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2018 (3) TMI 962 - KERALA HIGH COURTComputation of interest u/s 234B & 234C - interest liability of the assessee u/s 234B(3) - demand on reassessment - claim of interest from the date of payment of tax under Section 140A - Held that:- Admittedly, there was a demand raised as per the re-assessment. The flaw committed by the Tribunal was insofar as assuming that the tax paid under Section 140A remained with the Department. Even before the regular assessment, the same was returned with interest on 27.3.1998. Hence, the Department did not have any benefit of the amounts and whatever was paid under Section 140A stood refunded with interest to the assessee. The tax paid by the assessee under Section 140A also did not include any interest. Hence, there was no question of applying sub-Section (2) of Section 234B. On re-assessment after the re-computation of the total income, the tax demand was raised after giving credit of tax paid under Section 140A and also adding on the refund with interest. There again was a demand raised after adjustments. As we have noticed, there is definite increase of tax liability from the regular assessment at the time of re-assessment. There is no dispute that the advance tax payable at 90% of the liability to tax, had not been satisfied. The interest payable under sub-Section (1) of Section 234B was levied in the regular assessment. On re-assessment, the liability for advance tax also stood increased and in that circumstances, the differential tax on reassessment had to be levied interest at the rate provided under sub-Section (3) of Section 234B. Set aside the order of the Tribunal and restore that of the Assessing Officer under Section 154 as confirmed in first appeal. - Decided in favour of the Revenue and against the assessee.
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