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TMI Blog2014 (1) TMI 589X X X X Extracts X X X X X X X X Extracts X X X X ..... Act – Held that:- Following M/s PRECOT MERIDIAN LTD [2014 (1) TMI 104 - ITAT CHENNAI] - The period specified under section 220(1) has to be taken into consideration from the date of passing of the fresh assessment order and not the earlier assessment order, which has been set aside – decided in favour of Assessee. Interest u/s 234B and 234C of the Act – Held that:- The interest u/s 234B and 234C is mandatory in nature - The interest is charged for contravening the provisions of the Act i.e. non-payment of advance tax within the stipulated time – there was no infirmity in the order of CIT(A) – Decided against Assessee. - ITA Nos.1562 & 1565/Mds/2012 - - - Dated:- 8-5-2013 - O K Narayanan and Vikas Awasthy, JJ. For the Appellant : S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ide the issue in the light of the judgement of the Hon ble Supreme Court of India in the case of CIT Vs. Ramraja Surgical Cotton Mills (2007) 294 ITR 328(SC). In the second round, the Assessing Officer again disallowed the claim of assessee. The Assessing Officer further levied interest of Rs. 4,23,57,258/- under section 220(2) and under section 234B Rs. 1,09,39,490/-. Aggrieved against the assessment order, the assessee preferred an appeal before the CIT(A). The CIT(A) vide impugned order dismissed the appeal of assessee. Now, the assessee is in second appeal before the Tribunal. 4. Shri K.Ravi Advocate, appearing on behalf of the assessee submitted that the Tribunal has decided the issue regarding disallowance of expenditure incurred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch depreciation should be granted. Whereas, it is submitted that the sale of a worn out machinery and replacement thereof by new machinery can only be treated as reduction and addition to the block of assets, which is a part of replacement. It is also submitted that while under the law, as it stood prior to 1988-89, the fact of treating the entire mill as an integrated unit may have had the effect of treating the replacement of machinery as replacement of parts of a larger whole and thus treated as revenue expenditure and once the concept of block of assets has been brought in by the Parliament from the assessment year 1988-89,whether the mill is an integrated whole or not,whether the replacement of machines resulted in increased capacity o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... find that the issue is also adjudicated in assessee's own case in ITA No.1870/Mds./12 decided on 20.02.13, the relevant extract of the order of the Tribunal dealing with this issue is reproduced herein below: 12. The next issue raised by the assessee is with regard to levy of interest under section 220(2) of the Act. The Assessing Officer vide assessment order dated 21.12.2011 has levied interest under section 220(2) for the period of 35 months from 1.2.2009 to 31.12.2011. 13. The counsel for the assessee has submitted that since the original assessment order was set aside and the Tribunal had remanded the matter back to the Assessing Officer for deciding the issue afresh after taking into consideration the judgement passed by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt order. Therefore, the contention of the DR that interest levied u/s.220(2) is not appellable in the present case is not tenable. 15. Moreover, in Circular No.334 dated 3.4.1982 the Department has clarified that where an assessment order is cancelled u/s.146 or cancelled/set aside by an appellate/ revisional authority and the cancellation/setting aside becomes final, no interest under section 220(2) can be charged pursuant to the original demand notice. The necessary corollary of this position will be that even when the assessment is reframed, interest can be charged only after the expiry of 35 days from the date of service of demand notice pursuant to such fresh assessment order. 16. The Assessing Officer has levied interest ..... X X X X Extracts X X X X X X X X Extracts X X X X
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