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2022 (12) TMI 638 - ITAT PATNADeduction u/s 80HHC - interest paid on security direct nexus with the interest received by the appellant - Whether CIT(A) has erred in not considering deduction of 90% of interest while working out deduction u/s 80HHC? - HELD THAT:- We find that now it is a settled proposition as held in the case of Vikas Kalra [2012 (2) TMI 99 - SUPREME COURT] as well as in the case of ACG Associated Capsules Pvt. Ltd [2012 (2) TMI 101 - SUPREME COURT] that 90% of net interest [interest paid (minus) interest received] has to be reduced for the purpose of calculation of deduction u/s 80HHC of the Act. CIT(A) failed to take note of these judgments and emphasised more on the issue of nexus which no longer survives after the verdict of the Hon’ble Apex Court. We find merit in this contention of assessee and direct AO to reduce 90% of the net interest received from the net profit for the purpose of calculating deduction u/s 80HHC of the Act. In the result, Ground Nos. 1 & 2 of the assessee are allowed. Correctness of interest charged u/s 234B - Assumption of date of filing of return - assessee has contended that the regular assessment u/s 143(3) of the Act was completed on 29/12/2006 and, therefore, the cut-off date for charging the interest would be December, 2006, whereas the CIT(A) has confirmed the action of the AO charging the interest up to March, 2007 - HELD THAT:- We find that the ld. CIT(A) has referred to Section 234B(3) of the Act, which relates to the order of re-assessment or re-computation u/s 147 or Section 153A of the Act. However, in the instant case, the order of the ld. Assessing Officer is not framed u/s 147 or 153A of the Act. On the other hand, Section 234B(4) of the Act refers to the order u/s 154/155/250/254/260/262/263/264 of the Act and in the case of the assessee, the assessment order has been framed u/s 143(3)/251/254/263/254 of the Act. So, prima facie there remains no dispute to the fact that that in the case of the assessee interest should have been charged as per the provisions of Section 234B(4) of the Act i.e., up to December, 2006. We, therefore, fail to find any merit in the findings of the ld. CIT(A) and the same is reversed and Ground Nos. 3, 4 & 5, raised by the assessee are allowed. Calculation of interest u/s 234B - Contention made by the ld. Counsel for the assessee has substantial merit because in the assessment order framed on 21/12/2009, interest u/s 234B of the Act has been charged at Rs.12,92,191/- where as in the order dt. 23/12/2010, interest of Rs.19,12,454/- has been charged So far as the difference in the total income assessed is concerned, there is only an increase of Rs.45,393/-, in the order dt. 23/12/2010 as against the order dt. 21/12/2009. There is apparently a calculation error/mistake which needs necessary rectification. Therefore, we restore the issues raised in Ground Nos. 6 & 7 to the ld. Assessing Officer for necessary verification. Thus, both these grounds are allowed for statistical purposes.
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