9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2024 (12) TMI 557 - AT - Income TaxInterest calculation u/s 234C - liability to pay advance tax - book profit includes Capital Gain income arose in the 4th quarter - HELD THAT - There is no dispute that provisions of sec 234C is applicable in the case of book-profit/income chargeable to tax u/s 115JA/115JB of the Act; and in this case, the question raised will be answered on a reading of second proviso to section 234C. We note that there is no challenge to the fact that assessee promptly computed and paid Advance tax u/s 234A, 234B and 234C of the Act. But due to unanticipated transactions under the head capital gains arose in the case of assessee on 28-03-2019, this issue has arisen. According to the assessee, it promptly discharged its liability of advance tax u/s 234C on 31-03-2019. In such an event, we are of the view that liability to pay tax by way of advance tax in respect of transaction resulting in capital gains arises only after transaction has taken place or event has occurred. And assessee has discharged its liability of Advance Tax u/s. 234C on 31.03.2019. Since, it is not the case of the Department that assessee has not paid the whole of the amount of tax payable in respect of its total income (including capital gains, if any), as part of the remaining installments of advance tax which are due (after accrual of capital gain) or where no such installments are due, i.e., in cases of capital gain accruing after 15th of March of financial year, by the 31st day of March of the financial year, no addition of interest u/s 234C was required in this case. As relying on M/S HAMILTON INDUSTRIES PVT. LTD. 2022 (8) TMI 582 - ITAT MUMBAI direct the deletion of the interest of Rs. 1,18,52,988/- (i.e. Rs. 1,48,04,175 29,51,188). Appeal filed by the assessee is partly allowed.
Issues Involved:
1. Calculation of interest under Section 234C of the Income Tax Act, 1961. 2. Applicability of interest under Section 234B of the Income Tax Act, 1961. Issue-wise Detailed Analysis: 1. Calculation of Interest under Section 234C of the Income Tax Act, 1961: The primary issue in the appeal was the computation of interest under Section 234C of the Income Tax Act, 1961, concerning the advance tax liability on capital gains realized in the fourth quarter of the financial year. The assessee argued that the capital gains arose on 28.03.2019, and thus, the liability to pay advance tax arose only on 31.03.2019. The assessee computed the interest under Section 234C at Rs. 29,51,188/-, while the Centralized Processing Center (CPC) enhanced it to Rs. 1,48,04,175/-. The CPC's computation included the capital gains amount as part of the total income for all quarters, which the assessee contested. The Tribunal noted that the facts of the case were similar to a previous case (M/s. Hamilton Industries Pvt. Ltd.), where the Tribunal had accepted the assessee's grounds and deleted the interest charged by the CPC. The Tribunal emphasized the second proviso to Section 234C, which provides relief from interest liability in cases where the shortfall in advance tax payment is due to capital gains arising after the due dates for advance tax installments. The Tribunal held that the liability to pay advance tax in respect of capital gains arises only after the transaction has occurred, and since the assessee paid the advance tax on 31.03.2019, no interest under Section 234C was warranted. Consequently, the Tribunal directed the deletion of the interest amounting to Rs. 1,18,52,988/-. 2. Applicability of Interest under Section 234B of the Income Tax Act, 1961: The issue concerning interest under Section 234B was deemed consequential and did not require further adjudication. The Tribunal dismissed this ground, indicating that the resolution of the Section 234C issue effectively addressed any concerns related to Section 234B. Conclusion: The Tribunal allowed the appeal in part, specifically directing the deletion of the interest charged under Section 234C, while dismissing the ground related to Section 234B as consequential. The decision was pronounced on the 4th of December, 2024, in Chennai.
|
