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2019 (8) TMI 513 - HC - Income TaxWaiver of interest u/s 234C - scheme of demerger - whether accruing of income of demerged company cannot be stated to be either anticipated or under contemplation - discharge of tax liability on the profit by predecessor company and successor in return of income, claimed credit thereof, Commissioner rejecting the application for waiver of interest - HELD THAT:- Obviously, since it was Grasim Industries and Samruddhi Cement Ltd. who had applied to the High Court for approval of the demerger scheme, the scheme was under contemplation and, therefore, approval anticipated. This does not mean that approval by the High Court was a certainty. Till the approval was granted, Samruddhi Cement Ltd. could not have anticipated or contemplated flowing of the income in its coffers. We may recall, Grasim Industries continued to discharge the tax liability on the profit of the cement business even after 1.10.2009. Consequently, Grasim had paid advance tax of ₹ 184 crores. On account of demerger, Grasim never claimed benefit of such advance tax, instead, Samruddhi Cement Ltd. in return of income, claimed credit thereof, which was also recognised by the Assessing Officer. Second ground pressed in service by the Commissioner is wholly untenable. The relevant parties, namely, Grasim Industries and Samruddhi Cement Ltd. as well as the Assessing Officer treated the advance tax installments paid by Grasim Industries as deemed to have been paid by Samruddhi Cement Ltd. The Commissioner, therefore, was in error in pressing in service this clause of the Circular. Under the circumstances, we find that the Commissioner committed a serious error in rejecting the application for waiver of interest. The impugned order dated 30.11.2018 is, therefore, quashed. It is directed that the respondents shall waive interest payable u/s 234C of the Act in terms of CBDT Circular dated 26.6.2006 for the period in question. Consequently, if such interest is already recovered, the same would become refundable.
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