2016 (8) TMI 1398 - AT - Income Tax

MAT applicability on assessee bank - Held that - We set aside the order passed by Ld CIT(A) on this issue and hold that the provisions of sec. 115JB shall not be applicable for both the years under consideration. Granting of interest u/s 244A - Held that - Since it is matter involving computation of eligible amount of interest u/s 244A of the Act, we are of the view that this issue requires fresh examination at the end of the AO. In the decisions relied upon by the assessee, the Tribunal has followed the decision rendered in the case of India Trade Promotion Organisation Vs. CIT 2013 (9) TMI 451 - DELHI HIGH COURT and accordingly given direction to the AO to follow the said decision. Consisted with the view taken by the Tribunal, we restore this issue to his file with the direction to examine this issue afresh

Summary

Issues:
1. Applicability of sec. 115JB for assessment year 2005-06.
2. Granting of interest u/s 244A of the Act.

Analysis:

*Issue 1: Applicability of sec. 115JB for assessment year 2005-06*
The appeal pertains to the order passed by the Ld CIT(A) confirming the assessment of total income as a negative figure by adopting book profit computed u/s 115JB of the Act. The assessee challenged this order, citing a favorable decision in AY 2006-07 and requesting alignment with the co-ordinate benches' decisions. The Tribunal, after hearing both parties, set aside the Ld CIT(A)'s order, holding that sec. 115JB shall not be applicable for the years under consideration, consistent with the view taken in AY 2006-07.

*Issue 2: Granting of interest u/s 244A of the Act*
The second issue contested by the assessee concerns the granting of interest u/s 244A of the Act. The assessee argued that refunds received were adjusted against tax due without proper allocation between tax and interest portions. Citing Tribunal decisions in the assessee's case and Union Bank of India's case, the Ld A.R sought proper adjustment following the precedent set by the Hon’ble Delhi High Court in India Trade Promotion Organisation Vs. CIT. The Tribunal, recognizing the complexity of the matter and the need for fresh examination by the AO, directed a reevaluation of the interest computation u/s 244A in line with the decision in the India Trade Promotion Organisation case.

In conclusion, the appeal filed by the assessee was allowed, with the Tribunal ruling in favor of the assessee on both issues. The order was pronounced on 3.8.2016 by the Appellate Tribunal ITAT MUMBAI, with the citation 2016 (8) TMI 1398 - ITAT MUMBAI.