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TMI Blog2016 (3) TMI 1005X X X X Extracts X X X X X X X X Extracts X X X X ..... rance of Ld. DR from Revenue. However, in the present cases, we find that these are old appeals and have been fixed for hearing as many as eight times (including today's hearing). Hence, we rejected the adjournment application and proceeded for hearing Ld. Senior Authorized Representative, Shri J.P.Khaitan and Bikash Chanda appearing on behalf of assessee. 3. Since the issues raised by assessee in these appeals relate to common issue, therefore, we are hearing them together for the sake of convenience and disposing them by passing a consolidated order. We take a lead case in assessee's appeal in ITA No.301/Kol/2015 for the AY 2009-10 which is reproduced below:- "1. For that the order made by the Learned Commissioner of Income Tax under section 263 of the Income tax Act, 1961 is illegal, invalid and not sustainable in law. 2. For that the Learned Commissioner of Income Tax, erred in law as well as in facts in holding that the Assessing Officer was not justified in allowing double deduction for excise duty on closing stock since the excise duty included in the value of closing stock had been offset by way of debit in the Profit & Loss Account. 3. For that the learned Comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee for the year under consideration has paid more dividend distribution tax (DDT for short) than the actual liability. The AO has granted the refund of the excess DDT along with interest for an amount of Rs. 58,10,576.00 under section 244A of the Act. The ld. CIT found that there is no provision under the Act for the grant of interest on refund of excess DDT paid. Accordingly, ld. CIT issued notice for the clarification on the above subjectmatter for which assessee submitted that a deduction of Rs. 868,67,534/- in respect of excise duty on closing tock was claimed in the AY 2009-10 and same was added back in the computation of income for the subsequent AY 2010-11. Similarly a deduction of Rs. 372,89,01,394/- was claimed in the earlier AY i.e. 2008-09 and added back in the computation of income for AY 2009-10.The tax rate for both the AYs was 33.99%. Besides above, AO has allowed the relief of the excise duty element in the finished goods by virtue of the provisions of Sec. 43B of the Act after exhaustive examination. 4.1 The assessee in connection with the interest granted under section 244A of the Act submitted that the assessee is very much entitled for interest on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... line with the judgment of Hon'ble Supreme Court decision in the case of Berger Paints India Limited vs. CIT (2004) [266 ITR 99 (SC)]. Therefore, the claiming of the deduction for excise duty on closing stock in AY 2009-10 of Rs. 868,67,87,534/- and offering it for tax in the next assessment year i.e. AY 2010-11 was not prejudicial to the interest of the Revenue in AY 2009-10. The Assessing Officer had exhaustively examined the above claim during the assessment for AY 2009- 10 and allowed the deduction in accordance with the abovementioned judgments of Hon'ble Apex Court. 6.1 Regarding the payment of interest under section 244A it was submitted that the interest of Rs. 58,10,576/- on refund of excess DDT paid by the company has been correctly granted as per the provisions of the Act. None appeared on behalf of Revenue. 6.2 From the aforesaid discussion, we find that the ld. CIT found from the impugned order of the AO that the assessment has been framed without considering and examining the issue of excise duty on closing stock which resulted the double deduction to the assessee in profit & loss account and in the computation of income. At the same time the AO also granted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per column no. 26 of the computation of income (Revised) is Rs. 372,89,01,394/-. Therefore, there is a net deduction claim of Rs. 495,78,86,140/-. Deduction towards excise duty payable on closing stock as claimed by the assessee by way of debiting it in the profit & loss account is allowable u/s. 43B of the Income tax Act. 1961 subject to its actual payment within due date of filing of the return. If the deduction is allowed once there is no question of further allowance of deduction under the same head. In connection with the above observations you are hereby required to furnish an explanation in respect of the method of accounting followed for accounting of excise duty on closing stock and claim of the same in the profit and loss account and in the computation of income u/s. 43B of the Act. 8. Furnish the details of dividend distribution tax paid by the company u/s 115) and state whether it has been paid within the stipulated time limits as per the Income Tax Act, 1961." In response to the notice issued u/s 142(1) of the Act, the reply of the assessee stand as under:- "1. Claim for excise duty on closing stock in the return for AY 2009-10 (item No. 6 of your requisition dt. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duty as well as dividend distribution tax. In the context of above we find the support from the judgments of Hon'ble Delhi High Court in the case of CIT Vs. Sunbeam Auto Ltd. (2011) 332 ITR 167 (Del) and in the case of CIT v. Anil Kumar Sharma (2011) 335 ITR 83 (Del), held that the fact as to whether the AO has applied his mind or not need not necessarily be determined from what has been stated in the assessment order alone, it has to be examined as to whether any inquiry was at all conducted by the AO. There exists a difference between lack of inquiry and inadequate inquiry. If there were any inquiry, even inadequate that would not give an occasion to exercise jurisdiction u/s 263 of the Act. Besides the above, we also find the various orders of the court on the above issue and on that basis it can be concluded that the order of AO is not prejudicial to the interest of the Revenue. Some of those cases are listed below:- As per the above said Supreme Court decision in the case of Berger paints India Ltd. Vs. CIT [266 ITR 99] deduction u/s. 43B is to be fully allowed for excise duty and other duties on payment basis inclusive of the amount included in closing stock. An extrac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y included in the valuation of the assessee's closing stock at the end of the accounting year as relating thereto." 6.5 In view of above discussion, we find that the order passed by the ld. CIT u/s 263 of the Act is not erroneous in so far as it is prejudicial to the revenue. Regarding the interest on the refund granted by the AO under section 244A of the Act, let us understand the provisions of section 244A which is reproduced below : "(1) Where refund of any amount becomes due to the assessee under this Act he shall, subject to the provisions of this section, be entitled to receive, in addition to the said amount, simple interest thereon calculated in the following manner, namely:- (a) Where the refund is out of any tax paid under section 115WJ or collected at source under section 206C or paid by way of advance tax or treated as paid under section 199, during the financial year immediately preceding the assessment year, such interest shall be calculated at the rate of one half percent for every month or part of a month comprised in the period from the 1std day of April of the assessment year to the date n which the refund is granted: Provided that no interest shall be pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 549 dated 31.10.1989. While insertion of a new interest section u/s 244 for interest on refunds, the CBDT had clarified in the said circular that apart from being complicated, the earlier sections for refund/interest had left certain gaps for which interest was not paid by the department to the assessee for money remaining with the Government. To remove this inequity, as also to simplify the provisions in this regard, the Amending Act, 1987 has inserted a new section 244A in the Income-tax Act, applicable from the assessment year 1989-90 and onwards, which contains all the provisions for payment of interest by the department on delay in the grant of refunds. We also find that support for our conclustion in the Judicial precedents on the issue of interest on refund due u/s. 244A(1)(b) of the Act. IT is not out of place to point out the Income Tax department has in a similar way contended at various judicial forums across the country that there are no provisions for payment of interest on refund due to self-assessment tax and all in the cases the appellant and judicial authorities have held that interest has to be granted u/s. 244A(1)(b) on self assessment tax. Reference can be made ..... X X X X Extracts X X X X X X X X Extracts X X X X
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