TMI Blog2018 (12) TMI 1829X X X X Extracts X X X X X X X X Extracts X X X X ..... cision of the coordinate Bench and restrict the addition confirmed by the Ld. CIT (A) to 50% i.e. ₹ 3,00,000/-. Hence, this ground of appeal of the assessee is partly allowed. Levy of interest u/s 234A, 234B and 234C - Whether as the income assessed in the hands of the appellant was subjected to the provisions of TDS and hence on the said amount of tax no interest can be computed u/s 234B and 234C of the Act ? - HELD THAT:- Since, the coordinate Bench has set aside the identical issue to the file of the AO with the direction to re-compute the interest u/s 234B and 234C of the Act, in assessee s own cases for the earlier years, we respectfully following the decision of the coordinate Bench set aside this issue to the file of the AO to re-compute the interest liability after reducing the amount of tax deductible at source on the income earned. Direct the AO to bring to tax the correct interest income in the hands of the assessee and add the same in the income of the assessee. - ITA No. 2474/MUM/2015 - - - Dated:- 7-12-2018 - Shri R.C. Sharma (AM) And Shri Ram Lal Negi (JM) For the Assessee : Shri Dharmesh Shah (AR) For the Revenue : Shri P. Daniel (DR) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appeals ) has erred in law and in facts in confirming the estimated addition on account of personal household expenses amounting to ₹ 6,00,000/- 4. The Ld. Commissioner of Income Tax (Appeals) has erred in law and in facts in confirming the levy of interest u/s 234A, 234B and 234C of the Act. 5. The Ld. Commissioner of Income Tax (Appeals) has erred in law and in facts in not appreciating that the income assessed in the hands of the appellant was subjected to the provisions of TDS and hence on the said amount of tax no interest can be computed u/s 234B and 234C of the Act. 3. During pendency of the present appeal the assessee raised the following additional ground of appeal. The additional ground raised by the assessee reads as under:- Whether in facts and circumstances of the case, the Ld. Assessing Officer and Ld. CIT (A) ought to have adjudicated the issue of interest income. The correct amount of interest income ought to have been determined to arrive at the correct taxable income as per law. 4. The Ld. counsel for the assessee submitted that while determining the total income of the assessee, the authorities below have failed to consider the inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the decision of the coordinate Bench rendered in the assessee s own case for the A.Ys. 2003 to 2005, vide order dated 27.12.2017. The coordinate Bench of the Tribunal has decided the identical issue in favour of the assessee holding as under:- 67. Ground No. 3 relates to the claim of interest to the extent of ₹ 1,47,13,638/- after proportionate disallowance of ₹ 8,39,m99,631/- out of the interest income earned by the assessee on term deposit. Both the parties agreed that this issue has arisen in ITA No. 5799/Mum/2015 in the case of Shri Sudhir S. Mehta for A.Y. 2009-10 and therefore whatever view this Tribunal may take in that case same view may be taken in the case of the assessee. Since we allowed the deduction towards interest expenditure out of interest earned on term deposit in ITA No. 5799/Mum/2015 in the case of Shri Sudhi S. Mehta, we therefore respectfully following the said decision of this Tribunal direct the AO to allow deduction to the assessee in respect of interest expenditure out of interest earned on term deposit amounting to ₹ 1,47,13,638/- out of interest earned on term deposit with the similar directions. Thus, this ground taken by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e A.Y. 2006-07 and restricted the disallowance to ₹ 3,00,000/-. 11. On the other hand, the Ld. DR did not controvert the fact that the ITAT has restricted the addition made on account of personal household expenses to 50% of the total amount confirmed by the Ld. CIT (A). However, the Ld. DR relied on the order passed by the Ld. CIT (A). We notice that the coordinate Bench has restricted the addition confirmed by the Ld. CIT (A) on account of personal household expenses to 50% in the assessees own case for the A.Y. 2006-07. The relevant paras of the judgment read as under:- 18. Ground No. 2 Relates to sustenance of the addition on account of personal household expenses by the CIT(A) to the extent of ₹ 6,00,000/-. The facts relating to this issue are that the AO made an addition on estimate basis on account of the personal household expenses at ₹ 12,00,000/- by applying provisions of Section 69C. When the assessee went in appeal before the CIT(A), the CIT(A), following his own order in the case of other family members, viz. Smt. Deepika A. Mehta and Smt. Rasila S. Mehta for A.Y. 2006-07 reduced the disallowance by 50% thus sustaining the addition to the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... On the other hand, Ld. Special Counsel submitted that the appellant is maintaining motor car and live in posh area of Mumbai, and no details of household expenses has been given by the appellant. In such a case, addition sustained by the CIT(A) appears to be far more reasonable. 21: After considering the rival submissions and on perusal of the relevant finding in the impugned order, we find that the addition made by the AO as well as sustained by the CIT(A) are though on ad-hoc basis, but same was done because no details of expenditures was filed by the appellant. Before us, the Ld. Counsel has submitted that, most of the expenses have been incurred by Dr. Hitesh S. Mehta and other family members living in a Joint family set-up. Further other members have contributed for household expenses and that some of the additions have been confirmed on account of personal household expenses by the Department. On these facts and circumstances, we are inclined to scale down the additions to ₹ 3 lakhs. Accordingly, addition sustained on account of personal household expenses would be ₹ 3 lakhs. Accordingly, the ground No.5 of the appellant is partly allowed. Respectfully foll ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Similar issue has arisen in the case of assessee in A.Y. 2002-03. We, therefore respectfully following the order of this Tribunal in the preceding paragraph in the case of assessee confirm the levy of interest under Section 234A, 234B and 234C and dismiss ground No. 5 but direct the AO to recompute interest chargeable under Section 234A, 234B and 234C after excluding income which is subject to provisions of TDS. Thus ground No. 6 is statistically allowed. 20. Ground Nos. 3 4 relate to levy or interest under Section 234A, 234B and 234C as well as calculation of the said interest. We find that the said issue has been decided by the Coordinate Bench in the case of Eminent Holding P. Ltd. in ITA No. 2139/Mum/2013 for A.Y. 2002-03 in which this Tribunal while dealing with the said issue held as under: - 3.Next ground of appeal is about levy of interest u/s. 234 of the Act. Before us, AR stated that the assessee was a notified entity that the provisions of s. 234A, 234B and 234C of the Act were deemed to have complied with, that the assets were already in attachment of the Custodian appointed under the provisions of the Special Courts Act, that the Tribunal in the case of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, in assessee s own cases for the earlier years, we respectfully following the decision of the coordinate Bench set aside this issue to the file of the AO to re-compute the interest liability after reducing the amount of tax deductible at source on the income earned. 16. Vide additional ground of appeal, the assessee has challenged the orders passed by the authorities below contending that the authorities below ought to have adjudicated the issue of interest income of the assessee. The Ld. counsel pointed out that the authorities below have not adjudicated the issue of interest income while determining the taxable income of the assessee. The Ld. counsel further submitted that this issue has been dealt with by the ITAT in assessee s case for the earlier assessment years and directed the AO bring to tax the correct interest income in the hands of the assessee receivable from the family members and others. The Ld. DR did not controvert the aforesaid facts, however, relied on the orders passed by the authorities below. 17. We have perused the relevant material on record in the light of the submissions of the parties. As pointed out by the Ld. counsel for the assessee, the coor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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