2014 (10) TMI 1075 - AT - Income Tax

Denial of Liability towards interest expenditure - HELD THAT - Identical issue arose before the Bench for A.Y. 2000-01 and following the decision of the Tribunal in the case of M/s Eminent Holdings Pvt. Ltd. 2014 (7) TMI 2 - ITAT MUMBAI wherein the decision of Hitesh S. Mehta 2013 (10) TMI 1065 - ITAT MUMBAI was followed and finally the issue was set-aside to the file of the ld. CIT(A) for fresh adjudication with a direction to grant a reasonable opportunity of being heard on the issue and thus was allowed for statistical purposes. Following the reasoning being identical facts/issue before us we remand this issue to the file of the ld. CIT(A) for fresh adjudication. Calculation of book profit u/s 115JB - Since we have remanded the aforesaid ground of not granting relief of liability towards interest expenditure claimed by the assessee to the file of the ld. CIT(A) therefore the grievance of the assessee will depend upon the outcome of the decision to be taken with respect of aforesaid ground no. 4. Consequently this ground is consequential to the above - this ground is allowed for statistical purposes. Charging of interest u/s 234A 234B and 234C - HELD THAT - Agreed levy of interest is mandatory and sometimes consequential depending upon the facts of each case. We note that identical issue arose before the Tribunal in the aforesaid cases therefore following the reasoning contained therein we direct the AO to recomputed the interest liability after reducing the amount of tax deductable at source. This ground is allowed for statistical purposes.

Summary

Issues:
1. Appeal against the order of the First Appellate Authority
2. Compliance with principles of natural justice
3. Assessment of income from attached assets
4. Relief of liability for interest expenditure
5. Calculation of book profit under section 115JB
6. Charging of interest under sections 234A, 234B, and 234C

Analysis:

1. Appeal Against First Appellate Authority's Order:
The appellant contested the order passed by the First Appellate Authority, raising various grounds of appeal. During the hearing, the appellant's counsel did not press some of the grounds, which were subsequently dismissed as not pressed. This issue was addressed and resolved during the proceedings.

2. Compliance with Principles of Natural Justice:
The appellant argued that the First Appellate Authority erred in passing the order without adhering to the principles of natural justice. However, this ground was not pressed during the hearing, and thus, it was dismissed as not pressed.

3. Assessment of Income from Attached Assets:
The appellant contended that no income from attached assets should be assessed in their hands. The Tribunal acknowledged similar decisions in related cases and remanded the issue to the First Appellate Authority for fresh adjudication. The appellant was granted the opportunity to present evidence in support of their claim.

4. Relief of Liability for Interest Expenditure:
The appellant sought relief for interest expenditure, citing precedent cases where similar issues were decided in favor of the assessee. The Tribunal remanded this issue to the First Appellate Authority for fresh adjudication, directing a reasonable opportunity for the appellant to be heard and present evidence.

5. Calculation of Book Profit under Section 115JB:
Since the issue related to the calculation of book profit was remanded to the First Appellate Authority, the Tribunal allowed this ground for statistical purposes, pending the outcome of the decision on the interest expenditure claim.

6. Charging of Interest under Sections 234A, 234B, and 234C:
Regarding the charging of interest under the specified sections, the Tribunal directed the Assessing Officer to recalculate the interest liability after considering the amount of tax deductible at source. The issue was allowed for statistical purposes, emphasizing compliance with the provisions of the law.

In conclusion, the appeal of the assessee was partly allowed for statistical purposes, with various issues being remanded for fresh adjudication or recalculations as per the directions provided by the Tribunal.