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TMI Blog2024 (12) TMI 557X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee has discharged its liability of Advance Tax u/s. 234C on 31.03.2019. Since, it is not the case of the Department that assessee has not paid the whole of the amount of tax payable in respect of its total income (including capital gains, if any), as part of the remaining installments of advance tax which are due (after accrual of capital gain) or where no such installments are due, i.e., in cases of capital gain accruing after 15th of March of financial year, by the 31st day of March of the financial year, no addition of interest u/s 234C was required in this case. As relying on M/S HAMILTON INDUSTRIES PVT. LTD. [ 2022 (8) TMI 582 - ITAT MUMBAI] direct the deletion of the interest of Rs. 1,18,52,988/- (i.e. Rs. 1,48,04,175 29,51,188). Appeal filed by the assessee is partly allowed. - Shri ABY T. Varkey, Judicial Member And Shri Manoj Kumar Aggarwal, Accountant Member For the Appellant : Mr. Ketan K. Ved, CA For the Respondent : Ms. R. Anita, Addl. CIT ORDER PER ABY T. VARKEY, JM: This is an appeal preferred by the assessee company against the order of the Learned Commissioner of Income Tax (Appeal)/Addl./JCIT (A) (hereinafter in short the Ld.CIT(A) ), Mysore, dated 04.12.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by CPC under section 234C Total Tax Liability Advance Tax (%) Advance tax due Advance tax paid Shortfall Interest u/s. 234C 29,74,49,012 15 4,46,17,352 5,00,000 4,41,17,352 13,23,521 29,74,49,012 45 13,38,52,055 19,00,000 13,19,52,055 39,58,562 29,74,49,012 75 22,30,86,759 32,00,000 21,98,86,759 65,96,603 29,74,49,012 100 29,74,49,012 49,00,000 29,25,49,012 29,25,490 Total 1,48,04,175 4. However, as per the assessee, since the capital gains arose only on 28.03,2019, it correctly worked out the interest u/s. 234C of the Act at Rs. 29,51,188/- as under: Working of interest by the assessee under section 234C Total Tax Liability Advance Tax (%) Advance tax due Advance tax paid Shortfall Interest u/s. 234C 47,82,674 1 7,17,401 5,00,000 2,17,401 6,522 47,82,674 45 21,52,203 19,00,000 2,52,203 7,566 47,82,674 75 35,87,005 32,00,000 3,87,005 11,610 29,74,49,013 100 29,74,49,013 49,00,000 29,25,49,013 29,25,490 Total 29,51,188 5. The Ld.CIT(A) also confirmed the action of the CPC. Therefore, the assessee is in appeal before us. 6. We have heard both the parties and perused the material available on record. The facts stated supra are not repeated for the sake of brevity. The only issue is r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount of such advance tax paid on or before the 15th day of December is less than seventy-five per cent of the tax due on the returned income, then, the assessee shall be liable to pay simple interest at the rate of one per cent per month for a period of three months on the amount of the shortfall from fifteen per cent or forty-five per cent or seventy-five per cent, as the case may be, of the tax due on the returned income; (ii) the advance tax paid by the assessee on the current income on or before the 15th day of March is less than the tax due on the returned income, then, the assessee shall be liable to pay simple interest at the rate of one per cent on the amount of the shortfall from the tax due on the returned income: Provided that if the advance tax paid by the assessee on the current income, on or before the 15th day of June or the 15th day of September, is not less than twelve per cent or, as the case may be, thirty-six per cent of the tax due on the returned income, then, the assessee shall not be liable to pay any interest on the amount of the shortfall on those dates;] (b) [an assessee who declares profits and gains in accordance with the provisions of subsection (1) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of advance tax due on the 15th day of June, 2000, the 15th day of September, 2000 and 15th day of December, 2000.] [Explanation 1]. In this section, tax due on the returned income means the tax chargeable on the total income declared in the return of income furnished by the assessee for the assessment year commencing on the 1st day of April immediately following the financial year in which the advance tax is paid or payable, as reduced by the amount of, (i) any tax deductible or collectible at source in accordance with the provisions of Chapter XVII on any income which is subject to such deduction or collection and which is taken into account in computing such total income; [(ia) any relief of tax allowed under section 89;] (ii) any relief of tax allowed under section 90 on account of tax paid in a country outside India; (iii) any relief of tax allowed under section 90A on account of tax paid in a specified territory outside India referred to in that section; (iv) any deduction, from the Indian income-tax payable, allowed under section 91, on account of tax paid in a country outside India; and (v) any tax credit allowed to be set off in accordance with the provisions of sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowing pronouncement of various hon ble High Courts and co-ordinate benches of ITAT as under: Kumari Kumar Advani vs. ACIT (CPC) in [IT Appeal No. 7661 (MUM) of 2013 dated 13.07.16] Express Newspapers Ltd v. Jt. CIT [2007] 15 SOT 41 Mahendra U. Shah v. ACIT [IT Appeal No. 3048 (MUM) of 2003 Hindustan International v. ITO (2010) 96 ITR 123 (Chnd) [2003] 264 ITR 744 (Rajasthan) Commissioner of Income-tax v. Smt. Premlata Jalan Section 234C of the Income-tax Act, 1961 Interest chargeable Assessment year 2000-01 Whether liability to pay tax by way of advance tax in respect of transaction resulting in capital gains arises only after transaction has taken place or event has occurred - Held, yes Whether where interest is chargeable on delayed or deferred payment of advance tax, it shall be payable only with effect from date when liability to pay advance tax in respect thereof has been incurred Held yes - Advance tax was payable by assessee on capital gains earned by her after 15-3-2000 when date of payment of last installment of advance tax had already expired - Assessee paid interest under section 234C for period of one month, until said liability was discharged in April 2000 - Assessin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aning of Act - Held, yes - Whether, therefore, where assessee had no liability to pay any advance tax under section 208 on any of due dates for payment of advance tax instalments and it became liable to pay tax by virtue of a retrospective amendment made long after close of financial year, assessee could not be branded as a defaulter in payment of advance tax and no interest could be imposed upon it under sections 234B and 234C Held- Yes. 11. Then provisions of S. 234C (1) regarding payment of interest shall not apply to any shortfall in the payment of the advance tax due on the returned income. However, this is subject to condition that the assessee has paid the whole of the amount of tax payable in respect of his total income (including windfall gains, if any), as part of the remaining instalments of advance tax which are due (after accrual of windfall gain) or where no such instalments are due, i.e., in cases of windfall gain accruing after 15th of March of financial year, by the 31st day of March of the financial year. Therefore, when it is not possible for the assessee to estimate accrual or receipt of such income at any time when the payment of first, second, third or fourth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nticipated transactions under the head capital gains arose in the case of assessee on 28-03-2019, this issue has arisen. According to the assessee, it promptly discharged its liability of advance tax u/s 234C on 31-03-2019. In such an event, we are of the view that liability to pay tax by way of advance tax in respect of transaction resulting in capital gains arises only after transaction has taken place or event has occurred. And assessee has discharged its liability of Advance Tax u/s. 234C on 31.03.2019 (refer Chart below Para No.4 supra). And since, it is not the case of the Department that assessee has not paid the whole of the amount of tax payable in respect of its total income (including capital gains, if any), as part of the remaining installments of advance tax which are due (after accrual of capital gain) or where no such installments are due, i.e., in cases of capital gain accruing after 15th of March of financial year, by the 31st day of March of the financial year, no addition of interest u/s 234C was required in this case. In the light of the discussion, we respectfully following the decision of the Tribunal in the identical case supra, direct the deletion of the int ..... 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