Contact us   Feedback   Subscription   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2016 (1) TMI 900 - ITAT CHENNAI

2016 (1) TMI 900 - ITAT CHENNAI - TMI - Charging of interest u/s.234D - Held that:- This issue is now settled that when no refund has been granted to the assessee vide intimation u/s.143(1) of the Act, there cannot be levy of interest u/s.234D of the Act. This view is fortified by the Jurisdictional High Court in the case of CIT v. Ramco Industries Ltd. [2009 (12) TMI 54 - MADRAS HIGH COURT ]. It is also to be noted that the Assessing Officer vide letter dated 12.4.2012 to the Senior Authorized .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

consideration before this Tribunal in assessee's own case for the assessment year 200-01 wherein held that once lease rights for industrial lands are obtained for 30 to 99 years, then normally assessee is owner of such lands, particularly because there is always a renewal clause in such lease deeds. pex Court also in the case of Aditya Minerals Pvt. Ltd. [1999 (9) TMI 2 - SUPREME Court] held that where lease deed allowing use of land even for excavation purposes and where rent was deposited in .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of interest on additional excise duty(AED) u/s.43B - Held that:- in the present case, the principal amount of AED is not a decretal amount. The Finance Act, 2005, prescribed the procedure to be followed for the recovery of the AED credit availed by the assessee and interest payable thereon. The Finance Act required the amount to be paid back to the government, which could be paid back in instalments with interest at the rate of 13% per annum. Therefore, the interest payable on AED is part of th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

assessee - Held that:- Sec.145 deals with the method of accounting. It has been radically recast with effect from 1.4.1997, so as to permit only cash or mercantile system of accounting. Further, the Supreme Court in Nalinikant Ambalal Mody v. S.A.I. Narayan Row. CIT [1966 (5) TMI 13 - SUPREME Court] has held that sec.145 is mandatory. In view of the clear statutory provision and ratio of the Supreme Court, it may be stated that the assessee can follow only one of the methods of accounting i.e. c .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

wance u/s 14A - Held that:- The assessment year involved in this appeal is 2002-03 and there is no Rule 8D of the I.T. Rules at this relevant time. Rule 8D was inserted with effect from 24.3.2008 and Rule 8D has no application this assessment year. It is prospective in nature. Thus we direct the AO to disallow 2% of the total income. - Decided partly in favour of assessee - ITA No. 1676/Mds/2010, ITA Nos. 1376 & 1377/Mds/2010 - Dated:- 6-11-2015 - Chandra Poojari, AM And Duvvuru RL Reddy, JM For .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Revenue's appeal were already adjudicated by this Tribunal in its order dated 11.3.2011. 3. The facts of the case are that the assessee has contested charging of interest u/s.234D of the Act in the reassessment order dated 23.12.2009. In determining the tax payable in his order dated 23.12.2009, the Assessing Officer charged interest u/s.234D for refunds granted earlier in revisions for giving effect to appellate order etc. The assessee submitted that such interest can be charged only if the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

-tax(Appeals), further observed that in the case of ITO v. Ekta Promoters Pvt. Ltd.(113 ITD 719)[Del]{SB} , wherein it was held that provisions of sec.234D of the Act, which have been brought on statute from 1.6.2003, will have application only with effect from A.Y. 2004-05 and, therefore, interest u/s.234D cannot be charged for earlier years even though regular assessment for those years were framed after 1.6.2003 or refund was granted for those years after said date. Further, the Commissioner .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

1 by observing as follows: "6. After hearing both sides, we are in agreement with the ld. CIT(A) because the provision of section 234D was introduced from 1.6.2003 and to have effect from assessment year 2004-05. Hence, interest u/s 234D cannot be charged for earlier years even though the assessments of those years were framed after 1.4.2003 and refund was granted after the said date. This issue stands covered in favour of the assessee by the decision of the ITAT, Delhi in the case of ITO v .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d made and directed the Tribunal to decide the issue afresh vide order dated 9.4.2012 in TC(Appeal) No. 319 of 2011. 7. Before the Tribunal, the assessee has filed a Miscellaneous Petition in MP No.200/Mds/2011 and vide order dated 31.1.2012, it was observed vide para 4 as under: "4. After getting this order of the ld. CIT(A), the assessee has not raised any issue in appeal before the Tribunal and has accepted what has been decide and the reasons for that decision. Meaning thereby, the find .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

but we are unable to state as to whether refund u/s 143(1) of the Act was granted or not granted during this year to the assessee. The assessee had not clearly brought the facts of this issue either before the ld. CIT(A) or before the Tribunal. The only averment was regarding chargeability of interest in the light of the abovementioned Hon'ble Madras High Court's decision. In the assessment order, the date of processing of return u/s 143(1) of the Act has not been mentioned and the asse .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

cision remained to be considered, we recall the order in question for the limited purpose of deciding this issue, and direct the Registry to fix the appeal for hearing in due course." In view of this, the case has come for hearing before us. 8. After hearing both the parties, we are of the opinion that this issue is now settled that when no refund has been granted to the assessee vide intimation u/s.143(1) of the Act, there cannot be levy of interest u/s.234D of the Act. This view is fortif .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

opinion, there is no question of levy of interest u/s.234D of the Act. Accordingly, this ground of appeal is dismissed. 9. In the result, the appeal of the Revenue is partly allowed. 10. Now, we take up the assessee's appeal. The first issue in assessee's appeal in ITA No.1376/Mds/2010 is that the Commissioner of Income-tax(Appeals) erred in confirming the disallowance of amortization of lease charges paid in respect of leasehold land taken on lease by the assessee and used in its busin .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

l lands are obtained for 30 to 99 years, then normally assessee is owner of such lands, particularly because there is always a renewal clause in such lease deeds. In any case the Kolkatta Bench of the Tribunal has already held in Yagyawati Jayaswal Family Trust v. ITO 89 ITD 199 that wherever lease period is for more than 12 years, the assessee would be deemed to be the owner of such property for the purpose of the Act. The Hon'ble Apex Court also in the case of Aditya Minerals Pvt. Ltd. 239 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

peal is that the Commissioner of Income-tax(Appeals) erred in confirming the disallowance of additional depreciation in respect of additions to plant and machinery in the previous assessment year (2005-06). 13. The ld. AR submitted that sub clause (iia) of sec.32(1) before its amendment by the Finance Act, 2005, allowed an assessee in respect of an existing industrial undertaking to claim 15% additional depreciation if achieves substantial expansion by way of increase in installed capacity by 10 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

14 dated 26.9.2014, wherein it was held as under: "14. We have heard both sides, perused the materials on record and gone through the orders of authorities below. The only issue for our consideration is when the assessee has used plant and machinery less than 180 days whether it will be eligible to carry forward the remaining balance of additional depreciation to next year or not. Section 32(1)(iia) of the Act provides for additional depreciation @ 20% in the case of new machinery and plant .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e to carry forward and extend the benefit of additional depreciation to next year. In this context, the Coordinate Bench of the Tribunal in the case of CRI Pumps (P) Ltd. v. ACIT in I.T.A. No. 1824/Mds/2010 for the assessment year 2007-08 vide order dated 04.04.2013 [where the Judicial Member was party of the Bench], by following the decision of the Coordinate Bench of the Tribunal, has held that additional depreciation is eligible in the year in which assets were put to use and not for any succ .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

lated under the provisos to section 32(1)(iia) of the Act, the Assessing Authority ought not to have restricted the depreciation permissible under the said section by resorting to the second proviso to section 32(1) of the Act. The learned counsel however fairly pointed out before us that in the second proviso to section 32(1) of the Act, that very clause (iia) itself was inserted by Finance Act, 2002 with effect from 01.04.2003. Therefore, it was imperative that on and after 01.04.2003, the cla .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

re, do not find any scope to entertain the said question of law." 15. In the present case the assessee used new plant and machinery below 180 days and therefore, additional depreciation shall be allowed only 50%. We find that the above decision of the Hon'ble Jurisdictional High Court is squarely applies to the case and by following the decision, we reverse the order passed by the ld. CIT(Appeals) and confirm the order of the Assessing Officer. Accordingly, this ground of appeal raised .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

f filing of return would have to be disallowed. The AO, therefore, disallowed ₹ 3.11 crores, being the interest unpaid as on 31.10.2006. The AO relied on the decision of Rajasthan High Court in the case of Shree Pipes v. DCIT (289 ITR 154)in support of his action. Against this, the assessee went in appeal before the CIT(Appeals), who confirmed the finding of the AO. Aggrieved, the assessee is in appeal before us. 18. The ld. AR submitted that this payment is not covered u/s.43B of the Act .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ay Cement Co. Ltd. v. CIT (289 ITR 250) and in the case of Shree Pipes v. DCIT (289 ITR 154). 20. We have heard both the parties and perused the material on record. The claim of the assessee is that the interest paid on AED cannot be covered u/s.43B and the provisions of sec.43B is applicable only in respect of tax, duty, cess, fee etc. It does not apply to any interest chargeable or payable on such tax, duty, cess, fee etc. In our opinion, the case laws relied on by the assessee's counsel a .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ble and provisions of sec.43B are applicable. Being so, the argument of the ld. AR that interest payable on AED is only compensatory in nature and does not fall within the purview of sec.43B cannot be upheld. Hence, the judgment relied on by the CIT(A) in the case of Shree Pipes v. DCIT (289 ITR 154)is squarely applicable to the facts of the present case, wherein it was held that "interest accrued on delayed payment of tax which is otherwise allowable as deduction under the provisions of th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

itted that the assessee accounts for refunds from government departments only on receipt. Sales tax refunds allowed in sales-tax assessments are accounted in this manner. According to the ld. AR, that this has been consistently followed by the assessee company in all the years and this practice has been accepted by the revenue in the past years while completing the income-tax assessments. Further, the ld. AR submitted that it is not a case where the assessee disputes the amount refundable, but a .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

efore, the ld. AR submitted that the sales-tax refunds are taken into account only when they are received and offered to tax. This has been the consistent practice adopted by the company in all the years and has been accepted by the Department and the claim of the assessee may be accepted. 23. On the other hand, the ld. DR relied on the orders of the lower authorities. 24. We have heard both the sides and perused the material on record. The AO has included the sales-tax refund of ₹ 29,39,0 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

y provision and ratio of the Supreme Court, it may be stated that the assessee can follow only one of the methods of accounting i.e. cash or mercantile system of accounting. Since the assessee is following mercantile system, the disallowance made by the AO is in order. Therefore, no interference is called for on the action of the AO. The other plea of the assessee that it is consistently following the above practice and the same has been accepted by the Department will also not come to its rescu .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version