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2015 (11) TMI 112 - ITAT MUMBAI

2015 (11) TMI 112 - ITAT MUMBAI - TMI - Eligibility for interest on refund - Held that:- AS decided in Vaibhavi Discretionary case [2015 (4) TMI 3 - ITAT MUMBAI] no substance in the argument of the Revenue that the delay in the refund was caused because of the conduct of the assessees. In fact, the assessee was questioning the proposition of the Revenue to assess the income in the hands of the Main Trusts. That is why the beneficiary trusts have filed their individual returns of income disclosin .....

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re, Assessing Officer is directed to pay interest on refund of ₹ 40,442/- till 29.02.1988 and interest on refund of ₹ 11,138/- till 28.11.2000 as prayed. - Decided in favour of assessee. - ITA. No. 6277, 6282, 6286, 6288, 6287, 6289, 6290, 6294, 6295, 6300, 6301, 6302, 6303, 6328, 6330/Mum/2013, - Dated:- 29-9-2015 - SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI ASHWANI TANEJA, ACCOUNTANT MEMBER For The Assessee : Shri Rajendra D. Shah, A.R. For The Revenue : Shri Jeetendra K .....

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of the Appellant's case, the learned CIT(A) has grossly erred in the points of law and facts. 2) In law and in facts and circumstances of the Appellant's case, the learned CIT(A) has grossly erred in holding that appellant is not entitled to interest on refund of ₹ 40,442/-. 3) In law and in facts and circumstances of the Appellant's case, the learned CIT(A) has grossly erred in holding that appellant is not eligible for interest on refund of ₹ 1l,138/-. 4) In law and in .....

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ds to entitlement to interest on refund of ₹ 40,442/-. Assessee filed its return of income for A.Y. 1984-85 with concerned Income Tax Officer, Mumbai showing total income of ₹ 1,10,290/- and paid taxes thereon of ₹ 51,580/-. 4.1 Assessee was assessed to income of ₹ 1,10,290/- by Income Tax Officer vide his order dated 27.02.1987. The said income was assessed to tax on protective basis as the same was assessed to tax on substantive basis in case of main Trust, i.e. K. Kach .....

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.11.2000. Thus total income in case of this assessee was computed at nil as per above order dated 28.11.2000. 4.3 Assessing Officer allowed refund thereon as per following details: Total taxes paid Rs.51,580/- Less: Refunded vide order dt.29/2/88 Rs.40,442/- Bal. refund due Rs.11,138/- Assessing Officer allowed refund of ₹ 11,138/- as per above calculation. 4.4 Subsequently, assessee submitted rectification application u/s.154 of the Act dated 07/12/2000 seeking following refunds; 1) Refun .....

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en and it was for the reason that assessee had filed rectification application. 4.5 Assessing Officer passed order u/s.154 dated 05.12.2012 rejecting the rectification application of assessee. Thus, Assessing Officer disallowed the claim of interest of assessee with following observations on page 2 of its order: "Regarding the contention of the assessee that interest u/s.214/244A of the I.T. Act should be allowed on the refund amount, it may be observed that the refund has arisen on account .....

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at arose. It would amount to double jeopardy for the Income Tax Department." "Further, it may be observed that no claim for the said refund was made in the return of Income filed. The claim for refund was made only after the KVSS declaration in the case of the main trust was filed and accepted. The decision to opt for the KVSS was taken by the assessee and any fall out thereof cannot be attributed to the department. As the refund has been arisen consequential to the KVSS declaration fi .....

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ficer held in his order u/s.154 of the income Tax Act dated 28.11.2000, determined the refund of ₹ 51,580/- due to assessee. However, refund of ₹ 11,138/- was only allowed to assessee after adjustment of ₹ 40,442/- alleged to has been refunded vide order dated 29.02.1988. However, no proof of such payment or adjustment has been provided to the assessee. Hence, Assessing Officer be required to provide proof of such payment or adjustment of ₹ 40,442/- to assessee or in alte .....

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hat refund had not been received and that Assessing Officer was required to make payment on account of refund computed by him. In view of above, CIT(A) dismissed the appeal on technical point. 4.7 Before us, learned Authorized Representative submitted that under facts and circumstances, CIT(A) grossly erred that assessee is not entitled to interest on refund of ₹ 40,442/- and eligibility for interest on refund of ₹ 11,138/- as raised by ground no.2 & 3 before us. He pointed out t .....

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merits of the issue as well as on the validity or otherwise of section 263 of the Act which was invoked by the CIT to deny these assesses benefit of interest which was already granted by the AO. Special Bench has decided this issue in favour of the assessee and relevant observation of Special Bench have already been reproduced above. 7.1 The Revenue challenged the aforementioned order of Special Bench before Hon'ble Gujarat High Court and Gujarat High Court has not only upheld the decision o .....

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e facts of the present cases and those which were decided by the Special Bench and Hon'ble Gujarat High Court are pari-materia and this fact was not disputed by the Revenue. The AO has adopted a view which is contrary to the decision of Special Bench and the decision of the Hon'ble Gujarat High Court and as he has again made the disallowance by rejecting the rectification application of the assessee. Thus, the conduct of the AO is against the decision rendered by Special Bench. Similarly .....

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