2012 (4) TMI 689 - AT - Income Tax

Summary

Issues involved: Appeal against disallowance u/s 14A read with Rule 8D of IT Rules, 1962 and leviability of interest u/s 234B in respect of assessment u/s 115JB.

Disallowance u/s 14A:
The appeal was regarding disallowance made u/s 14A read with Rule 8D of IT Rules, 1962. The Assessing Officer disallowed an amount with reference to Rule 8D, which was upheld by the CIT (A). The appellant argued for a re-determination of the disallowance based on a decision of the Hon'ble Delhi High Court stating that Rule 8D has no retrospective effect and should not be applicable for the assessment year in question. The Tribunal agreed with the appellant, citing the decision of the Hon'ble Delhi High Court in the case of Maxopp Investment Limited vs. CIT, and directed the matter to be reconsidered by the Assessing Officer in light of this decision. The issue of disallowance u/s 14A was considered allowed for statistical purposes in the specified manner.

Leviability of interest u/s 234B:
The issue of interest u/s 234B in relation to assessment u/s 115JB was also raised. The appellant contended that interest under Section 234B should not be chargeable when subjected to Minimum Alternate Tax (MAT) u/s 115JB, citing a decision of the Hon'ble Supreme Court. However, the Tribunal referred to a different decision of the Hon'ble Supreme Court in the case of JCIT vs. Rolta India Ltd., which held that interest u/s 234B and 234C is payable for failure to pay advance tax in relation to tax payable u/s 115JA/115JB. Consequently, the Tribunal upheld the decision of the CIT (A) regarding the leviability of interest u/s 234B, but directed the Assessing Officer to re-compute the interest on the income after considering the Tribunal's order.

In conclusion, the appeal filed by the assessee was partly allowed for statistical purposes as per the directions provided in the judgment.