2017 (12) TMI 750 - AT - Income Tax

Recourse to the provisions of Section 158A - provisions for avoiding repetitive appeals - amortization of depreciation in value of investments disallowed - Held that - Upon perusal, we concur with the submissions that identical matter is sub-judice before Hon ble Bombay High Court. Hence, the provisions of Section 158A titled as procedure when assessee claims identical question of law is pending before High Court or Supreme Court squarely apply to the facts of the case. The Ld. AR, vide letter dated 10/11/2017 has placed on record application in Form No. 8 read with Rule 16 of Income Tax Rules pursuant to Section 158A. Hence, without delving much deeper into the matter, we restore the matter to the file of Ld. AO for completion of all formalities as envisaged by Section 158A. Needless to say that the matter on merits shall be kept in abeyance till the outcome of the decision of Hon ble Court in the cited appeals. Resultantly, the assessee s appeals stands allowed for statistical purposes. Grant interest on interest u/s 244A - inordinate delay in granting the refund to the assessee - Held that - here is no provision in the Income Tax Act to grant interest on interest, whatsoever of any nature and whatsoever are the circumstances. We, as a quasi-judicial authority, could not go beyond realm of the provisions of law and are bound by the statutory provisions. Therefore, on factual matrix, we find ourselves in agreement with the subsequent judgment of larger bench of Hon ble Apex Court rendered in CIT vs Gujarat Fluoro Chemical(2013 (10) TMI 117 - SUPREME COURT). Therefore, respectfully following the same and in view of the statutory provisions as contained in Section 244A, we are of the considered opinion that the assessee could not be granted any interest whatsoever of any nature which was not authorized by the express provisions of law. Resultantly, the assessee s appeal stands dismissed.

Summary

Issues:
1. Disallowance of amortization of depreciation on investments.
2. Carry forward of losses from earlier years.
3. Granting interest on interest due to delay in refund.

Analysis:

Issue 1: Disallowance of Amortization of Depreciation on Investments
- The assessee, a resident corporate engaged in cooperative banking, claimed amortization of depreciation on investments held in different categories.
- Investments were shifted to Held to Maturity category with a reduction in value, leading to amortization charges.
- The AO disallowed the claim, upheld by CIT(A) following tribunal's order, leading to the appeal.
- The AR highlighted similar disallowances in previous years pending before the High Court.
- The matter was restored to the AO under Section 158A pending the High Court's decision, allowing the appeal for statistical purposes.

Issue 2: Carry Forward of Losses from Earlier Years
- The AO adjusted carried forward losses of certain years against current income, but the assessee claimed losses from years before AY 2007-08 were to be adjusted first.
- CIT(A) suggested addressing the issue under Section 154, leading to the appeal.
- The matter was restored to the AO with directions to substantiate the claim, allowing the appeal for statistical purposes.

Issue 3: Granting Interest on Interest Due to Delay in Refund
- In AY 1986-87 and 1997-98, the assessee sought interest on interest due to the delay in refund, citing judicial precedents.
- However, the Tribunal found no provision in the Income Tax Act for such interest and was bound by statutory provisions.
- Following the judgment in CIT vs Gujarat Fluoro Chemicals, the appeals were dismissed, denying compensatory interest on interest due to delay in refund.

Conclusion:
- Appeals related to amortization of depreciation were allowed for statistical purposes, pending the High Court's decision.
- The issue of carry forward losses was allowed for further consideration by the AO.
- Appeals seeking interest on interest due to refund delays were dismissed based on statutory provisions and judicial precedent.