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2018 (2) TMI 1871 - AT - Income TaxCharging of interest u/s. 234B - whether interest to be levied on assessed income or only on the income declared in the return of income? - HELD THAT - As decided in AJAY PRAKASH VERMA VERSUS INCOME TAX OFFICER 2013 (1) TMI 140 - JHARKHAND HIGH COURT AO was not justified in charging the interest on assessed income and the CIT-A was correct in deleting the same and the order of CIT-A is upheld. Therefore the solitary ground raised by the revenue in this regard is dismissed. Thus interest cannot be levied on assessed income and it can be levied only on the income declared in the return of income. - decided against revenue
Issues:
Whether the CIT-A justified in deleting the additions made on account of charging of interest u/s. 234B of the Act in the facts and circumstances of the case. Analysis: The appeal by Revenue challenged the order of CIT(A) for the assessment year 2010-11 regarding the deletion of additions made on account of charging interest under section 234B of the Act. The ITAT, after considering the submissions and records, noted that the CIT-A deleted the addition based on a decision of the Hon'ble Jurisdictional High Court, which held that interest cannot be levied on assessed income but only on the income declared in the return of income. The Revenue's challenge to this decision before the Supreme Court was dismissed, affirming the High Court's ruling. The ITAT also cited similar cases where the issue was decided in favor of the assessee based on the High Court's decision. Consequently, the ITAT upheld the CIT-A's decision to delete the interest charged by the AO on the assessed income, dismissing the Revenue's appeal. The ITAT emphasized that the AO was not justified in charging interest on assessed income, and the CIT-A's decision to delete the interest was correct. By following the decision of the Hon'ble Jurisdictional High Court in a similar case, the ITAT concluded that the interest should only be levied on the income declared in the return of income. As the facts and circumstances of the cases cited were identical and similar, the ITAT upheld the CIT-A's decision and dismissed the solitary ground raised by the Revenue in this regard. Consequently, the appeal of the Revenue was dismissed.
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