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2014 (7) TMI 956 - AT - Income TaxInterest expenses Computation of book profits u/s 115JB - Held that - Whether the interest liabilities constitutes ascertained one or not is also linked to the issue of rejection of books of accounts as the books of account is the basis for computation of book profits u/s 115JA of the Act - following the decision in M/s. Cascade Holdings Pvt. Ltd. Versus DCIT-CC-31, Mumbai 2014 (7) TMI 896 - ITAT MUMBAI - the issue is to be remitted back to the CIT (A) for fresh adjudication Decided in favour of assessee. Interest u/s 234A, 234B and 234C Held that - The issue relating to the deduction of interest expenditure is remitted to the CIT (A) for fresh adjudication thus, the liability of the assessees u/s 234A, 234B and 234C depends upon the proposed adjudication of the CIT (A) in the set aside proceedings Decided in favour of Assessee.
Issues Involved:
1. Disallowance of interest expenses 2. Computation of book profit under section 115JB 3. Interest charged under section 234A, 234B, and 234C Analysis: Issue 1: Disallowance of Interest Expenses The appeal was against the order of the CIT(A) for the assessment year 2008-09. The assessee contested the disallowance of interest expenses amounting to Rs. 86,15,970. The assessee had borrowed money from family brokerage firms for investments in shares and securities, claiming deduction on interest payable. The AO disallowed the claim, stating it was a contingent liability pending before the Special Court. The CIT(A) upheld the AO's decision. The Tribunal noted a similar issue in the assessee's case for the assessment year 2007-08 and set it aside for fresh adjudication by the CIT(A). Following consistency, the Tribunal set aside the issue for the current assessment year to the CIT(A for reconsideration. Issue 2: Computation of Book Profit under Section 115JB Ground No. 5 was related to the computation of book profit under section 115JB, which was consequential to the disallowance of interest expenses. The Tribunal referred to a similar issue in the assessee's case for the assessment year 2001-02 and set it aside for fresh adjudication by the CIT(A). Following the rule of consistency, the Tribunal directed the CIT(A) to reconsider this issue for the current assessment year. Issue 3: Interest Charged under Section 234A, 234B, and 234C Ground No. 6 raised concerns about interest charged under section 234A, 234B, and 234C of the Income Tax Act. The Tribunal noted that a similar issue in the assessee's case for the assessment year 2007-08 was set aside for reconsideration by the CIT(A). Considering the consequential nature of the grounds, the Tribunal set aside this issue for the current year to the CIT(A) for deciding the quantum of interest after resolving other issues on merits. The Tribunal also referenced a decision by the Hon'ble Jurisdictional High Court regarding the chargeability of interest under these sections. Ground No. 7 was deemed general and did not require specific adjudication. In conclusion, the appeal of the assessee was partly allowed for statistical purposes, with various issues being set aside for fresh adjudication or reconsideration by the CIT(A) based on previous decisions and the merits of the case.
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