TMI Blog2010 (8) TMI 760X X X X Extracts X X X X X X X X Extracts X X X X ..... either unfounded or the same are not susceptible of giving rise to any adverse conclusion. 2. That the Hon ble CIT(A) has grossly erred in confirming the charging of penal interests on the basis of conjectures, surmises and without any reason. The charging of interest merits deletion. 3. That the action of Hon ble CIT(A) in confirming the charging of penal interest is unwarranted, arbitrary and has been confirmed without appreciating the facts of the case. The charging of interest be deleted." 3. The ground No. 1 raised by the assessee being general, is dismissed. 4. The issue raised in ground Nos. 2 and 3 is against the charging of interest under sections 234B and 234C of the Act. 5. The brief facts relating to the issue ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted the Assessing Officer to verify the FOB value without insurance and trading and recompute the deduction under section 80HHC of the Act as per the amended provisions of the Act. 6. The Assessing Officer while completing the assessment had directed the charging of interest under sections 234B and 234C of the Act. Before the learned CIT(A) the grievance of the assessee was that no interest was chargeable under sections 234B and 234C of the Act as there was no obligation on the part of the assessee to pay any advance tax in the absence of any taxable income. The income is taxed on the basis of decision of Hon ble Apex Court and amendments in Taxation Laws (Amendment) Act, 2005. The plea of the assessee in this regard was that provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome in response to the said notice on 21-8-2001. Thereafter, .-pursuant to the ratio laid down by Hon ble Bombay High Court in IPCA Laboratories Ltd. s case ( supra ), which was rendered on 2-7-20101 IT the deduction allowable under section 80HHC of the Act underwent change. The said judgment was confirmed by the Hon ble Supreme Court in the case of IPCA Laboratory Ltd. v. CIT [2004] 266 ITR 521 vide judgment dated 11-3-2004. Further the deduction allowable, under section 80HHC of the Act was amended by the Taxation Laws (Amendment) Act, 2005, which provided negative profit of the business are to be adjusted against the incentives in order to compute the profit eligible for the deduction. The said proposition was contrary to the ear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... avour of the assessee. The negative profits earned from trading were ignored for set off against the export incentives and the deduction under section 80HHC of the Act was computed. Consequently, the estimated income in the hands of the assessee was nil and even the return of income was filed at nil in view of claim of deduction under section 80HHC of the Act. The Hon ble Bombay High Court in IPCA Laboratories Ltd. s case ( supra ) laid down the propositions for grant of deduction under section 80HHC of the Act, The Assessing Officer following the ratio laid down in IPCA Laboratories ( supra ) recomputed the deduction under section 80HHC of the Act. The CIT(A) in the second round of appellate proceedings noted that there was amendment t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... advance tax had nil estimated income, there is no liability to deposit any advance tax. Consequently, no default can be attributed to the assessee for non-deposit of advance tax while estimating its income. In case of default in payment of advance tax, interest is chargeable under sections 234B and 234C of the Act. Accordingly, we hold that no interest is chargeable under sections 234B and 234C of the Act. We find support from the ratio laid down by Hon ble Punjab Haryana High Court in the case of Haryana State Co operative Suoolu Marketing Federation Ltd. ( supra ) where it has been held that no interest under section 234B is chargeable, if the assessee is not liable to pay advance tax. 10. The Hon ble Uttaranchal High Court in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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