9911796707
TMI Blog2007 (8) TMI 268X X X X Extracts X X X X X X X X Extracts X X X X ..... original assessment/demand notice? Held that:- On the materials available on record, the Tribunal came to the conclusion that the Assessing Officer was not justified in making the addition of ₹ 7,08,184 as income of the respondent on account of the interest payable or paid by M/s. Siddharth Soya Products Pvt. Ltd. The aforesaid conclusion of the Tribunal being a pure question of fact on the materials available before the Tribunal, no substantial question of law arose for decision. The first question formulated by the order dated February 28, 2007, is thus, not a question of law and cannot be raised in appeal under section 260A of the Act. The effect of the first proviso to sub-section (2) of section 220 of the Act is only that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ning of section 28(iv) of the Income-tax Act, 1961? (2) Whether, on the facts and circumstances of the case, the learned Income-tax Appellate Tribunal was justified in holding that while giving appeal effect, the Assessing Officer could not charged interest under section 220(2) from the due date of original assessment/demand notice?" Sub-section (4) of section 260A of the Act provides that the appeal shall be heard only on the question so formulated, and the respondents shall, at the hearing of the appeal, be allowed to argue that the case does not involve such question. Mr. Sumit Nema, learned counsel appearing for the respondent, submitted that a reading of the impugned order would show that the amount of Rs. 7,08,184 was added to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such arose for decision. The findings of the Tribunal on this question are in paragraph 6 of the impugned order of the Tribunal, which are quoted hereinbelow: "On consideration of the above facts and rival submissions, we are of the view that the addition is unjustified in the matter. The assessee in the paper book has filed copies of the seized papers in which mere calculation of interest is shown. The explanation of the assessee was called for and the assessee submitted a certificate from M/s. Siddharth Soya Products Ltd., in which it was clarified that no interest was paid to the assessees by this company and that there was no terms and conditions for charging of the interest. These facts were considered by the Commissioner of Incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the basis of the certificate of the concerned parties explaining that no interest has been charged deleted the additions. The Revenue preferred appeals before the Tribunal and the Appellate Tribunal vide separate orders dismissed the appeals of the Revenue in IT(SS)A Nos. 56/Ind/04 and 57/Ind/04. Copies are filed in the paper book. The above facts clearly proved that the Assessing Officer was not justified in making the addition. We, accordingly, set aside the orders of the authorities below and delete the addition. This ground of appeal of the assessee is accordingly allowed." It will be clear from the aforesaid findings of the Tribunal in the impugned order that on the materials available on record, the Tribunal came to the conclusi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on which the amount is paid. Hence, the Assessing Officer was entitled to demand interest from the end of the period mentioned in sub-section (1) of section 220 till the day the amount is paid. Mr. Nema, on the other hand, referred to the proviso to sub-section (2) of section 220 of the Act and submitted that where as a result of an appellate order, the amount on which interest was payable under this section is reduced, the interest shall be reduced accordingly and the excess interest paid, if any, shall be refunded. He submitted that the Tribunal appears to have given effect to this proviso to sub-section (2) of section 220 of the Act. Sub-section (2) of section 220 of the Act along with the first proviso are quoted hereinbelow: "S. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act is only that the amount on which interest is payable under sub-section (2) of section 220 will get reduced as per the appellate order. The first proviso to sub-section (2) of section 220 of the Act does not have any effect on the period for which the interest is payable under sub-section (2) of section 220 of the Act. The Tribunal, therefore, was not correct in coming to the conclusion that the Assessing Officer cannot demand interest from the date of original demand notice. The Assessing Officer, in our considered opinion, can demand interest from the date of original demand notice but not on the amount originally assessed but on the amount as reduced by the appellate order. The second question of law is answered accordingly in fav ..... X X X X Extracts X X X X X X X X Extracts X X X X
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