2015 (3) TMI 1243 - AT - Income Tax

Disallowance of interest expenses - Held that - CIT(A) has followed the findings given in the case of Eminent Holdings Pvt. Ltd. 2014 (7) TMI 466 - ITAT MUMBAI wherein followed the decision of the Tribunal given in common group case of Hitesh S. Mehta 2013 (10) TMI 1065 - ITAT MUMBAI and restored the matter to the file of the Ld. CIT(A) for fresh adjudication. Respectfully following the findings of the Co ordinate Bench we restore this issue to the files of the Ld. CIT(A) for fresh adjudication after giving reasonable opportunity of being heard to the assessee. Charging of interest u/s. 234A 234B and 234C - Held that - Restore the matter to the file of the AO to recompute the interest liability as per the provisions of the law. We direct accordingly.

Summary

Issues:
- Disallowance of interest expense
- Computation of Book Profit u/s. 115JB of the Act
- Charging of interest u/s. 234A, 234B, and 234C of the Act

Disallowance of Interest Expense:
The appellant's appeals were against three separate orders of the Ld. CIT(A)-40, Mumbai for different assessment years. The Ld. Counsel for the assessee did not press ground No. 1, 2, and 3. Ground No. 4 related to the disallowance of interest expense. The Ld. CIT(A) had relied on a decision that was set aside by the Tribunal. The Tribunal found that the Ld. CIT(A) followed the findings in the case of Eminent Holdings Pvt. Ltd. The Tribunal restored the issue to the files of the Ld. CIT(A) for fresh adjudication, following the findings of a Co-ordinate Bench. The Ld. Counsel pointed out that the issue of interest expenditure was pending before the Honorable Special Court. The Tribunal directed the Ld. CIT(A) to consider this fact while deciding the issue afresh. Ground No. 4 was treated as allowed for statistical purposes.

Computation of Book Profit u/s. 115JB of the Act:
Ground No. 5 related to the computation of Book Profit u/s. 115JB of the Act. The Tribunal considered this ground consequential to the decision on ground No. 4 and disposed of it accordingly.

Charging of Interest u/s. 234A, 234B, and 234C of the Act:
Ground No. 6 related to the charging of interest u/s. 234A, 234B, and 234C of the Act. The Ld. Counsel for the assessee referred to a similar issue considered by the Tribunal in another case. The Tribunal had restored the matter to the file of the AO to recompute the interest liability as per the law. Ground No. 6 was treated as allowed for statistical purposes.

In conclusion, all three appeals filed by the assessee were allowed in part for statistical purposes. The order was pronounced in the open court on 5th March 2015.