1998 (2) TMI 151 - AT - Income Tax

Summary

Issues Involved: Appeal against interest levied u/s 234B and 234C of the Income-tax Act, 1961.

Summary:
The assessee filed appeals against CIT(A) orders regarding interest levied u/s 234B and 234C. Appeals related to interest on enhanced compensation for agricultural land. Assessing Officer held interest accrued annually and levied interest under sections 234B and 234C. CIT(A) upheld the levy citing Supreme Court decisions. Assessee argued no duty to pay advance tax on such interest. Various case laws referenced. Departmental Representative supported CIT(A) decision. Tribunal observed interest accrued annually, no obligation to pay advance tax, and no failure by assessee. Consequently, appeals allowed.

Factual Details:
The assessee received interest on enhanced compensation for agricultural land acquired by the Land Acquisition Department. Assessments done u/s 143(1). Assessing Officer held interest accrued annually, levied interest u/s 234B and 234C. CIT(A) upheld the levy citing Supreme Court decisions.

Assessee's Argument:
Assessee argued no duty to pay advance tax on such interest as it was unforeseeable. Referred to provisions of sections 234B and 234C. Mentioned various case laws to support the argument. Stressed no failure on their part to attract the provisions.

Department's Position:
Departmental Representative supported CIT(A) decision. Stressed that interest was compensatory in nature and assessee was obligated to pay advance tax since interest accrued annually.

Tribunal's Decision:
Tribunal observed interest accrued annually and no obligation for advance tax payment. Found no failure by the assessee to attract provisions of sections 234B and 234C. Allowed the appeals u/s 234B and 234C. No further discussion on other arguments as deemed unnecessary.