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2021 (9) TMI 279 - AT - Income TaxInterest u/s 234B and 234C charged for default in payment of advance tax - assessee has submitted certificate from the Punjab National Bank that the cheques issued by the assessee have been deposited and sent for clearing on the same date (i.e. before 15th) but were cleared after the due date (17 th and 18th) thus not liable to pay interest for default of payment of advance tax - HELD THAT:- A collecting banker acts as an agent of the customer if he credits the latter’s account with the amount of the cheque after the amount is actually realized from the drawee banker - As an agent of his customer, the collecting banker does not possess title to the cheque better than that of the customer. If the customer has no title thereto, or his title is defective, the collecting banker cannot have good title to the cheque. In case the cheque collected by him did not belong to his customer, he will be held liable for conversion of money, i.e., illegally interfering with the rights of true owner of the cheque. From the concurrent reading of the above, it can be said that the assessee is deemed to have paid the advance tax within the due date of payment. Hence, not liable to be charged any interest u/s 234B and 234C AO denied grant of interest u/s 244A on the grounds that the refund determined doesn’ t exceed 10% of the total tax payable - A.Y. 2007-08 - HELD THAT:- Since, the issue of interest u/ s 234B and 234C has been adjudicated in favour of the assessee, there would be upward revision of the interest receivable. The Assessing Officer is hereby directed to re- compute the interest payable and issue the same at the earliest as per Section 244A(1 )(a). AO has added back difference in income reported in AIR - AY 2009-10 - While checking the total interest during the period from AYs 2008-09 and 2009 -10, interest shown as income by the bank as a whole is much higher than the interest shown in the 26 AS and interest certificates. So the data provided in AIR is variable, hence the additions deserves to be deleted. The mismatch arose due to difference in the TDS deducted, the receipt of TDS certificate and the interest earned. The assessee has been continuously following the same system of accounting and found to be accounting for the interest rightly more than which has been reflected in the 26AS - the similar rate of tax for all the years, it is a revenue neutral exercise and no disallowance on account of mismatch is called for. Appeal of assessee allowed.
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