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TMI Blog2023 (10) TMI 1266X X X X Extracts X X X X X X X X Extracts X X X X ..... d CIT(A) has erred in confirming the action of Learned Assessing Officer in disallowing the claim for deduction u/s 36(1Xviil) by Rs. 1, 40, 26, 066/-, without considering the facts and circumstances of the case. 2. On the facts and circumstances of the case as well N.A. as in law, the Learned CIT(A) has erred in not appreciating the fact that the Learned Assessing Officer ought to have reduced interest on income tax refund of Rs. 22,94,72,711/- from numerator (i.e. business income) as well as denominator (i.e. total revenue from operations) while calculating deduction u/s 36(1)(viii) and not doing so is wrong and contrary to the facts of the case, the provisions of Act and the Rules made there under." 2. Briefly stated facts of the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only for the purpose of computation of 'profit and gains of the business' and not for quantum of 'total revenue from operations'. The relevant finding of the Assessing Officer is reproduced as under: 8.4. Apart from the above, in the assessment order, the Assessing Officer allowed the deduction U/S. 36(1)(vil) of the Income Tax Act, 1961 at Rs. 82,71,73,952 as against Rs. 83,31,54,923 by reducing the deduction u/s. 36(1)(viia)(c) of the Act from the profits of business. However, the learned Commissioner of Income Tax(A) has restored the deduction u/s. 36(1) (viii) to assessee's claim at Rs. 83,31,54,923. However, on account of additions/ disallowance of provision for bad and doubtful debts written back and treatment of interest on in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bove computation) 1324,61,52,014 (A) Revenue from long term finance 938,85,59,239(B) Total Revenue from operations 3072,02,05,538(C) Deduction allowable 20%*A*B/C 80,96,44,862 Accordingly, the deduction U/s. 36(1)(vi) is allowed at 80,96,44,862/-." 3. On further appeal, the Ld. CIT(A) upheld the finding of the Assessing Officer that the interest on income tax refund is part of the total revenue from the operations. The relevant finding of the Ld. CIT(A) is reproduced as under: "Decision on Ground No. 2 The appellant company has received an amount of Rs. 22,94,72,711/- by way of Interest on Income Tax refund. The appellant has not considered the same as Income from Other Sources, and thus, not reduced the same from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he order of the Tribunal passed in ITA No. 2996 and 2997/Mum/2015 for assessment year 2010-11 and 2011-12, wherein the Tribunal has quashed the order passed by the Ld. PCIT u/s 263 of the Act in respect of two issues namely issue of allowance of deduction of Rs. 22.43 crores towards provision for restructuring of assets written back and Rs. 1.44 crores towards provision of bad and doubtful debt written back. As far as 3rd issue of excluding interest on income-tax refund for computation of deduction u/s 36(1)(viii) of the Act, the Tribunal directed that order of the Assessing Officer was prejudicial to the interest of the revenue however directed that while computing the excess deduction u/s 36(1)(viii), the Assessing Officer should exclude ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was not done, leading to excess allowance of deduction by Rs. 1,40,26,066/- and the detailed working is as under: (in rupees) Profit and gains of business as per para 6 of A.O] 13532935769 Less: Income from other sources 229472711 Profits and gains of business 13303463058(A) Revenue from long term finance 9388559239(B) Total Revenue from operations 30720205538 (C) Deduction allowable 20%*A*B/C 813147886/- Deduction actually allowed 827173952/- Excess allowed 14026066/- 5.1 However, the Tribunal (supra) gave a specific direction to the Assessing Officer that amount of 'interest on income-tax refund' should not only be reduced from the 'profit and gains of the business' but also from the 'total revenue from o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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