TMI Blog2022 (12) TMI 638X X X X Extracts X X X X X X X X Extracts X X X X ..... note of these judgments and emphasised more on the issue of nexus which no longer survives after the verdict of the Hon ble Apex Court. We find merit in this contention of assessee and direct AO to reduce 90% of the net interest received from the net profit for the purpose of calculating deduction u/s 80HHC of the Act. In the result, Ground Nos. 1 2 of the assessee are allowed. Correctness of interest charged u/s 234B - Assumption of date of filing of return - assessee has contended that the regular assessment u/s 143(3) of the Act was completed on 29/12/2006 and, therefore, the cut-off date for charging the interest would be December, 2006, whereas the CIT(A) has confirmed the action of the AO charging the interest up to March, 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in Ground Nos. 6 7 to the ld. Assessing Officer for necessary verification. Thus, both these grounds are allowed for statistical purposes. - I.T.A. No. 247/Pat/2019 - - - Dated:- 12-12-2022 - Shri Rajpal Yadav, Hon ble Vice President And Shri Manish Borad, Hon ble Accountant Member For the Assessee : Shri A.K. Rastogi, Sr. Advocate And Shri Rakesh Kumar, Advocate For the Revenue : Shri Saumyajit Das Gupta, Sr. D/R ORDER PER MANISH BORAD, ACCOUNTANT MEMBER: The present appeal is directed at the instance of the assessee against the order of the Learned Commissioner of Income Tax (Appeals) - Patna, (hereinafter the ld. CIT(A) ) dt. 16/09/2019, passed u/s 250 of the Income Tax Act, 1961 ( the Act ) for the Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6. For that the Ld. CIT(A) has erred in confirming the charging of interest u/s 234B amounting to Rs.19,12,454/- charged in order u/s 143(3)/251/254/263/254 dated 23.12,2010 as against Rs.12,92, 191/- charged vide order u/s 143(3)/254/263 dated 21.12.2009 despite the fact that variation of total income in between the two orders is only Rs.45,393/-. 7. For that charging of interest at Rs.19,12,454/- as against Rs.12,92,191/- is wrong, illegal and unjustified on the facts of the appellant's case. 8. For that the order is bad in facts and law of the case and is fit to be modified. 9. For that other grounds, if any, shall urged at the time of hearing of appeal. 3. The first issue raised through Ground Nos. 1 2 rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he finding of the ld. CIT(A) holding that there is no direct nexus between the interest paid on security deposit and interest bearing assets and the ld. CIT(A) has also erred in not considering deduction of 90% of interest while working out deduction u/s 80HHC. We find that now it is a settled proposition as held by Hon ble Apex Court (supra) that 90% of net interest [interest paid (minus) interest received] has to be reduced for the purpose of calculation of deduction u/s 80HHC of the Act. The ld. CIT(A) failed to take note of these judgments and emphasised more on the issue of nexus which no longer survives after the verdict of the Hon ble Apex Court. We, therefore, respectfully following the judgment of the Hon ble Apex Court, find merit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of both the lower authorities. 11. We have heard the rival contentions and perused the material available on record. 12. The first issue for our consideration raised in Ground No. 3, 4 5 is that whether the interest is chargeable u/s 234B(3) or 234B(4) of the Act. For better understanding, we will go through the relevant sections:- [(3) Where, as a result of an order of reassessment or recomputation under section 147 or section 153A, the amount on which interest was payable in respect of shortfall in payment of advance tax for any financial year under sub-section (1) is increased, the assessee shall be liable to pay simple interest at the rate of one per cent for every month or part of a month comprised in the period commenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , in the instant case, the order of the ld. Assessing Officer is not framed u/s 147 or 153A of the Act. On the other hand, Section 234B(4) of the Act refers to the order u/s 154/155/250/254/260/262/263/264 of the Act and in the case of the assessee, the assessment order has been framed u/s 143(3)/251/254/263/254 of the Act. So, prima facie there remains no dispute to the fact that that in the case of the assessee interest should have been charged as per the provisions of Section 234B(4) of the Act i.e., up to December, 2006. We, therefore, fail to find any merit in the findings of the ld. CIT(A) and the same is reversed and Ground Nos. 3, 4 5, raised by the assessee are allowed. 14. Ground Nos. 6 7 of the instant appeal challenges th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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