TMI Blog2023 (10) TMI 911X X X X Extracts X X X X X X X X Extracts X X X X ..... this claim for the year under consideration, we direct the Assessing Officer to verify this fact and exclude the standard asset and restructured debt as part of provision for bad and doubtful debt and allow the claim of the assessee for deduction under section 36(1)(viia) as discussed above. Liability for interest u/s 234B - HELD HAT:- As it is matter of verification whether the refund granted to the assessee u/s 143(1) exceed the refund granted on regular assessment. Before us no details of refund claimed and allowed u/s 143 (1) of the Act and refund which was due and allowed under regular assessment / reassessment , has been provided. Therefore, no infirmity in the direction of CIT(A) issued for verification. We again direct the Ao to comply with the direction of ld CIT(A), if not already complied. Accordingly, the ground of appeal of the assessee is allowed for statistical purpose. Interest u/s 244A - On perusal provisions of section 244A of the Act, we observe that legislature has provided for computation of the interest for every month or part of the month comprised in the period. Therefore, the finding of the Ld. CIT(A) that interest u/s 244A was to be calculated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is no excess refund granted u/s 143(1). Your appellant craves leave to add, to amend, and/or vary the grounds of appeal before or at the time of hearing. 3. On the facts and in the circumstances of the case, the Ld CIT(A) erred in confirming the order of AO of not granting interest for the month of payment /refund of tax by, considering Rule 119A (a) instead of 119 (b) which is applicable to the instant case. Your appellant craves leave to add, to amend, and / or vary the grounds of appeal before or at the time of hearing. 3. This appeal by the assessee in ITA No. 1438/M/2023 for assessment year 2009-10 is arising from the order of the ld CIT(A) passed in relation to the order of the Assessing Officer dated 28/03/2019 giving effect to two orders, firstly, the order of the ld CIT(A) dated 26/12/2017, ( which was passed in relation to order u/s 147 dated 18/03/2015 of the Assessing Officer) and secondly, ITAT order in ITA No. 1827/Mum/2017 dated 3/10/2018. 4. The ground No. 1 of the appeal relates to deduction under section 36(1)(viia) of the Act in relation to claim for provision for bad and doubtful debt in the books of accounts of the assessee. The asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atute provided in the section itself in the original assessment proceedings has bearing on the issue of allowance u/s. 36(1)(viia) in the reopened assessment, the issue thus in a way became consequential and should go back to the Assessing Officer for fresh adjudication depending upon the decision taken by the Assessing Officer in the original assessment proceedings which were set aside by the Tribunal in ITA.No. 6922/Mum/2013 by order dated 17.12.2015. Thus, we restore this issue on merits i.e. allowability u/s. 36(1)(viia) of the Act in the reassessment proceedings to the file of the Assessing Officer to decide afresh in view of our above observations. This ground is allowed for statistical purpose 4.1.1 The Assessing Officer gave effect to the order of the Ld CIT(A) vide order dated 28/03/2019 and accordingly restricted the claim of 36(1)(viia) of the Act to the extent of Rs. 555,29,90,155/-. The assessee again preferred appeal against the said effect giving order before the Ld. CIT(A), which has been disposed by the Ld. CIT(A) vide DIN (document identification number) and order No. ITBA/NFAC/S/250/2022-23/1050973878(1) dated 23/03/2023, against which the appeal of the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellate authority is of the view that restriction of provision of doubtful debts to Rs. 555,29,90,155/- as provided in the books for non- performing assets does not require any interference and the order of the AO needs to be sustained. 4.1.3 The assessee preferred further appeal against the said order of the Ld. CIT(A), which has been listed before us at ITA No. 1438/Mum/2023, i.e. present appeal taken up by us for adjudication. 4.2 The learned counsel of the assessee before us referred to ground Nos. 1 and 1.1 of the appeal and submitted that the issue in dispute, whether the claim of deduction u/s 36(1)(viia) in respect of provision of the bad and doubtful debt should be restricted to the extent of provision made during the year under consideration or same should be allowed to the extent of provision available at the year end, has been already adjudicated by the Tribunal in order dated 20/06/2023 in ITA No. 923/Mum/2023, which has arisen from the order of the Assessing Officer dated 22/12/2017 giving effect to the order of the Tribunal in ITA No. 6922/M/2013 dated 17/12/2015. The relevant finding of the Tribunal(supra) is accordingly reproduced as under: 8. We heard ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l assets for the purpose of deduction u/s.36(1)(viia). Be that as may be, in the given case the Hon'ble Tribunal has given a direction to the Assessing Officer to consider the issue afresh in the light of the decision of Ahmadabad Bench of the Tribunal in the case of Sarvodaya Sahakari Bank Ltd (supra) whereby the Assessing Officer is required to look into the total provision towards bad and doubtful debts as per the books of accounts of the assessee irrespective whether the provision is made in the current year or previous year and allow the claim u/s.36(1)(viia) accordingly. However we notice that the Assessing Officer in the order giving effect has not discussed anything in this regard but has proceeded to restrict the claim based on a different ground. We notice that the revenue had not taken any action against the directions of the Tribunal as per the original order, and therefore the directions have crystallized which means that the Assessing Officer has no alternate course except to follow the directions. Accordingly, the Assessing Officer in the remand proceedings ought to have verified the availability of sufficiency of provisions as per the books of accounts of the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opened for the reason that the assessee claimed inclusion of standard asset and restructured debt as NPA for working out provision for bad and doubtful debt made in the year under consideration. Since now the assessee has forgone this claim for the year under consideration, we direct the Assessing Officer to verify this fact and exclude the standard asset and restructured debt as part of provision for bad and doubtful debt and allow the claim of the assessee for deduction under section 36(1)(viia) as discussed above. 4.5 The ground No. 1 Of the appeal of the assessee is allowed, whereas ground No. 1.1 of the appeal of the assessee is dismissed as not pressed. 5. As far as ground no 2 of the appeal is concerned, the grievance of the assessee is that it is not liable for interest u/s 234B of the Act whereas the Ld. CIT(A) has directed the Assessing Officer to verify the interest charged while giving effect to the appellate order and directed for necessary modification in accordance with the provision u/s 234B of the Act. 5.1 We have heard rival submission of the parties. The Section 234B of the Act prescribe that if amount refunded u/s 143(1) of the Act exceeds the amount re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... NPA and restricted the claim of deduction u/s 36(1)(viia) of the Act to the extent of Rs. 555,29,90,155/-. The Assessing officer in order date 28/03/2019, where he has given effect to order of ld CIT(A) dated 26/12/2017, taken amount of deduction at Rs. 555,29,90,155/-. In this effect giving order, the Assessing officer has not given any finding on the issue of claim u/s 36(1)(viia) except computing the tax liability post the order of ld CIT(A). Since the assessee had already filed appeal against the order of ld CIT(A) dated 26/12/2017 before the ITAT, so there was no justification for filing the appeal before the ld CIT(A) against effect giving order of passed by the Assessing Officer. This is infructuous exercise when The Tribunal in order dated 2/07/2019 in ITA No. 1803/Mum/2018 already adjudicated the grievance of the assessee against the order of CIT(A) dated 26/12/2017 and restored the matter back to the AO. 6.2. The Assessing officer passed an order consequential to the direction of ITAT dated 12/07/2019. Against that consequential order of AO, the assessee again preferred appeal before CIT(A) , but the CIT(A) vide his order dated 20/03/23 upheld the AO. The appeal prefer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hall be granted accordingly and therefore the Assessing Officer should have granted the interest for the month of payment/collection of tax/granting of refund also. The Ld. CIT(A) has reproduced provisions of section 244A and section 119A of the Act, and thereafter held that interest u/s 244A was to calculated on annual basis, therefore the Assessing Officer has correctly rounded off the interest to whole month and ignored the fraction of the month. The relevant part of the decision of the Ld. CIT(A) is reproduced as under: 5.3.3. Section 244A reads as under: Interest on refunds. 244A. (1) Where refund of any amount becomes due to the assessee under this Act, he shall, subject to the provisions of this section, be entitled to receive, in addition to the said amount, simple interest thereon calculated in the following manner, namely :- (a) where the refund is out of any tax collected at source under section 206C or paid by way of advance tax or treated as paid under section 199, during the financial year immediately preceding the assessment year, such interest shall be calculated at the rate of one-half per cent for every month or part of a month comprised in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act,- (a) where interest is to be calculated on annual basis, the period for which such interest is to be calculated shall be rounded off to a whole month or months and for this purpose any fraction of a month shall be ignored; and the period so rounded off shall be deemed to be the period in respect of which the interest is to be calculated; (b) where the interest is to be calculated for every month or part of a month comprised in a period, any fraction of a month shall be deemed to be a full month and the interest shall be so calculated; (c) the amount of tax, penalty or other sum in respect of which such interest is to be calculated shall be rounded off to the nearest multiple of one hundred rupees and for this purpose any fraction of one hundred rupees shall be ignored and the amount so rounded off shall be deemed to be the amount in respect of which the interest is to be calculated.] 5.3.4 As per Rule 119A(a), where interest is to be calculated on annual basis, the period for which such interest is to be calculated shall be rounded off to a whole month or months and for this purpose any fraction of a month shall be ignored; and the period so rounded ..... 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