TMI Blog2019 (11) TMI 86X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the assessee for the aforesaid interest due to the assessee. Thus, grounds raised by the assessee in this appeal are allowed. Claim of loss on diminution in value of fertilizer bonds - assessee pointed out that the claim made by the assessee was withdrawn by an order passed u/s 154 HELD THAT:- The bonds which were held under the head current investments assets, within the diminution value of the bonds was in the nature of revenue loss and could be claimed by the assessee . Since the bonds was held in stock in trade, the same could be valued at market value or cost, whichever was less. Following the said decision of the Hon ble High Court in assessee s own case [ 2015 (12) TMI 1769 - DELHI HIGH COURT] we hold that the assessee is entitled to claim the loss for the diminution in value of fertilizer bonds, since the bonds were held in stock in trade and the same had to be valued either on market rate or cost, whichever was less. Thus, grounds of appeal raised by the assessee in this appeal are allowed. - ITA Nos. 5221 And 5222/Del/2016 - - - Dated:- 30-10-2019 - Ms. Sushma Chowla, Judicial Member And Dr. B.R.R. Kumar, Accountant Member For th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10] 1. That the CIT(A) erred in not appreciating that provisions of section 154 of the Act were not applicable in the facts and circumstances of the appeal and, accordingly, order passed by the A.O. u/s 154/143(3) of the Income-tax Act dated 16.02.2016 was beyond the provisions of section 154 of the Act and, therefore, same ought to have been quashed. 2. That the CIT(A) erred in holding that adjustment was required to be made in respect of provision for diminution in value of fertilizer bonds of ₹ 7.21 crores in computation of book profit u/s 115JB of the Act in terms of clause (i) to Explanation- 1 to the aforesaid section without appreciating that it was not a provision but it was the actual loss suffered by the company on valuation of fertilizer bonds as on 31.03.2009 and the loss has already been held as accrued liability in assessment year 2008-09 and also in assessment year 2009-10 by CIT(A), ITAT and Hon ble Delhi High Court and allowable in computation of taxable income. 3. That the Hon ble CIT(A) also failed to appreciate that the amount under reference was not a provision for diminution in value of asset but ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assesse made a claim that interest for the period i.e. the date of issue of intimation and the date of grant of the refund should be allowed to the assessee. The said interest was determined by the Assessing Officer at ₹ 2,01,18,293/- vide order dated 20.07.2015. The assessee is in appeal for non-granting of the interest from the date it was due to the date it was granted i.e. the period during which refund amount was withheld by the Assessing Officer. The last plea of the assessee was vis- -vis the refund arising consequent to the appeal effect order passed u/s 250/143(3) of the Act dated 03.06.2010, against which the refund was allowed on 15.06.2010 and the interest was finally allowed to the assessee on 20.07.2015. The assessee moved an application for rectification in this regard which was rejected and even the CIT(A) did not allow the claim of the assessee. The CIT(A) was of the view that the relief which is asked for was compensation, which could not be allowed to masquerade as interest on interest in appellate proceedings and also placed reliance in the decision of Hon ble Delhi High Court in the case of CIT vs Indian Farmer Fertilizer Co-operative Ltd. [2015] 374 IT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the case of Sandvik Asia Limited vs CIT Ors. [2006] 280 ITR 643 (SC) was referred by the Hon ble Apex Court in CIT vs Gujarat Fluoro Chemicals (supra). In this regard, he pointed out that the Hon ble Apex Court in CIT vs Gujarat Fluoro Chemicals (supra) have laid down the ratio that no interest is to be allowed on delayed refunds. Referring to the departmental Circular which has been referred by the Ld.AR for the assessee, it was pointed out that the said circular does not have any direction for allowing interest on interest. 9. We have heard rival contentions and perused the record. The issue which arises in the present appeal is against the claim of interest on amounts which were not allowed by the Assessing Officer while issuing the refund to the assessee. Admittedly in the case of the assessee, the date of intimation u/s 143(1) of the Act, for the original return of income and for the revised return of income and the date of issue of refund is different. The assessee had raised its claim before the authorities below and the claim of the assessee had been found to be correct. The Assessing Officer then had issued the said interest to the assessee vide order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12. The Hon ble Supreme Court in Sandvik Asia Limited vs CIT Ors. (supra) had laid down the proposition that interest u/s 244(i) of the Act is to be granted to the assessee i.e. interest on interest payable on refund on compensatory ground as the disputed amount was wrongfully and unjustifiably withheld by the Department. 13. The Hon ble Supreme Court in the case of CIT vs HEG Ltd. (supra) deliberated upon the meaning of the words refund of any amount becomes due to the assessee u/s 244A of the Act. In the facts of the said case, no interest was paid by the Department on the refund of ₹ 45,73,582/- for 57 months. The Hon ble Supreme Court held as under:- 7. The next question which we are required to answer is - What is the meaning of the words refund of any amount becomes due to the Assessee in Section 244A? In the present case, as stated above, there are two components of the tax paid by the Assessee for which the Assessee was granted Refund, namely TDS of ₹ 45,73,528 and Tax paid after Original assessment of ₹ 1,71,00,320. The Department contends that the words any amount will not include the Interest whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct and observed that the section was wider in scope than section 244 and it covered cases where refund became due under the Income Tax Act, 1961, in which case the assessee shall, subject to the provisions of this Section, be entitled to receive simple interest. 18. The Hon ble Apex Court concluded by holding as under:- 12. The present case would fall outside sub-clause (a) and (aa) of this provision and, therefore, fall within the residuary clause, namely sub-clause (b) of section 244(A). 19. The Hon ble Apex Court also made reference to the earlier decision of Hon ble Apex Court in the case of CIT vs HEG Ltd. (supra) in para 17 and other decisions and held as under:- 17. In Commissioner of Income Tax, Bhopal v H.E.G. Limited MANU/Hon'ble Supreme Court/2094/2009: 2010 (15) SCC 349, this Court was squarely confronted with the meaning of the expression where refund of any amount become due to the Assessee in section 244(A)(1). This question was answered as follows:- 5. In the present case, as stated above, there are two components of the tax paid by the Assessee for which the Assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paid by them as taxes which are found to have been wrongfully exacted or are believed to be, for any reason, inequitable. The statutory obligation to refund carried with it the right to interest also, This is true in the case of Assessee under the Act. 19. The above extract would clearly show that a corresponding right exists, to refund to individuals any sum paid by them as taxes which are found to have been wrongfully existed or believed to be, for any reason, inequitable. The statutory obligation to refund, being non discretionary, carries with it the right to interest, also making it clear that the right to interest is parasitical. The right to claim refund is automatic once the statutory provisions have been complied with. 20. This decision of the Hon ble Apex Court is of two Judges Bench but has considered the issue in earlier decisions. 21. In such a scenario, we find merit in the plea of the assessee. The decision in the case of CIT vs Gujarat Fluoro Chemicals (supra) is contrary to the earlier three judges Bench decision in CIT vs HEG Ltd. (supra) and it may be pointed out that the said decision was not referred to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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