1990 (2) TMI 80 - AT - Income Tax

Accounting Year, Certain Assets, Deemed Profit, Equity Shares, General Reserve, High Court, Manufacture And Sale, Public Limited Company, Written Down Value

Summary

Issues:
1. Granting of interest on refunds under section 34A of the Wealth-tax Act.

Detailed Analysis:
The judgment by the Appellate Tribunal ITAT Ahmedabad-C pertains to appeals against the consolidated order of the Dy. CIT (Appeals) concerning the granting of interest on refunds under section 34A of the Wealth-tax Act. The respondent had become entitled to refunds following an order by the Commissioner of Wealth-tax, Gujarat-I, under section 25(1) of the Wealth-tax Act. The refunds were granted by the WTO for each assessment year under consideration. The assessee contended that interest had not been granted as per section 34A, sub-sections (3) and (3A), and relied on provisions of the Income Tax Act, 1961, namely section 244 and rule 119A of the Income Tax Rules, 1962, along with a decision of the Andhra Pradesh High Court in a related case.

During the appellate proceedings, the Dy. CIT(A) accepted the arguments presented by the respondent and directed the WTO to allow interest under the provisions of section 34A, sub-sections (3) and (3A). The Revenue argued that the order by the WTO was merely to give effect to the Commissioner's order under section 25 and did not fall within the scope of section 34A. However, the counsel for the assessee supported the Dy. CIT(A)'s order and cited a decision of the Andhra Pradesh High Court to strengthen their position.

The Tribunal examined the submissions and previous orders, including the decisions cited. It was noted that the order by the WTO, issued to implement the Commissioner's order under section 25, fell within the purview of orders envisaged by section 34A, which includes orders passed in appeal or other proceedings. The Tribunal emphasized that the assessee was entitled to the benefits of sub-sections (3) and (3A) due to the refund resulting from the Commissioner's order and the subsequent WTO order. The Tribunal upheld the Dy. CIT(A)'s order, with the direction that the WTO should calculate and quantify the interest due.

Ultimately, the appeals were dismissed, affirming the decision to grant interest on refunds under section 34A of the Wealth-tax Act.