2015 (1) TMI 1252 - AT - Income Tax

Interest charged under Section 234A and 234B - Held that - CIT(A) in the impugned order has addressed both the issues of excessive calculation of charge of interest under Section 234A and 234B of the Act, as well as by distinguishing the judicial pronouncements relied on by the assessee, before dismissing the assessee s appeal. Before us, except for reiterating the contentions that the interest charged under Section 234A and 234B of the Act was excessive and that the same two judicial decisions in the case of Prannoy Roy (2008 (9) TMI 150 - SUPREME COURT) and Bharatbhai B Shah (2013 (10) TMI 1025 - GUJARAT HIGH COURT) were applicable to the assessee s case, we find that the assessee has failed to controvert the findings of the learned CIT(A) either on facts in respect of the calculation of interest under Section 234A and 234B of the Act or in law and on facts in respect of the judicial decisions cited by the assessee. In this view of the matter, we see no reason to interfere with the findings of the learned CIT(A) in the impugned order and therefore uphold the same - Decided against assessee

Summary

Issues Involved:
1. Disallowance of excess depreciation claimed on vehicles.
2. Disallowance under Section 40(a)(ia).
3. Interest charged under Section 234A and 234B of the Income Tax Act, 1961.

Detailed Analysis:

Issue 1: Disallowance of Excess Depreciation Claimed on Vehicles
The assessee, a proprietor of Sharma Transports, filed a return of income for Assessment Year 2009-10, declaring a total income of Rs. 2,84,79,211. The assessment was completed under Section 143(3) of the Income Tax Act, 1961, determining the income at Rs. 2,91,35,710 due to disallowances, including an excess depreciation claim of Rs. 4,04,220 on vehicles. The Tribunal did not separately address this issue in the appeal, as it was not the primary contention raised by the assessee.

Issue 2: Disallowance under Section 40(a)(ia)
The assessment also included a disallowance under Section 40(a)(ia) amounting to Rs. 1,02,279. Similar to the first issue, this disallowance was part of the initial assessment but was not the focal point of the appeal before the Tribunal.

Issue 3: Interest Charged under Section 234A and 234B of the Income Tax Act, 1961
The primary contention in the appeal was the excessive interest charged under Section 234A and 234B. The assessee argued that the interest was excessive and not in line with judicial precedents, particularly the Supreme Court's decision in CIT v. Prannoy Roy (309 ITR 231) and the Gujarat High Court's decision in Bharatbhai B. Shah v. ITO (2013) 31 Taxmann.com 34. The assessee claimed that the correct interest should be Rs. 34,116 under Section 234A and Rs. 4,99,921 under Section 234B, as opposed to the Assessing Officer's computation of Rs. 2,86,932 and Rs. 5,51,822 respectively.

The Tribunal examined the rival contentions and perused the material on record. It was noted that the CIT(A) had thoroughly addressed the issues, including the assessee's calculation of interest and the judicial decisions cited. The CIT(A) distinguished the case of Prannoy Roy, noting that in Prannoy Roy, the taxes were paid before the due date, whereas in the present case, the assessee paid taxes late and filed the return late. Consequently, the Tribunal found no merit in the assessee's contentions and upheld the CIT(A)'s findings.

The Tribunal also referenced the Supreme Court's decision in CIT v. Anjum M.H. Ghaswala, which emphasized that the interest under Sections 234A, 234B, and 234C is mandatory and compensatory in nature, not penal.

Conclusion:
The Tribunal dismissed the appeal, concluding that the CIT(A) had correctly addressed the issues and distinguished the judicial precedents cited by the assessee. The assessee's grounds regarding the excessive interest charged under Sections 234A and 234B were found to be without merit, and the appeal was consequently dismissed. The order was pronounced in the open court on January 23, 2015.