2019 (3) TMI 1257 - AT - Income Tax

Rectification of mistake u/s 154 - deduction claimed towards interest expenditure u/s 57 - HELD THAT - Assessee filed an application under section 154 of the Act before learned Commissioner (Appeals), however, as it appears, the said application was rejected by learned Commissioner (Appeals) in a mechanical manner without affording an opportunity of being heard to the assessee and without verifying the evidences furnished by the assessee. Be that as it may, it is the specific contention of the assessee from the assessment stage itself that the actual interest received by him from Tinco Chemicals is ₹ 68,277, and not ₹ 6,08,542, as reflected in the return of income. Since the aforesaid claim of the assessee has not been properly verified either by the Assessing Officer or learned Commissioner (Appeals) it requires to be restored to the Assessing Officer for verifying assessee s claim about the actual amount of interest received from Tinco Chemicals. The Assessing Officer is directed to verify the revised computation of income and other supporting evidences filed by the assessee with regard to the actual interest income received from Tinco Chemicals. If on verification of evidences filed by the assessee the claim is found to be correct, the AO should compute the interest income of the assessee as per the revised computation of income. - Appeal allowed for statistical purposes.

Summary

Issues:
Challenge to addition of interest expenditure in the assessment year 2012-13.

Analysis:
The appeal was filed challenging the addition of ?5,40,265 towards interest expenditure for the assessment year 2012-13. The Assessing Officer observed discrepancies in the return of income filed by the assessee, leading to a deduction claimed under section 57 of the Act. The assessee rectified the mistakes through a revised computation of income and an affidavit during the assessment proceedings. However, the Assessing Officer restricted the deduction to ?68,277 and disallowed the balance amount. The assessee appealed to the Commissioner (Appeals) without success, claiming errors in showing salary and interest income in the return. The Authorized Representative argued that the Assessing Officer should consider the revised computation of income and documentary evidence provided by the assessee. The Departmental Representative contended that since no revised return of income was filed, the mistakes could not be considered. The Tribunal noted that the Assessing Officer did not acknowledge the revised computation of income due to the absence of a revised return. While the Commissioner (Appeals) accepted the claim regarding salary income, the issue of interest income was not fully addressed. The Tribunal directed the Assessing Officer to verify the actual interest income received from Tinco Chemicals as claimed by the assessee and compute the interest income accordingly, emphasizing the need to provide a fair hearing to the assessee during the process.

In conclusion, the appeal was allowed for statistical purposes, and the case was remanded to the Assessing Officer for proper verification and computation of the interest income based on the revised computation of income and supporting evidence provided by the assessee.