2011 (6) TMI 754 - AT - Income Tax

Summary

Issues involved: Appeal against order of CIT(A) for assessment year 2004-05.

Facts: Search and seizure operation u/s. 132 of the I.T. Act, 1961 in group cases of M/s. Bhooratnam & Company. Incriminating documents found and seized. Case notified with ACIT, Central Circle-5, Hyderabad.

Issue 1 - Interest u/s. 234B and 234C:
- Assessing Officer levied interest u/s. 234B and u/s. 234C.
- Assessee claimed TDS at Rs. 56,90,053, but only Rs. 29,09,173 credit given by AO.
- Assessee argued for TDS benefit u/s. 199 as per Rule 37BA of I.T. Rules.
- Counsel cited judgment of Central Provinces Manganese Ore Co. Ltd. v. CIT (1986) 160 ITR 961 (SC).
- Counsel contended no shortfall in payment of prepaid taxes if full TDS credit given.
- Mumbai ITAT decision in the case of Datamatics Ltd. (2008) 299 ITR (AT) 286 referred.
- Counsel argued interest levied u/s. 234B without legal basis.

Issue 2 - Interest u/s. 234C:
- Assessee argued not liable for advance tax due to TDS exceeding tax payable.
- Shortfall in prepaid tax calculated due to incomplete TDS credit.
- Counsel requested deletion of interest levied u/s. 234C.
- AO added interest u/s. 234B and u/s. 234C aggregating to Rs. 6,60,152.

Judgment:
- CIT(A) directed AO to give credit for TDS certificates filed by appellant company as per Rule 37BA.
- Tribunal found no balance of tax payable by assessee after TDS credit.
- Assessee not liable for interest u/s. 234B and 234C.
- Revenue's appeal dismissed.

Note: Separate judgment not delivered by the judges.