JASHWANTLAL S. SHAH, MUMBAI V. DCIT RG 4(1), MUMBAI

ITA 1452/MUM/2009

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 2658 (ITAT-MUMBAI)
• Duration Of Justice: 9 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-12-2009
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: J
• Assessment Year: 2004-2005
• Appeal Filed On: 03-03-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: D N K BHALADIA
• Assessee Lawyers: SATENDRA PANDEY
• Keywords: Revised return
• Section: 244A; 264

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES J, MUMBAI BEFORE SHRI. R.K. GUPTA (J.M.) AND SHRI. B. RAMAKOT AIAH (A.M.) ITA NO.1452/MUM/09 ASSESSMENT YEAR: 2004-2005 JASHWANTLAL S. SHAH A AIDUN BLDG., 4 TH FLOOR, DHOBI TALAO LANE, MUMBAI 400 002. PAN : AAOPS7918R VS. DEPTY. COMM OF INCOME-TAX MUMBAI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI. K. GOPAL & SATENDRA PANDEY. DEPARTMENT BY : SHRI. D.N.K. BHALADIA. O R D E R PER R.K. GUPTA, J.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LEARNED CIT(A)-IV, MUMBAI RELATES TO A.Y.2004-2005. 2. THE APPEAL FILED BY THE ASSESSEE IS DELAYED BY T WO DAYS. CONDONATION APPLICATION ALONG WITH THE AFFIDAVIT IS PLACED ON R ECORD. AFTER CONSIDERING THE CONTENTION OF CONDONATION APPLICATION AND AFFID AVIT, WE ARE SATISFIED THAT THERE WAS A BONAFIDE IN FILING THE APPEAL LATE BY T WO DAYS, ACCORDINGLY DELAY IN FILING APPEAL IS CONDEMNED. 3. FIRST GROUND IS AGAINST UPHOLDING THE ACTION OF THE ASSESSING OFFICER TO MAKE THE VALUATION OF CLOSING STOCK OF UNITS OF MUT UAL FUND HELD HAS BONUS AT THE AVERAGE COST OF ORIGINAL AND BONUS U NITS AS AGAINST VALUED AT RS. NIL BY THE ASSESSEE AND THEREBY CONFIRMING THE DISALLOWANCE OF RS.1,20,00,000/- TO THE TOTAL INCOME. 4. THE LEARNED COUNSEL FOR THE ASSESSEE WHO APPEARE D BEFORE THE TRIBUNAL SUBMITTED THAT SIMILAR ISSUE WAS INVOLVED IN IMMEDIATELY EARLIER ITA NO.1452/MUM/09 A.Y.: 2004-2005 2 YEAR I.E. A.Y. 2003-04. THE TRIBUNAL HAS DECIDED THE ISSUE AGAINST THE ASSESSEE IN ITA NO. 4120/MUM/06 VIDE ORDER DATED 12 .12.2008. COPY OF THE ORDER WAS ALSO FILED. 5. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES, WE DISMISS THIS GROUND OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION AL SO AS ON IDENTICAL FACTS FOR A.Y. 2003-04 SIMILAR CLAIM HAS BEEN DISALLOWED BY T HE TRIBUNAL BY FOLLOWING THE DECISION OF HONBLE SUPREME COURT IN THE CASE O F DALMIYA INVESTMENT CO. LTD. (52 ITR 567). THEREFORE THIS GROUND OF T HE ASSESSEE IS FAILS. 6. REMAINING ISSUE IS AGAINST NOT GRANTING THE INTE REST U/S.244A ON REFUND, WHICH INCLUDES TAX PAID UNDER SELF-ASSESSME NT. 7. THE GROUND WAS RAISED BEFORE THE CIT (A) THAT IN TEREST U/S.244A ON REFUND WHICH INCLUDES TAX PAID UNDER SELF-ASSESSMEN T WAS NOT ALLOWED BY THE ASSESSING OFFICER. IT WAS SUBMITTED THAT THE ASSESSEE IS ENTITLED TO INTEREST U/S.244A ON REFUND WHICH INCLUDES TAX PAID ON SELF ASSESSMENT U/S.140A IN LIGHT OF THE DECISIONS OF KARNATAKA HIG H COURT IN THE CASE OF CIT VS. NGEF LTD. (244 ITR 655), MADRAS HIGH COURT IN T HE CASE OF CIT VS. ASHOK LEYLAND LTD. (252 ITR 542), RAJASTAN HIGH COU RT IN THE CASE OF RADHEYSHAYM GUPTA VS. CIT (245 ITR 633). RELIANCE WAS ALSO PLACED ON DECISION OF GUJARAT HIGH COURT IN THE CASE OF CIT V S. GUJRAT STATE WAREHOUSING CORPORATION LTD. (256 ITR 596), WHEREBY IT HAS BEEN HELD THAT TAX WHICH HAS BEEN PAID BY WAY OF SELF ASSESSMENT T AX U/S.140A GETS ADJUSTED AGAINST THE ASSESSED TAX AND THUS PARTAKES THE CHARACTER OF TAX PAID IN PURSUANCE OF THE ASSESSMENT ORDER. THUS, INTEREST U/S.244(1A) IS LIABLE TO BE ALLOWED AFTER CONSIDERING THE SELF ASS ESSMENT TAX PAID IN PURSUANCE OF THE ASSESSMENT. 8. AFTER CONSIDERING THE SUBMISSIONS OF VARIOUS DEC ISIONS RELIED UPON BY LEARNED A.R. THE LEARNED CIT (A) NOTICED THAT THE D ECISION ON WHICH RELIANCE PLACED ARE FOUND TO BE NOT CORRECT. IT WAS FURTHER NOTICED BY THE LEARNED CIT (A) THAT THE FACTS OF THE PRESENT CASES ARE THAT AS SESSEE HAD FILED ITS RETURN OF ITA NO.1452/MUM/09 A.Y.: 2004-2005 3 INCOME ON 01.11.2004 DECLARING TOTAL INCOME OF RS.2 4.32 CRORES AND ALSO THE SELF ASSESSMENT TAX PAID AFTER 7 MONTHS OF THE END OF THE PREVIOUS YEAR 2003-04 RELEVANT TO A.Y.2004-05. THEREFORE, LEARNE D CIT (A) OBSERVED THAT, THE SELF ASSESSMENT TAX PAID ON 31.10.04 CANNOT TAK E CHARACTER OF ADVANCE TAX PAID AS THE LAST DATE OF ADVANCE TAX WAS 15.03. 04 WHEREAS THE ASSESSEE HAD PAID SELF ASSESSMENT TAX ON 31.10.04. THE LEA RNED CIT (A) FURTHER NOTICED THAT THE ASSESSEE HAD FILED REVISED RETURN OF RS.20.27 CRORES ALSO, ON 07.05.05 WHICH HAS BEEN ACCEPTED U/S.143(3) ON 21.1 2.06. BY FURTHER OBSERVING THAT PROVISION OF SECTION 244A SUB-SECTIO N (2) STATES THAT IF THE PROCEEDINGS RESULTED IN REFUND ARE DELAYED FOR REAS ONS ATTRIBUTABLE TO ASSESSEE WHOLLY OR IN PART, THE PERIOD OF DELAY SO ATTRIBUTABLE TO HIM SHALL BE EXCLUDED FROM THE PERIOD FOR WHICH INTEREST IS PAYA BLE. IN THE PRESENT CASE, THE SELF ASSESSMENT TAX WAS PAID AFTER SEVEN MONTHS OF END OF ASSESSMENT YEAR AND THE RETURN FILED ON 01.11.04 WHICH WAS REV ISED ON 07.05.05 AND ONLY DUE TO REVISION OF RETURN, THE REFUND BECAME P AYABLE. THUS, THE REFUND WAS DELAYED FOR REASONS ATTRIBUTABLE TO ASSE SSEE. 9. THE LEARNED CIT (A) FURTHER OBSERVED THAT, THERE IS NO MENTION WHATSOEVER ABOUT THE SELF ASSESSMENT TAX IN SECTION 244A PERTAINING TO INTEREST ON REFUNDS THEREFORE, THE LEARNED CIT (A) REJECTED THE GROUND OF THE ASSESSEE. 10. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE CONTENTIONS RAISED BEFORE THE LEARNED CIT (A). FURTHER, RELIANCE WAS PLACED ON 100 ITD 245 AND 294 ITR 438 (MAD), THE LEARNED D.R. ON THE OTHER HA ND PLACE RELIANCE ON THE ORDER OF LEARNED CIT (A). 11. AFTER CONSIDERING THE SUBMISSIONS AND PERUSING THE RELEVANT MATERIAL ON RECORD. WE FIND THAT THE ASSESSEE DESERVED TO S UCCEED IN THIS GROUND. WE HAVE GONE THROUGH THE PROVISION OF SECTION 244A( 1) WHICH READ AS UNDER: 244A. (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 T O THE SAID ITA NO.1452/MUM/09 A.Y.: 2004-2005 4 AMOUNT, SIMPLE INTEREST THEREON CALCULATED IN THE F OLLOWING MANNER, NAMELY: (A) WHERE THE REFUND IS OUT OF ANY TAX (PAID U/S.11 5WJ OR) (COLLECTED AT SOURCE U/S.206C OR) PAID BY WAY OF AD VANCE TAX OR TREATED AS PAD UNDER SECTION 199, DURING THE FINANC IAL YEAR IMMEDIATELY PRECEDING THE ASSESSMENT YEAR, SUCH INT EREST SHALL BE CALCULATED AT THE RATE OF (ONE-HALF PER CENT) FO R EVERY MONTH OR PART OF A MONTH COMPRISED IN THE PERIOD FROM THE 1 ST DAY OF APRIL OF THE ASSESSMENT YEAR TO THE DATE ON WHICH T HE REFUND IS GRANTED: PROVIDED THAT NO INTEREST SHALL BE PAYABLE IF THE AMOUNT OF REFUND IS LESS THAN TEN PER CENT OF THE TAX AS DETE RMINED (UNDER (SUB-SECTION (1) OF SECTION 115JW OR) SUB-SECTION ( 1) OF SECTION 143 OR) ON REGULAR ASSESSMENT; (B) IN ANY OTHER CASE, SUCH INTEREST SHALL BE CALCU LATED AT THE RATE OF (ONE-HALF PERCENT) FOR EVERY MONTH OR PART OF A MONTH COMPRISED IN THE PERIOD OR PERIODS FROM THE DATE OR , AS THE CASE MAY BE, DATES OF PAYMENT OF THE TAX OR PENALTY TO T HE DATE ON WHICH THE REFUND TO GRANTED. EXPLANATION - FOR THE PURPOSE OF THIS CLAUSE, DATE OF PAYMENT OF TAX OR PENALTY MEANS THE DATE ON AND FROM WHICH THE AMOUNT OF TAX OR PENALTY SPECIFIED IN THE NOTICE OF DEMAND ISSUED UNDER SECTION 156 IS PAID IN EXCESS OF SUCH DEMAND. 12. AFTER CAREFUL READING OF SUB-CLAUSE (B) OF SUB- CLAUSE (1) OF SECTION 244A, IT IS CLEAR THAT ON ANY OTHER PAYMENT MADE BY ASSESSEE EITHER BY WAY OF TAX OR BY WAY OF PENALTY, THE ASSESSEE ENTITLED TO INTEREST ON THE AMOUNT OF REFUND PAID AS TAX OR PENALTY. SELF ASSESSMENT TAX PAID BY ASSESSEE IS A PART OF TAX PAYMENT THEREFORE IT CANNOT BE SAID THA T IT DOES NOT PARTAKE CHARACTER OF TAX. VARIOUS COURTS HAVE HELD THAT A NY AMOUNT PAID WHICH IS ADJUSTED TOWARDS TAX DEMANDS PARTAKE THE CHARACTER OF TAX. SUCH DECISIONS ARE REPORTED IN 256 ITR 596, 244 ITR 655 AND 252 ITR 242. 13. THE TRIBUNAL IN THE CASE OF B.S.E.S. LTD. 113 T TJ 227 HAS HELD THAT THE INTEREST U/S.244A ON REFUND OF SELF ASSESSMENT TAX IS TO BE ALLOWED TO THE ASSESSEE RIGHT FROM THE DATE OF PAYMENT SUCH TA X AND NOT MERELY FROM THE DATE OF ORIGINAL ASSESSMENT ORDER. WHILE HOLD ING SO THE TRIBUNAL HAS TAKEN INTO CONSIDERATION VARIOUS DECISIONS IN 202 I TR 375 (BOM), 160 ITR 961 (SC), 264 ITR 522 (BOM), 254 ITR 203 (BOM) AND 253 ITR 405 (DEL). ON PERUSAL OF THE DECISIONS DISCUSSED ABOVE IT IS FOUN D THAT THE SAME IS ITA NO.1452/MUM/09 A.Y.: 2004-2005 5 SQUARELY APPLICABLE ON THE FACTS OF THE PRESENT CAS E. THERE IS NO DISPUTE THAT THERE IS REFUND TO THE ASSESSEE ON ACCOUNT OF SELF ASSESSMENT TAX PAID WHILE FILING THE ORIGINAL RETURN. IN FACT THE ASS ESSEE FILED ORIGINAL RETURN SHOWING INCOME OF RS.24.32 CRORES OR SO ON 01.11.04 . THEREAFTER ASSESSEE REVISED ITS RETURN ON 07.05.05 AT A LOWER FIGURE OF RS.20.27 CRORES OR SO. THE REVISED RETURN HAD BEEN ACCEPTED BY THE DEPARTMENT WHILE COMPLETING THE ASSESSMENT U/S.143(3). THE SELF ASSESSMENT TAX PA ID WHICH WAS EXCESS, WAS REFUND BY THE DEPARTMENT. THEREFORE, THERE IS NO DISPUTE THAT THERE IS A REFUND OUT OF THE SELF ASSESSMENT TAX PAID BY THE ASSESSEE. AS STATED ABOVE IN VARIOUS DECISIONS IT HAS BEEN HOLD THAT AS SESSEE IS ENTITLED TO INTEREST U/S.244A ON THE AMOUNT OF REFUND PAID ON A CCOUNT OF SELF ASSESSMENT TAX FROM THE DATE OF PAYMENT. 14. IN VIEW OF THE FACTS AND CIRCUMSTANCES AND IN V IEW OF THE DECISION MENTIONED ABOVE WE DIRECT THE ASSESSING OFFICER TO ALLOW INTEREST ON REFUND ON ACCOUNT OF SELF ASSESSMENT TAX PAID FROM THE DAT E OF TAX PAID. WE ORDER ACCORDINGLY. 15. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D IN PART. ORDER PRONOUNCED ON THIS 3 RD DAY OF DECEMBER, 2009. SD/- (B. RAMAKOTAIAH) ACCOUNTANT MEMBER SD/- (R.K. GUPTA) JUDICIAL MEMBER MUMBAI, DATED 3 RD DECEMBER, 2009. JANHAVI COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER OF INCOME TAX (APPEALS)-IV, MUMBAI 4. COMMISSIONER OF INCOME TAX, CITY-IV, MUMBAI 5. DEPARTMENTAL REPRESENTATIVE, BENCH J, MUMBAI //TRUE COPY// BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI ITA NO.1452/MUM/09 A.Y.: 2004-2005 6 DATE INITIALS 1. DRAFT DICTATED ON 1-12-09 PS 2. DRAFT PLACED BEFORE AUTHOR 2-12-09 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER AM/JM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/J M 5. APPROVED DRAFT COMES TO THE SR. PS PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER