TMI Blog2014 (2) TMI 38X X X X Extracts X X X X X X X X Extracts X X X X ..... uction u/s. 24(b) for the relevant years, to which it is entitled in law. The interest on the borrowed capital utilized for, construction for the preconstruction period is to be allowed in five equal installments beginning the year of the completion of construction – thus, the interest is allowable @ 1/5th as per the clear mandate of law - The assessee's claim for A.Y. 2006-07 in its respect is thus not maintainable in law – the matter has not been properly discussed - the disallowance of this interest is subject to the necessary confirmation by the AO while giving effect to this order – Decided partly in favour of Assessee. - I.T.A. Nos.1153 & 1154/Mum/2012 - - - Dated:- 16-8-2013 - Shri D. Manmohan, VP And Shri Sanjay Arora, AM,JJ. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the following five years, being A.Ys. 2002-03 to 2006-07. That in fact is the admitted position, as would be evident from the assessment orders for AY 1999-2000 2000-01, with the order of the tribunal also having not been challenged. So, however, even as he computes the assessed income in terms of his own direction for A.Y. 1999-2000 and 2000-01, as well as that by the tribunal for A.Y. 2001-02, the AO in effect withdraws the same by insisting on assessing the income at the returned income. There is no mandate in law for the same, further placing reliance on the decision in the case of Gujarat Gas Co. Ltd. vs. Jt. CIT [2000] 245 ITR 84 (Guj). 2.2 The ld. DR, on the other hand, would rely on the orders by the authorities below. 3. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion in the case of CIT vs. Shelly Products 2003] 261 ITR 367 (SC) would also not apply inasmuch as it is only under the circumstances where the income could not be assessed, in view of the assessment being set aside or cancelled, etc., that it stood held by the hon'ble apex court that the income in such a case could not be assessed at an amount lower than that returned and, consequently, the assessee would not be entitled to a refund of the amount paid as advance-tax/self assessment tax. In the instant case, on the other hand, the income as assessed is undisputedly in terms of and in accordance with the law and, therefore, there is no basis for restricting the income to that returned; the assessee having claimed the entire interest for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said previous year and for each of the four immediately succeeding previous years." [emphasis ours] The interest on the borrowed capital utilized for, among others, construction, for the preconstruction period is to be allowed in five equal installments beginning the year of the completion of construction, i.e., in that year and the following four assessment years. The construction qua the second limb of the interest, as found by the tribunal vide its order for A.Y. 2001-02 (supra) stands completed during the previous year relating to A.Y. 2001-02 (per para 9 of its order). Accordingly, the interest is allowable @ 1/5th from A.Y. 2001-02 to A.Y. 2005-06 as per the clear mandate of law. The assessee's claim for A.Y. 2006-07 in its respec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at is relevant and is to be applied, and not the view that the parties may take of their rights in the matter (refer: Kedarnath Jute Mfg. Co. Ltd. v. CIT [1971] 82 ITR 363 (SC); CIT v. C. Parakh Co. (India) Ltd. [1956] 29 ITR 661 (SC)). Again, we are also conscious of the tribunal having mentioned the years of allowance of interest (for Rs.1,23,625/-) as from AYs 2002-03 to 2006-07. The matter with regard to the years for which the interest for the preconstruction period is to be allowed u/s. 24(b), given the finding/acceptance of fact of the completion of the relevant construction during the previous year relevant to AY 2001-02 by the tribunal, which has attained finality on it being not challenged, is purely a legal matter, with the law ..... X X X X Extracts X X X X X X X X Extracts X X X X
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