2015 (11) TMI 795 - AT - Income Tax

Levy of interest under sections 234B and 234C - contention of the learned authorised representative has been that interest under section 234C should have been computed only for a period of one month from March 16, 2007 to March 31, 2007, because the liability for tax has accrued after the date for payment of third instalment, i.e., after March 15, 2007 - Held that - The Assessing Officer is accordingly directed to compute the interest under sections 234C and 234B following the decision of tin the case of CIT v. Smt. Premlata Jalani 2003 (7) TMI 62 - RAJASTHAN High Court in relation to the issue of computation of interest under section 234C wherein it has been held that liability to pay tax by way of advance tax in case of capital gains arises only after the transaction has taken place and under section 234A in the light of the decision of the hon ble Supreme Court in the case of CIT v. Pranoy Roy 2008 (9) TMI 150 - SUPREME COURT the Assessing Officer ought to have taken the self-assessment tax paid before the due date of filing of return - Decided in favour of assessee for statistical purposes. Also taking into consideration the decision of the hon ble Gujarat High Court in the case of Bharatbhai B. Shah v. ITO 2013 (10) TMI 1025 - GUJARAT HIGH COURT and decision of the learned Commissioner of Income-tax (Appeals)-5 in the case of brother of the assessee namely Sh. Bharat Vinod Daftary

Summary

Issues:
1. Interpretation of provisions of sections 234A, 234B, and 234C for charging interest.
2. Correct computation of interest under sections 234A, 234B, and 234C.
3. Application of legal precedents in determining interest liabilities.
4. Compliance with advance tax payment deadlines for capital gains.

Detailed Analysis:
Issue 1: The appeal involved the interpretation of provisions under sections 234A, 234B, and 234C for charging interest. The appellant contested the charging of interest under these sections, alleging errors in interpretation and application of the law by the Commissioner of Income-tax (Appeals) (CIT(A)).

Issue 2: The primary contention revolved around the correct computation of interest under sections 234A, 234B, and 234C. The appellant argued for a lower interest amount based on the timing of tax payments and the accrual of capital gains. The Assessing Officer's calculations were challenged, and the appellant sought a revised computation of interest.

Issue 3: Legal precedents played a crucial role in determining interest liabilities. The appellant cited relevant court decisions, such as the Rajasthan High Court's ruling in CIT v. Smt. Premlata Jalani, to support their position on the computation of interest under section 234C. The appellant also referenced the Supreme Court's decision in CIT v. Pranoy Roy and the Gujarat High Court's ruling in Bharatbhai B. Shah v. ITO to argue against the interest charged under sections 234A and 234B.

Issue 4: Another significant aspect was the compliance with advance tax payment deadlines concerning capital gains. The appellant emphasized the timing of the accrual of capital gains and the subsequent tax payments to support their argument for a reduced interest liability under section 234C. The CIT(A) and the Assessing Officer's decisions were scrutinized in light of these compliance requirements.

The Tribunal, after considering the contentions and legal precedents, directed the Assessing Officer to recompute the interest under sections 234A, 234B, and 234C in line with the court decisions referenced by the appellant. The appeal was allowed for statistical purposes, aligning with the findings in a similar case involving the brother of the appellant. The judgment emphasized consistency in decisions based on identical factual circumstances and legal interpretations.