Income Tax Appellate Tribunal - Mumbai
Abg International P. Ltd, Mumbai vs Assessee on 8 March, 2010
`IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH 'A' MUMBAI BEFORE SHRI R K GUPTA, JM & SHRI PRAMOD KUMAR, AM ITA No. 870/Mum/09 (Asst Year 2006-07) M/s ABG International P Ltd 5th Floor Bhupati Chambers 13 Mathew Road Mumbai 4 Vs The Dy Commr of Income Tax Cen.Cir36, Mumbai (Appellant) (Respondent) PAN AABCA2890G ITA No. 947/Mum/09 (Asst Year 2006-07) M/s ABG Shipyard Ltd 5th Floor Bhupati Chambers 13 Mathew Road Mumbai 4 Vs The Dy Commr of Income Tax Cen.Cir36, Mumbai (Appellant) (Respondent) PAN AACCA2731P Assessee by: Ms Rachna Agarwal Revenue by: Shri Lal Chand ORDER
PER R K GUPTA:
These are two appeals by two different assessees against the orders of the CIT(A) relating to assessment year 2006-07. Since facts are similar, therefore, they are disposed off together by this single order.
2 The assessees in both these cases are objecting in confirming the interest u/s 234B & 234C on book profit computed u/s 115JB.ITA No. 870/Mum/09
3 In this case, return of income declaring a total income of Rs.11,84,445/- was filed and the assessment was completed on the same income; however, interest u/s 234B & C was charged. It was submitted that the tax has been paid under the provisions of sec. 115JB of the Act and as such, no interest u/s 234B & C is chargeable. It was submitted that section 115JB requires a comparison between the total income computed under the Act and the book profit computed as per provisions of sec 115JB. However, though the total income computed under the Act could be estimated, it was not possible to estimate the book profit. In other words, a comparison between the estimated total income computed under the Act and the estimated book profit was not possible. Consequently, it was not possible to estimate current income by taking into account the provisions of sc. 115JB. Hence, interest u/s 234B & C is not leviable. Reliance was placed on the decision of the Karnakata High Court in the case of Kwality Biscuits Ltd.(284 ITR 434) 3.1 The ld CIT(A) noticed that the AO has distinguished the facts of the present case from the case of Kwality Biscuits Ltd. The CIT(A) noted that the AO has placed reliance on the wording of sub.sec.(5) of sec. 115B which states that 'save as otherwise provided in this section, all other provisions of the Act shall apply to every assessee, being a company, mentioned in this section.' Accordingly, the AO arrived at a conclusion that interest u/s 234B & C was chargeable. The CIT(A) was in agreement with the findings of the AO. The CIT(A) has discussed various case laws relied upon by the assessee and the decision of the jurisdictional High Court in the case of Kotak Mahindra reported in 265 ITR 119 wherein it has been held that interest must be levied u/s 234B and C of the Act for short fall in payment of advance tax even where tax liability was computed u/s 115J. Some other decisions were also taken into consideration by the ld CIT(A) which were in favour of the department. Accordingly, the CIT(A), in view of the decision of the jurisdictional High Court (supra), dismissed the ground of the assessee. Now, the assessee is in appeal here before us.
4 The ld counsel of the assessee, who appeared before the Tribunal stated that the Hon'ble Bombay High Court in a recent decision in the case of Snowcem India Ltd reported in 313 ITR 170 have held that the interest u/s 234B/C cannot be charged where the income is computed u/s 115J. While holding so, the decision of the same High Court in the case of Kotax Mahindra in 165 ITR 119 was found distinguishable. The Hon'ble Bombay High Court has taken into consideration the decisions of the Assam Bengal Carriers Ltd in 239 ITR 862 and the decision of Hon'ble Madhya Pradesh High Court in the case of Itarsi Oils and Flours P Ltd in 250 ITR 686 and also the decision of Karnataka High Court in the case of Kwality Biscuits Ltd in 243 ITR 519 which were in favour of the assessee.
4.1 It is further submitted that the Hon'ble Bombay High Court further took a note on the decision of the Karnataka High Court in the case of Kwality Biscuits Ltd which has been affirmed by the Apex Court in 284 ITR 434. Accordingly, the appeal in that case has been allowed in favour of the assessee. Further, the Tribunal in the case of M/s Hindustan Composites Ltd decided in ITA no.4062/Mum/2005 for AY 2003-04 wherein following the decision of various High Courts have held that interest u/s 234B/C cannot be levied on the income computed u/s 115J. Reliance was also placed on the decisions of the Hon'ble Delhi High Court in the case of Ester Industries Ltd in 206 CTR 260(Del); in the case of Kunhayammed & Others in 245 ITR 260(SC) and also the decision of the Supreme Court in the case of Kwality Biscuits Ltd (supra). On the other hand, the ld DR placed reliance on the orders of the authorities below.
5 After considering the submissions and other relevant material on record, we find that the issue has to be decided in favour of the assessee in view of the decision of the jurisdictional High Court in the case of Snowcem India Ltd (supra). The ld CIT(A) has decided the issue in light of the decision of the jurisdictional High Court in the case of Kotak Mahindra Ltd. However, this decision has been distinguished by the Hon'ble Bombay High Court in a recent decision in the case of M/s Snowcem India Ltd(supra). The Hon'ble Bombay High has taken into consideration the decision of the Apex Court in the case of Kwality Biscuits Ltd in 284 ITR 434(SC) whereby the decision of the Hon'ble Karnataka High Court has been affirmed by it. It is held that while computing deduction u/s 115J, interest u/s 234B/C cannot be charged. Since the issue is squarely covered by the decision of the jurisdictional High Court; therefore, respectfully following the decision of the jurisdictional High Court, we hold that interest u/s 234C/B is not leviable on the income computed u/s 115JB.
ITA No. 947/Mum/096 The facts in this case are similar to the facts in the appeal in ITA No.870/Mum/09. We have decided the appeal in ITA No.870/Mum/09 in favour of the assessee; therefore, for the same reasoning given while deciding the appeal in ITA No.870/Mum/09, we decide this appeal also in favour of the assessee, as the facts are similar.
7 In the result, the appeals filed by the assessee are allowed.
Order pronounced on 8th March 2010
Sd/- Sd/-
( PRAMOD KUMAR )
( R K GUPTA )
Accountant Member
Judicial Member
Place: Mumbai : Dated: 8th March 2010
Raj*
Copy forwarded to:
1
Appellant
2
Respondent
3
CIT
4
CIT(A)
5
DR
/TRUE COPY/
BY ORDER
Dy /AR, ITAT, Mumbai
ITA Ns. 780 & 947/Mum/09.
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