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TMI Blog2016 (8) TMI 770X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions of Section 80HHC of the Income Tax Act, 1961 by excluding the hiring charges and operating charges from the profits of the business of the Company? (2) Whether on the facts, when total interest paid is more than the interest receipts and there is deficit in interest account as debited to profit and loss account, whether the Tribunal is right in law in confirming the taxation of interest receipts as income assessable under the Head Income from other sources? (3) Whether on the facts and on interpretation of Section 80HHC of the Act only the net amount of interest for the purpose of working out the deduction under Section 80HHC of the Act is to be considered for computation of the claim of the appellant company? (4) Whether on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rned counsel for both the sides and perused the documents on record. 4. Mr. R.K. Patel, learned counsel for the assessee, submitted that Question No.(1) raised in this appeal is already settled by the judgment of this Court in the case of CIT v. Nirma Ltd., [2012] 367 ITR 12. Learned Standing Counsel for the Revenue was not in a position to point out any distiguishing feature, which may warrant a different view. Consequently, Question No.(1) is answered in favour of the assessee and against the Revenue. 5. Insofar as Question Nos.(2) & (3) are concerned, learned counsel for the assessee submitted that the same are also settled by the judgment of Apex Court in the case of ACG Associates Capsules (P.) Ltd. v. CIT, CentralIV, Mumbai, [2012] ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oncerned, the same is already settled by the judgment of this Court in the case of CITII v. Gujarat State Financial Services Ltd., [2014] 49 taxmann.com 221 (Gujarat) wherein, the following observations have been made in Para5.6 of the said decision: "5.6 This very issue came up for scrutiny before the Bombay High Court in the case of Commissioner of Income-tax v. Indian Oil Corporation Ltd., reported in 2010 TAXMAN 466 and the Bombay High Court has held that addition of explanation (2) to section 234D of the Act by Finance Act, 2012, with retrospective effect from June 01, 2003, is made applicable even to the period under assessment year 2004-2005. In respect of excess refund granted to the assessee under section 143(1) of the Act, the in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment proceedings prior to 1/06/2003 on the one hand and post 1/06/2003 on the other. The classification is not on the basis of the date of grant of refund under section 143(1) of the Act. The classification on the basis of the completion of assessment proceedings is not a subject matter of challenge before us. Therefore, the date of grant of refund is immaterial to determine the applicability of section234D of the Act. In the circumstances the submission of the respondent that section 234D of the Act only applies to refunds granted prior to 1/06/2003 is not acceptable. (22) It must be borne in mind that refund which is granted under section 143(1) of the Act to an assessee is qua an assessment proceeding for a particular assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e would be subject to the provisions of section 234D of the Act. Under section 234D(1) where the refund under section 143(1) is in excess of the amounts refundable on regular assessment, interest on the excess amount would be payable. In any case after the introduction of Explanation 2 there can be no doubt that even where refund is granted prior to 1/06/2003 the same would carry interest provided the proceedings for assessment are completed after 1/06/2003. The respondent has not contended that the Explanation 2 to section 234D of the Act is not retrospective. Their only contention is that it would not apply to refunds granted prior to 1/06/2003 even in respect of assessments completed after the cutoff date of 1/06/2003. This submission ig ..... X X X X Extracts X X X X X X X X Extracts X X X X
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