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TMI Blog2004 (6) TMI 285X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act mentions only the amount of income-tax paid or payable. That does not include interest. Insofar as interest on income-tax is not mentioned in this section, this cannot be added under s. 115JA of the Act. It, therefore, came to the conclusion that the addition of interest on income tax cannot be made. However, in the impugned order, the learned CIT(A) relied on the decision of Bharat Commerce Industries Ltd.[ 1984 (9) TMI 46 - DELHI HIGH COURT] which was in the context of deduction as an expenditure for the purpose of earning any income or profit but not about the deemed income under s. 115JA, which provision has to be construed strictly. In that view of the matter, the learned CIT(A) is found to have committed an error. Having reg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act, interest payable is distinct and separate from the tax. (ii) That the Hon ble CIT(A) has erred in holding that the AO has been legally right in making adjustment in respect of interest paid to IT Department, while determining book profit for the s. 115JA of the Act vide intimation under s. 143(1)(a) of the IT Act and particularly, in the circumstances when he had already taken up the case for the purpose of scrutiny under s. 143(3) of the IT Act. (iii) That the Hon ble CIT(A) also erred in upholding levy of additional tax of Rs. 1,01,105 under s. 143(1A) of the IT Act in the circumstances of the case of the appellant-company. (iv) That the Hon ble CIT(A) also erred in upholding the levy of interest under s. 234B of IT Act. He ought ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 : (1985) 153 ITR 275 (Del) following the Supreme Court decision in Mahalakshmi Sugar Mills vs. CIT (1980) 16 CTR (SC) 198 : (1980) 123 ITR 429 (SC) held that interest under various provisions of the IT Act should be treated as part of the tax for the purposes of s. 40(a)(ii) of the Act. He, therefore, was of the view that these judgments have a direct relevance with the issue before him and as such the adjustment on account of interest paid to the IT Department while computing the income under s. 115JA was held legal followed thereby dismissing the grounds and the appeal before him. 4. Assessee s counsel before us contends that insofar as interest on income-tax was concerned, the same was not mentioned under s. 115JA of the Act, for dete ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as interest is added to the tax as determined. There is nothing to show that it is to be treated as tax, and it thus retains its character of interest but is recoverable along with the tax. Indeed, s. 29 of the IT Act makes a distinction between tax, penalty and interest. Since s. 23A speaks of deduction only of income-tax and super-tax, no deduction could be made in respect of this interest. Question No. 2 was, thus, correctly answered by the High Court. 7. Another decision relied by the Calcutta High Court in Shree Niwas Sons vs. ITO (1974) 62 ITR 566 (Cal) wherein it has been held as under: Therefore, in view of the above two decisions of the Supreme Court, tax and interest are different and distinct in character. Under sub-s. (1) of s. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 160 CTR (SC) 8 : (2000) 243 ITR 48 (SC) wherein it has been held as under: Sec. 2(43) of the IT Act defined tax during the relevant period as income-tax and super-tax chargeable under the provisions of that Act. Therefore, what is levied under the charging provision of that Act, i.e., s. 4 of the IT Act, alone can be called income-tax. Interest, penalties and fines, which are also payable under the other provisions of that Act cannot be termed as income-tax. They are imposed in addition to income-tax for the purpose of enforcing the levy of income-tax. 11. It was contended that the authorities below have erred in making the adjustment in the profit by the amount of interest paid to IT Department while working out deemed profit under s. 115 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. which was in the context of deduction as an expenditure for the purpose of earning any income or profit but not about the deemed income under s. 115JA, which provision has to be construed strictly. In that view of the matter, the learned CIT(A) is found to have committed an error. Having regard to the decision of Kerala High Court in Fertilisers Chemicals Travancore Ltd., the action to increase the profit by the amount of interest paid to the IT Department while determining book profit cannot be upheld. Accordingly, ground of the assessee stands allowed. Since the charging of additional tax under s. 143(1)(a) would be consequential, this ground along with ground Nos. 1 2 stands allowed. 14. As regards charging of interest under s. 234B ..... X X X X Extracts X X X X X X X X Extracts X X X X
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