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2007 (8) TMI 268 - MADHYA PRADESH HIGH COURTWhether, on the facts and in the circumstances of the case, the learned Income-tax Appellate Tribunal was justified in deleting the addition of ₹ 7,08,184 which had been rightly sustained by the Commissioner of Income-tax (Appeals) as benefit gained by the assessee within the meaning of section 28(iv) of the Income-tax Act, 1961? Whether, on the facts and circumstances of the case, the learned Income-tax Appellate Tribunal was justified in holding that while giving appeal effect, the Assessing Officer could not charged interest under section 220(2) from the due date of original assessment/demand notice? Held that:- On the materials available on record, the Tribunal came to the conclusion that the Assessing Officer was not justified in making the addition of ₹ 7,08,184 as income of the respondent on account of the interest payable or paid by M/s. Siddharth Soya Products Pvt. Ltd. The aforesaid conclusion of the Tribunal being a pure question of fact on the materials available before the Tribunal, no substantial question of law arose for decision. The first question formulated by the order dated February 28, 2007, is thus, not a question of law and cannot be raised in appeal under section 260A of the Act. The effect of the first proviso to sub-section (2) of section 220 of the Act is only that the amount on which interest is payable under sub-section (2) of section 220 will get reduced as per the appellate order. The first proviso to sub-section (2) of section 220 of the Act does not have any effect on the period for which the interest is payable under sub-section (2) of section 220 of the Act. The Tribunal, therefore, was not correct in coming to the conclusion that the Assessing Officer cannot demand interest from the date of original demand notice. The Assessing Officer, in our considered opinion, can demand interest from the date of original demand notice but not on the amount originally assessed but on the amount as reduced by the appellate order. The second question of law is answered accordingly in favour of the Department and the appeal is partly allowed.
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