2012 (12) TMI 1094 - AT - Income Tax

Summary

Issues Involved:
1. Entitlement to interest u/s 244A on refund for Assessment Year 2006-07.
2. Estimation of net profit ratio for Assessment Years 2007-08 and 2008-09.
3. Charging of interest u/s 234A, 234B, and 234C.

Summary:

Issue 1: Entitlement to Interest u/s 244A on Refund for Assessment Year 2006-07
The assessee filed a return declaring NIL income and claimed a refund of Rs. 7,29,074. The Assessing Officer (AO) determined the refund but did not grant interest u/s 244A, reasoning that the return was not filed as per section 139 and no application u/s 119(2)(b) was filed. The CIT(A) allowed interest for 8 months, excluding 49 months attributable to the assessee's delay. The Tribunal directed the AO to refer the matter to the Chief Commissioner or Commissioner for a final decision as per section 244A(2).

Issue 2: Estimation of Net Profit Ratio for Assessment Years 2007-08 and 2008-09
The assessee declared income at 4% of turnover following a search and seizure action. The AO estimated the income at 8% of turnover, which was reduced to 6% by the CIT(A). The Tribunal found no evidence supporting the higher estimations by the AO and CIT(A). It restored the income to 4% of the total turnover, as declared by the assessee under section 132(4).

Issue 3: Charging of Interest u/s 234A, 234B, and 234C
The assessee contested the interest charged under sections 234A, 234B, and 234C. The Tribunal held that charging interest is consequential and mandatory. The AO was directed to recompute the interest while giving effect to the Tribunal's order.

Conclusion:
The appeals for Assessment Years 2007-08 and 2008-09 were allowed, and the appeal for Assessment Year 2006-07 was allowed for statistical purposes.