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2014 (5) TMI 356 - AT - Income TaxValidity of reopening of assessment – Income escapement - Held that:- The reasons recorded by the AO clearly manifest that the income chargeable to tax has escaped assessment by the reason on failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment - the assessment has been reopened after expiry of four years however the benefit of the proviso to section 147 is not available to the assessee in view of the fact that there is a complete failure on the part of the assessee to disclose the primary fact of receipt of this amount in the return of income and further no explanation in the return of income as to why this amount has not been offered to tax. When the assessee has failed to disclose the interest amount received u/s 244A in the return of income and even during the assessment proceedings then this conduct of the assessee clearly falls under the category of the cases where the income chargeable to tax has escaped assessment by the reason of failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment in terms of section 147 of the income Tax Act - The mere fact that the amount was received from income tax department does not obliterate the requirement and duty cast on the assessee to disclose all facts relevant to the assessment - the benefit of the proviso to section 147 is not available to the assessee in the case – there was no error or illegality in the orders for the issue of validity of reopening of assessment. Assessment of the interest received u/s 244A of the Act – Held that:-Section 244A(1) clearly reveals that as soon as any refund becomes due under any provisions of the Act, the assessee becomes entitled to receive the interest in respect of such refund calculated in the manner provided in clauses (a) and (b) of such provisions - the moment the refund is granted, as enforceable debt is created in favour of assessee in respect of interest due on such refund - income can be said to accrue on the date of refund itself - when interest is actually granted along with the refund, the requirement of sections 4 and 5 of the Act are fully satisfied and the same can be taxed in the year of receipt – Decided against Assessee. Netting of interest received u/s 244A of the Act - Amount of interest paid by the assessee – Held that:- Interest paid under Income Tax Act falls under the category of income tax and it is not an allowable deduction - the interest received on refund of tax is an income assessable under the head “income from other sources” – Following DCIT Vs. Sandvik Asia Ltd.[2011 (6) TMI 563 - ITAT, Pune] - the assessee's real income would not have diminished to the extent of the interest paid to the bank from which he took a loan – Decided against Revenue.
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