Chandrakant K. Shah v. ITO ITAT Mumbai `C’ Bench Before Dinesh Kumar Agarwal (JM) and B. Ramakotaiah (AM) ITA No. 4913/Mum/2011 A.Y.: 1993-94. Dated: 17-10-2012. Counsel for assessee/revenue: Aasifa Khan/ Rajarshi Dwivedy

Facts:

The assessee filed its return of income declaring income of Rs. 1,51,351. The Assessing Officer (AO) vide order passed u/s. 143(3) of the Act assessed the total income of the assessee to be Rs. 15,93,220. After giving effect to the order of ITAT, the total income was determined at Rs. 14,41,074 as per order dated 28.11.2006 giving effect to the order of ITAT. The AO while charging interest u/s. 234B calculated interest @ 2% per month for 19 months on Rs. 8,44,797 (i.e. Rs 5,63,906 amount of tax worked out after giving credit of TDS and self assessment tax (+) Rs. 1,09,440 amount of interest charged u/s. 234A (+) Rs. 1,70,230 amount of interest u/s. 234B up to 15.5.1994 and Rs 1221 amount of interest charged u/s. 234C). According to the assessee, the interest u/s. 234B was chargeable only on Rs 5,63,906 which is amount of tax worked out after giving credit of TDS and self assessment tax. Thus, according to the assessee interest u/s. 234B worked out to Rs. 2,14,284 as against Rs. 8,44,797 charged by the AO. The assessee filed an application u/s. 154 of the Act objecting that interest charged u/s. 234B is not correctly computed.

The AO rejected the claim of the assessee vide order dated 15.4.2010. Aggrieved, the assessee preferred an appeal to the CIT(A) who held that the AO had rightly rejected the appellant’s request for rectification of amount of interest charged u/s. 234B of the Act.

Aggrieved, the assessee preferred an appeal to the Tribunal.

Held:

The Tribunal noted that the there is no dispute that the interest u/s. 234B is leviable. The dispute was on the amount on which interest u/s. 234B is leviable. Having noted the provisions of section 234B of the Act, the Tribunal held that in the facts of the assessee’s case, interest u/s. 234B for the relevant period is chargeable @ 2% per month for 19 months on the amount of Rs. 5,63,906 worked out after giving credit of TDS and self assessment tax.

The Tribunal directed the AO to verify the amount of interest calculated by the assessee as mentioned hereinabove and if he finds that the same is in order, reduce the levy of interest u/s. 234B accordingly. The appeal filed by the assessee was allowed.

Compiler’s Note: Though not mentioned in the order, it appears that 15.5.1994 was the date of filing of return by the assessee.