard to a particular issue as prevailing on date of filing of return. Explanation 1 to section 115JB deals with adjustment required to be made while computing book profit. Clause (a) to (i) of the said Explanation explains various items, which have to be added to the profit as shown in the Profit & Loss A/c. Clause (i) of the said Explanation was substituted by the Finance (No. 2) Act, 2009 with retrospective effect from 1st April, 2001 and accordingly, the profit as shown in the Profit & Loss A/c. was to be increased by the amount or amounts set aside as provision for diminution in the value....