2023 (6) TMI 86 - AT - Income Tax

Foreign Tax Credit (FTC) - amount pertains to the taxes paid by the assessee in USA on the income offered to tax in India - HELD THAT - CIT(A) had stated that prima facie the contentions of the assessee appears to be correct and directed the AO to verify the factual position of the assessee s plea and to allow the claim of the assessee in accordance with law. The directions of the CIT(A) are clear and we see no reason to interfere with the order of the CIT(A) on the said issue. AO is directed to pass the appropriate orders in compliance with the directions of the CIT(A). Interest u/s 234C - AO s action in levying interest on the assessed income instead of the returned income - HELD THAT - As in the case of Aishwarya K. Rai Vs. DCIT 2009 (1) TMI 860 - ITAT, MUMBAI had held that interest u/s 234C of the Act is to be levied on the returned income and not on the assessed income - We direct the AO to restrict the levy of interest under section 234C of the Act to the returned income instead of the assessed income.

Summary

Issues involved:
The judgment involves issues related to Foreign Tax Credit, Interest under section 244A of the Act, and additional levy of Interest under section 234B and 234C of the Act.

Foreign Tax Credit (FTC) (Grounds 4 to 6):
The assessee filed a return of income claiming relief under section 90 of the Act for foreign taxes paid, but the amount was not granted in the intimation under section 143(1) of the Act. The CIT(A) directed the Assessing Officer to examine the issue and allow or disallow the claim after due verification. The Tribunal upheld the CIT(A)'s decision, stating that the contentions of the assessee appeared to be correct. The AO was directed to pass appropriate orders in compliance with the CIT(A)'s directions.

Interest under section 234C (ground No.11):
The assessee challenged the AO's action in levying interest under section 234C of the Act on the assessed income instead of the returned income. The Tribunal referred to a previous Mumbai Bench decision and directed the AO to restrict the levy of interest under section 234C to the returned income, not the assessed income. Consequently, ground No.11 was allowed, and the appeal of the assessee was partly allowed.