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Issues involved: Appeal against rejection of claim for allowing outstanding interest paid to IDBI on loans under Sec.43B of the Income Tax Act, 1961 as a rectifiable issue u/s 154.
Summary: Issue 1: Claim for rectification under Sec.154 of the Act The assessee filed appeals against the rejection of its claim for allowing outstanding interest paid to IDBI on loans under Sec.43B of the Income Tax Act, 1961 as a rectifiable issue u/s 154 by the CIT(A)-VI, Chennai. Details: The assessee sought rectification of the mistake in computation to claim interest paid to IDBI for previous years, which was not claimed earlier due to non-payment in those years. The Assessing Officer refused the claim under Sec.154, citing no apparent error. The CIT(A) also dismissed the appeals, stating the need for detailed analysis of the one-time settlement with IDBI. Issue 2: Interpretation of CBDT Circular No.669 dated 25.10.1993 The contention revolved around the interpretation of CBDT Circular No.669 dated 25.10.1993, which the assessee relied on for rectification under Sec.154. Details: The assessee argued that errors were rectifiable as per the circular, regardless of the completion of original proceedings under Sec.143(1)(a) or Sec.143(3). The authorities, however, did not consider the rectification petition, leading to the appeal. Judgment: The ITAT Chennai, after considering the arguments and circular, held that the circular applied only where a deduction was disallowed for lack of evidence. Since the assessee omitted to claim interest paid to IDBI, no disallowance was made by the Assessing Officer. The assessments were completed based on filed returns, and no mistake was apparent for rectification. The detailed analysis required for the one-time settlement with IDBI was beyond the scope of rectification under Sec.154. Citing precedents, the ITAT upheld the CIT(A)'s decision to dismiss the appeals. In conclusion, the appeals of the assessee for both years were dismissed by the ITAT Chennai.
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