SULPHUR MILLS LTD, MUMBAI V. ADDL CIT RG 8(3), MUMBAI

ITA 22/MUM/2014

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 6673 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 5 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-06-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2010-2011
• Appeal Filed On: 02-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V JUSTIN
• Assessee Lawyers: M K PATEL; K S CHOKSHI
• Keywords: Business income
• Section: 143(3); 80IB; 10B; 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH E, MUMBAI BEFORE SHRI C.N. PRASAD, JUDICIAL MEMBER AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA NO.22/M/2014 ASSESSMENT YEAR: 2010-11 M/S. SULPHUR MILLS LTD., 604/605, 349-BUSINESS POINT, 6 TH FLOOR, WESTERN EXPRESS HIGHWAY, ANDHERI (E), MUMBAI 400 069 PAN: AABCS8736K VS. ADDL. CIT RANGE (3), 2 ND FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 400020 (APPELLANT) (RE SPONDENT) PRESENT FOR: ASSESSEE BY : SMT. M.K. PATEL, A.R. & SHRI K.S. CHOKSHI, A.R. REVENUE BY : SHRI V. JUSTIN, D.R. DATE OF HEARING : 26.06.2018 DATE OF PRONOUNCEMENT : 28.06.2018 O R D E R PER RAJESH KUMAR, ACCOUNTANT MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSES SEE AGAINST THE ORDER DATED 07.10.2013 OF THE COMMISSIONE R OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS TH E CIT(A)] RELEVANT TO ASSESSMENT YEAR 2010-11. 2. THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL: (A) LEARNED CIT(A) VIDE ORDER DATED 07.10.2013 HAS ERRED IN UPHOLDING THE ORDER PASSED BY THE AO DISALLOWING CLAIM U/S LO B IN RESPECT OF THE FOLLOWING INCOMES BY REDUCING THE CLAIM FOR PROFITS ELIGIBLE FOR DEDUCTION U/S LOB OF THE INCOME TAX ACT, 1961 WITHOUT CONSIDE RING THE FACTS AND CIRCUMSTANCE OF THE CASE. THE SAME BE ALLOWED. ITA NO.22/M/2014 M/S. SULPHUR MILLS LTD. 2 PARTICULARS AMOUNT (RS.) MISCELLANEOUS INCOME 13,72,214 LEGAL EXPENSES RECOVERED-DEPOT 9,989 AS PER PROFIT/LOSS ACCOUNT 4,653 LESS: OTHER INCOME AS PER LOB COMPUTATION 4,852 - 199 TOTAL 13,82,004 (B) LEARNED CIT(A) HAS ERRED IN GRANTING DEDUCTION U/S 10B AT RS.12,23,89,669/- AS COMPARED TO RS.12,34,07,856/- AS CLAIMED BY ASSE SSEE WITHOUT CONSIDERING FACTS AND CIRCUMSTANCE OF THE CASE. SAME BE ALLOWED. 2) (A) THE LEARNED CIT(A) HAS MENTIONED IN THE CIT( A) ORDER 'FROM THE PERUSAL OF THE ASSESSMENT ORDER, IT IS OBSERVED THAT AO HAS NOT CHARGED ANY INTEREST U/S 115P OF THE I T ACT, 1961 AS CLAIMED BY THE ASSESSEE, THEREFORE TH E GROUND HAS BECAME INFRUCTUOUS HENCE DISMISSED'. THE LEARNED CIT(A) FAILED TO CONSIDER THAT EVEN A CALCULATION ERROR IN THE COMPUTATION OF TAX LIABILI TY IS A VALID GROUND. THE LEARNED CIT(A) ERRED IN DISMISSING THE GROUND OF THE INTERE ST U/S 115P OF RS 7,40,337/- ON LATE PAYMENT OF DIVIDEND DISTRIBUTION TAX OF RS55,28,898/- WITHOUT CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE. THE SAME BE CONSIDERED. (B) THE LEARNED AO HAS NO JURISDICTION TO LEVY THE INTEREST U/S 115P IN THE ASSESSMENT ORDER PASSED U/S 143(3) OF THE INCOME TA X ACT, 1961. THE SAME IS BAD IN LAW AND BE DELETED. THE LEARNED CIT (A) HAS TAKEN T HE GROUND NO 2 RELATED TO INTEREST U/S 115P AS INFRUCTUIOUS, AS THE SAME IS NOT MENTIO NED IN THE ASSESSMENT ORDER. THE SAME BE CONSIDERED. WITHOUT PREJUDICE TO 2 (A) ABOVE THE ASSESSING OFFI CER HAS NOT GIVEN ANY OPPORTUNITY FOR THE LEVY OF SAID INTEREST AND HENCE IS BAD IN L AW. WITHOUT PREJUDICE TO 2 (A) AND (B) ABOVE THE ASSESS EE HAS DELAYED ONLY FOR ONE DAY FROM THE DUE DATE AND HENCE INTEREST BE LEVIED ONLY ON DELAY FOR ONE DAY. THE SAME BE CONSIDERED THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR DELETE TO THE GROUND OF APPEAL OF THE TIME OF OR BEFORE HEARING. 3. THE ISSUE RAISED IN GROUND NO.1 IS AGAINST THE FI NDING OF LD. CIT(A) UPHOLDING THE ORDER OF AO DISALLOWING THE CLAIM UNDER SECTION 10B IN RESPECT OF THE OTHER INCOME (MISCELLANEOUS INCOME) COMPRISING HANDLING CHARGES RECEIVED (-) RS.4996.35, SUNDRY BALANCES WRITTEN BACK RS.13,77,210.41, LEGAL EXPENSES RECOVERED RS.9,989/- A ND OTHER MINOR ADJUSTMENTS (-) 199. THE LD. A.R., AT THE OUTSET, SUBMITTED BEFORE THE BENC H THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE ITA NO.22/M/2014 M/S. SULPHUR MILLS LTD. 3 DECISIONS OF THE CO-ORDINATE BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR A.Y. 2006-07 IN ITA NO.8846/M /10, FOR A.Y. 2007-08 IN ITA NO.4631/M/11 AND FOR A.Y. 2009 -10 IN ITA NO.107/M/13. THE LD. A.R. PRAYED BEFORE THE BENCH THAT IN VIEW OF THE ISSUE BEING COVERED IN FAVOUR OF THE ASSESSEE THE GROUND RAISED BY THE ASSESSEE MAY KINDLY BE ALL OWED. 4. THE LD. D.R., ON THE OTHER HAND, OBJECTED TO THE ARGUMENT OF THE LD. A.R. BY SUBMITTING THAT THE MISCE LLANEOUS INCOME WHICH ARE IN THE NATURE OF SUNDRY BALANCES W RITTEN BACK, LEGAL EXPENSES RECOVERED ETC. ARE NOT DIRECTLY CONNECTED WITH THE EXPORT ACTIVITY OF THE ASSESSEE AND THEREF ORE CAN NOT BE CONSIDERED AS DERIVED FROM THE ACTIVITY OF THE E XPORT BUSINESS OF THE ASSESSEE. THE LD. D.R. SUBMITTED THA T THE LD. CIT(A) RIGHTLY DISALLOWED THE CLAIM OF THE ASSESSEE BY UPHOLDING THE ORDER OF AO ON THIS ISSUE. THE LD. D.R. SUBMITTED THAT AS PER THE SECTION 10B OF THE ACT TH ERE HAS BEEN DIRECT NEXUS WITH THE EXPORT ORIENTED ACTIVITY WHICH DOES NOT EXIST IN THE PRESENT CASE AND THEREFORE THE APP EAL OF THE ASSESSEE SHOULD BE DISMISSED. THE LD. D.R. IN DEFENC E OF HIS ARGUMENTS RELIED ON THE DECISIONS OF CIT VS. STERLIN G FOODS (1999) 104 TAXMAN 204 (SC), LIBERTY INDIA VS. CIT (2 009) 183 TAXMAN 349 (SC) AND PANDIAN CHEMICALS LTD. VS. CIT ( 2003) 129 TAXMAN 539 (SC). 5. WE HAVE HEARD THE RIVAL SUBMISSIONS OF BOTH THE P ARTIES AND PERUSED THE MATERIAL ON RECORD. WE FIND FROM TH E PERUSAL OF THE DECISIONS OF CO-ORDINATE BENCHES OF THE TRIB UNAL IN ASSESSEES OWN CASE FOR A.Y. 2006-07 IN ITA NO.8846/M /10, ITA NO.22/M/2014 M/S. SULPHUR MILLS LTD. 4 FOR A.Y. 2007-08 IN ITA NO.4631/M/11 AND FOR A.Y. 2009 -10 IN ITA NO.107/M/13 THAT THE IDENTICAL ISSUE WAS INVOLV ED IN THOSE YEARS WHICH WAS DECIDED BY THE CO-ORDINATE BENCHES IN FAVOUR OF THE ASSESSEE. THE OPERATIVE PART OF THE DECISIO N IN ITA NO.8846/M/10 FOR A.Y. 2006-07 WHICH IS REPRODUCED BE LOW: 5.GR.NO.2 IS ABOUT DEDUCTION U/S.1013 OF THE ACT. DURING THE ASSESSMENT PROCEEDINGS, THE AO FOUND THAT THE ASSESSEE HAD CLA IMED DEDUCTION U/S. I OB IN RESPECT OF EOU AT PANOLI AMOUNTING TO RS.5.89 CRORE S, THAT IT HAD EARNED INTEREST IN THE EOU UNDER THE HEADS INTEREST RECEIVED FOR CUSTO MERS(RS.12,648/-), LNTEREST ON FDR WITH BANK OF INDIA (RS.3 1.97 LACS) AND INTERES T ON DEPOSITS(RS. 11.93 LACS). HE DIRECTED THE ASSESSEE TO EXPLAIN AS TO WHY DEDUCTIO N U/S. 10B IN RESPECT OF INTEREST INCOME SHOULD NOT BE DISALLOWED. AFTER CON SIDERING THE SUBMISSION OF THE ASSESSEE, THE AO HELD THAT THE INTEREST RECEIPTS WE RE NOT DERIVED FROM EXPORTS. HE REFERRED TO THE CASES OF CAMBAY ELECTRICAL SUPPL Y INDUSTRIAL COMPANY. LTD. (113 ITR 84), STERLING FOODS AND PANDIYAN CHEMICALS LTD. (233 ITR 497),THAT THE INTEREST INCOME COULD AT BEST BE SAID TO HAVE BEEN ATTRIBUTABLE TO THE EXPORT, THAT SAME WAS NOT DERIVED FROM THE BUSINESS OF THE ASSESSEE, THAT GROSS INTEREST RECEIPTS WERE TO BE DISALLOWED FOR CALCULA TING THE DEDUCTION U/S. LOB OF THE ACT. FOR THE SIMILAR REASONS INCOMES CREDITED U NDER THE HEAD 'CSD REFUND RECEIPT(RS.9. 31 LACS), HANDLING CHARGES(RS. 1.79 L ACS), CHEQUE BOUNCING CHARGES(RS. 1 .37 LACS), MISCELLANEOUS INCOME(RS.50 ,398/-) AND SUNDRY BALANCES WRITTEN BACK (RS.4,00,738/-) WERE HELD NOT TO BE ELIGIBLE FOR DEDUCTION U/S.1OB.HE WAS OF THE OPINION THAT THE INCOMES CRED ITED UNDER ABOVE MENTIONED FIVE HEADS WERE NOT DERIVED FROM THE EOU.AS A RESUL T, HE MADE A FURTHER ADDITION OF RS. 16.99 LACS. 5.1. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY(FAA).AFTER CON SIDERING THE SUBMISSION OF THE ASSESSEE AND THE ASSESS - MENT ORDER,THE FAA HE LD THAT THE INTEREST ON DEPOSIT WITH BANK FOR OPENING LOC WAS NOT DERIVED F ROM INDUSTRIAL UNDERTAKING AND WAS NOT ELIGIBLE FOR DEDUCTION U/S. 10B. HE REF ERRED TO THE CASE OF MENON IMPEX PVT. LTD. 259 ITR 403.HE ALSO REFERRED TO THE CASE OF KK DOSHI (245 ITR 849);CJ INTERNATIONAL( 1 3SOT 280);ORCHID CHEMICALS AND PHARMACEUTICALS (97 ITD 277), SOVIKA INFOTECH LTD.(1950T412) AND HELD T HAT TO CLAIM DEDUCTION U/S. 10B OF THE ACT, THE INCOME SHOULD HAVE BEEN DERIVED FROM THE EXPORT ACTIVITY OF THE UNDERTAKING, THAT THE AO HAD RIGHTLY DISALLOWED THE CLAIM MADE BY THE ASSESSEE. 5.2. DURING THE COURSE OF HEARING BEFORE US THE AR CONTENDED THAT SECTION 10B WAS A SELF CONTAINING CODE,THAT NO ADJUSTMENT W AS PERMISSIBLE WHILE CALCULATING DEDUCTION U/S 10B.HE REFERRED TO THE CA SES OF ADVANCE DETERGENT LTD.( 188 TAXMANN 15), NIRMA INDUSTRIES LTD (153 TA XMANN 550); HRITNIK EXPORTS P.LTD.(IT APPEAL NO.219 AND 239 OF 2014);MOTOROLA I NDIA ELECTRONICS(46 TAXMANN .COM 167); TECHNOCRAFT INDUSTRIES(INDIA)LTD.(43 TAX MANN.CORN.1 10); EMPIRE PUMPS PVT.LTD.(IT APPEAL NO.187 OF 2003);LUBRIZOL A DVANCE MATERIALS INDIA (P.) ITA NO.22/M/2014 M/S. SULPHUR MILLS LTD. 5 LTD.(42TAXMANN.COM.263),GEM PLUS JEWELLERY INDIA LT D(233CTR240). WITH REGARD TO OTHER FIVE ITEMS THE AR ARGUED THAT THE A O COULD NOT MAKE ANY ADJUSTMENT WHILE COMPUTING THE INCOME AS PER THE PR OVISION OF SECTION 10B, THAT THE INCOME WAS ASSESSED AS BUSINESS INCOME, TH AT SAME COULD NOT BE ASSESSED AS INCOME FROM OTHER SOURCES, THAT THE PRO VISIONS OF SECTION 10B PROVIDED STRAIGHT JACKET FORMULA AND SAME HAD TO BE APPLIED. HE REFERRED TO THE ORDER OF CENTURY TEXTILES AND INDUSTRIES LTD. (1TA 3926/MUM/2005-AY01-02 DATED 16.5.2012), ARVIND FOOTWEAR (ITA 363/LUCK/201 0 ORDER DT.27.8.13),TESSITURA MONTI INDIA(P) LTD. (ITA/7127 /MUM/2010 AY05-06, DT. 11.01. 2013).DR SUPPORTED THE ORDER OF THE FAA. THE DEPARTMENTAL REPRESENTATIVE (DR) SUPPORTED THE ORDER OF THE FAA. 5.3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSE D THE MATERIAL BEFORE US.WE FIND THAT THE AO HAD MADE THE DISALLOWANCE AS HE WAS OF THE OPINION THAT THE INCOME EARNED BY THE UNDER VARIOUS HEADS WAS NO T DERIVED FROM THE ACTIVITIES OF THE INDUSTRIAL UNDERTAKING-THOUGH IT COULD BE ATTRIBUTABLE TO THE BUSINESS ACTIVITIES OF THE ASSESSEE. WE FIND THAT T HE ISSUE OF INTEREST INCOME ACCRUING TO THE ASSESSEE HAS BEEN DEALT WITH BY THE HON'BLE COURTS. THEY HAVE HELD THAT INTEREST RECEIVED FOR CUSTOMERS, INTEREST ON FDR WITH BANKS AND INTEREST ON DEPOSITS HAS TO BE TAKEN AS PART OF THE BUSINESS INCOME OF THE ASSESSEE AND IS ENTITLED FOR 1013 DEDUCTION. WE WOU LD LIKE TO REFER TO THE CASES OF ADVANCE DETERGENT LTD.(SUPRA), NIRMA INDUSTRIES LTD (SUPRA); HRITNIK EXPORTS P. LTD. (SUPRA);MOTOROLA INDIA ELECTRONICS (SUPRA); TECHNOCRAFT INDUSTRIES(INDIA)LTD.(SUPRA); EMPIRE PUMPS PVT. LTD . (SUPRA);LUBRIZOL ADVANCE MATERIALS INDIA (P.)LTD.(SUPRA) IN OUR SUPPORT. NOW , COMING TO THE OTHER FIVE ITEMS OF INCOME WE WOULD LIKE TO MENTION THAT THE A O IS NOT PERMITTED TO MAKE ANY ADJUSTMENTS WHILE COMPUTING THE DEDUCTION U/S. 10 A OR 10B OF THE ACT. HERE, WE WOULD LIKE TO REPRODUCE RELEVANT PORTION O F THE ORDER OF TESSITURA MONTI INDIA(P) LTD.(SUPRA) AND SAME READS AS UNDER: '4.3 IT WOULD, THUS, APPEAR TO US THAT THE PROCESS OF DETERMINATION OF QUANTUM OF PROFITS DERIVED BY A 100% E.O.U. FROM TH E RELEVANT EXPORTS WOULD INVOLVE THREE STEPS. THE SECTION APPLIES ONLY TO AN ELIGIBLE UNDERTAKING, I.E., A 100% E.O.U., RECEIVING EXPORT PROCEEDS IN CONVERTIBLE FOREIGN EXCHANGE. AS SUCH, THE FIRST STEP WOULD BE TO ASCERTAIN IF THE ASSESSEE'S UNDERTAKING IS AN ELIGIBLE UNDERTAKING U /S.10B. THE PROFITS OF THE BUSINESS OF THE UNDERTAKING WOULD BE REQUIRED T O BE COMPUTED AS THE SECOND STEP, WHICH REPRESENTS THE MOST CRUCIAL STEP. THIS IS AS IT PROVIDES FOR THE PROFITS DERIVED BY AN UNDERTAKING FROM THE EXPORT OF ARTICLES OR THINGS OR COMPUTER SOFTWARE TO BE THE P ROFITS OF THE BUSINESS OF THE UNDERTAKING IN A DEFINED RATIO, I.E., THAT O F 'ET' TO 'TT'. THE EXPRESSION 'PROFIT OF THE BUSINESS OF THE UNDERTAKI NG' IS NOT DEFINED UNDER THE PROVISION. ONE THING, HOWEVER, IS CLEAR; THAT THE THIRD STEP, I.E., THE ADJUSTMENT BY WAY OF APPORTIONMENT OF SUCH PROF IT IN THE RATIO OF 'ET' TO 'TT' IS TOWARD FURTHER LIMITING THE PROFITS OF T HE BUSINESS OF THE UNDERTAKING TO THAT DERIVED FROM EXPORTS ONLY. THIS IS AS THE ELIGIBLE PROFITS MUST BE FIRSTLY DERIVED BY THE UNDERTAKING AND, SECONDLY, FROM ITS EXPORTS (S. 10B(1)). AND IT IS THIS, THE THIRD STEP , THAT SEC. 1OB(4) IS TOWARD. ALSO, AS A 100% E.O.0 IS LICENSED TO UNDERT AKE ONLY EXPORTS, THE ITA NO.22/M/2014 M/S. SULPHUR MILLS LTD. 6 OTHER ELEMENT OF TT WOULD NORMALLY INCLUDE EITHER T HE EXPORT PROCEEDS THAT ARE NOT BROUGHT INTO INDIA WITHIN SIX MONTHS ( OR SUCH EXTENDED PERIOD AS MAY BE ALLOWED) OR THE SALE PROCEEDS OF A PART OF ITS PRODUCTION THAT IT COULD UNDER THE TERMS OF THE 100% EOU LICEN SE SELL IN THE DOMESTIC MARKET, OR THE SALE OF OTHER PRODUCTS (OF THE ASSESSEE'S UNDERTAKING) WHICH ARISE INCIDENTALLY TO ITS OPERAT IONS IN THE DOMESTIC MARKET. IN FACT, THE SECOND PROVISO TO THE PROVISIO N IS ONLY BY FINANCE ACT 2002, W.E.F. 011412003; ITS EARLIER VERSION, SINCE OMITTED, BEARING A TOLERANCE OF UP TO 25% OF THE TOTAL SALES FOR DOMES TIC TURNOVER. COMING TO THE SECOND STEP AFORE-SAID, THE WORDS 'BUSINESS OF THE UNDERTAKING' ARE WIDER IN AMBIT THAN THE WORDS 'PROFIT OF THE UNDERT AKING' AND COULD ONLY HAVE BEEN SO PROVIDED WITH A PURPOSE. IN OUR CONSID ERED VIEW, THEREFORE, ANY PROFIT WHICH IS DERIVED FROM THE BUSINESS OF TH E ASSESSEE'S UNDERTAKING WOULD QUALIFY TO BE THE PROFITS OF THE BUSINESS OF THE UNDERTAKING, AND UPON SUITABLE APPORTIONMENT TOWARD EXCLUDING AS MUCH OF IT AS CAN BE REGARDED AS ATTRIBUTABLE TO THE DOM ESTIC TURNOVER OR NON- QUALIFIED EXPORTS, CAN BE SAID TO BE THE PROFITS DE RIVED BY THE 100% E.O.0 FROM EXPORTS, AS CONTEMPLATED IN SECTION 1OB(1), AN D ON WHICH DEDUCTION THERE-UNDER IS TO BE ALLOWED. ALL THAT WA S REQUIRED, IF NOT SO, WAS TO DEFINE THE PROFITS OF THE BUSINESS TO MEAN T HE PROFITS OF THE ELIGIBLE BUSINESS AS COMPUTED UNDER THE HEAD 'PROFI TS AND GAINS OF BUSINESS OR PROFESSION'. IN OTHER WORDS, THE WORD ' DERIVED' WOULD CONTINUE TO CONTROL OR GUIDE THE WORD 'PROFITS' IN THE DEDUCTION PROVISION, BUT THE ACTIVITY FROM WHICH THE SOME ARE DERIVED IS THE ECONOMIC ACTIVITY THAT COMPRISES THE BUSINESS OF THE ELIGIBLE UNDERTA KING, RATHER THAN BEING RESTRICTED STRICTLY TO THE ELIGIBLE UNDERTAKING. AS SUCH, AS LONG AS A RECEIPT IS INTIMATELY AND INEXTRICABLY CONNECTED WITH THE ' BUSINESS OF THE UNDERTAKING', IT CANNOT BE EXCLUDED IN RECKONING TH E ELIGIBLE PROFITS U/S. 10B(1).' CONSIDERING THE ABOVE, WE DECIDE GROUND NO.2 IN FAV OUR OF THE ASSESSEE. 6. IN THE SUBSEQUENT YEAR I.E. A.Y. 2007-08 AND 2009-10 THE CO-ORDINATE BENCH HAS FOLLOWED THE DECISION OF THE CO- ORDINATE BENCH IN A.Y. 2006-07 AS REPRODUCED (SUPRA) . SINCE THE FACTS OF THE PRESENT CASE ARE MATERIALLY SAME A S INVOLVED IN ITA NO.8846/M/10 (SUPRA) AND THEREFORE FOLLOWING THE SAME, WE SET ASIDE THE ORDER OF LD. CIT(A) AND DIRE CT THE AO TO ALLOW THE CLAIM OF THE ASSESSEE IN RESPECT OF TH ESE INCOMES AS STATED HEREINABOVE. WE WOULD LIKE TO MENTION TH AT THE DECISIONS CITED BY THE LD. D.R. IN SUPPORT OF HIS AR GUMENTS ARE DISTINGUISHABLE ON FACTS AND NOT APPLICABLE TO THE PRESENT CASE ITA NO.22/M/2014 M/S. SULPHUR MILLS LTD. 7 AS ALL THESE DECISIONS ARE RENDERED WITH REFERENCE TO THE SECTION 80HH AND 80IB OR 80IA AND THEREFORE DISTING UISHABLE. ACCORDINGLY, THE GROUND RAISED BY THE ASSESSEE IS A LLOWED. 7. THE ISSUE RAISED IN SECOND GROUND OF APPEAL IS AG AINST THE CHARGING OF INTEREST UNDER SECTION 115P OF THE ACT TO THE TUNE OF RS.7,40,337/- WHICH WAS DISMISSED BY THE LD. CIT(A ) BY OBSERVING THAT AO HAS NOT CHARGED ANY INTEREST UNDE R SECTION 115P OF THE ACT AND DISMISSED THE GROUND IN LUMINI. 8. THE FACTS IN BRIEF ARE THAT AT THE TIME OF FRAMIN G THE ASSESSMENT A SUM OF RS.7,40,337/- WAS CHARGED AS INTER EST UNDER SECTION 115P OF THE ACT FOR LATE PAYMENT OF D IVIDEND DISTRIBUTION TAX. THE SAID INTEREST WAS CHARGED IN THE INCOME TAX COMPUTATION FORM WHICH WAS ATTACHED TO THE ORDE R UNDER SECTION 143(3) OF THE ACT AND WAS A COMPUTER GENERA TED FORM. IN THE APPELLATE PROCEEDINGS THE LD. CIT(A) DISMISSE D THE GROUND AS INFRUCTUOUS BY OBSERVING THAT AO HAS NOT CHARGED ANY INTEREST UNDER SECTION 115P OF THE ACT AS CLAIM ED BY THE ASSESSEE AND THUS DISMISSED THE APPEAL. 9. THE LD. A.R. VEHEMENTLY SUBMITTED BEFORE US THAT THE LD. CIT(A) GROSSLY ERRED IN DISMISSING THE ASSESSEES A PPEAL IN LUMINI BY IGNORING THE FACTS THAT THE ASSESSEE WAS WITHIN ITS RIGHT TO CHALLENGE THE INTEREST CHARGED UNDER SECTI ON 115P OF THE ACT ON THE LATE PAYMENT OF DIVIDEND DISTRIBUTIO N TAX AMOUNTING TO RS.55,28,898/-. THE LD. A.R. SUBMITTED THA T LD. CIT(A) HAS GROSSLY ERRED BY HOLDING THAT THE AO HAS NOT CHARGED ANY INTEREST UNDER SECTION 115P OF THE ACT WHEREAS AS ITA NO.22/M/2014 M/S. SULPHUR MILLS LTD. 8 A MATTER OF FACT IN THE COMPUTATION FORM THE TAX WA S CLEARLY CHARGED. THE ANOTHER CONTENTION OF THE ASSESSEE WA S THAT THE AO HAS NO JURISDICTION TO CHARGE INTEREST UNDER SEC TION 143(3) OF THE ACT AND THE SAME IS BAD IN LAW. THE ASSESSEE , WITHOUT PREJUDICE, HAS TAKEN ANOTHER GROUND THAT THE DELAY I N PAYMENT OF DIVIDEND DISTRIBUTION TAX WAS ONLY OF ONE DAY AN D THEREFORE THE INTEREST SHOULD BE CHARGED AT THE RATE OF 1% WH ICH COMES TO RS.55,289/- IN TERMS OF THE PROVISION OF SECTION 1 15O OF THE ACT. THE LD. A.R. FINALLY SUBMITTED THAT THE ISSUE BE RESTORED TO THE FILE OF THE AO WITH A DIRECTION TO RECALCULA TE THE INTEREST ONLY FOR THE PERIOD OF ONE MONTH. THE LD. A.R. ALSO T OOK US THROUGH THE NOTICE CALLING AGM ON 30.09.09 IN WHICH O NE OF THE ORDINARY BUSINESS TO BE TRANSACTED WAS TO DECLA RE THE DIVIDEND ON THE EQUITY SHARES. 10. THE LD. D.R., ON THE OTHER HAND, RELIED ON THE ORD ER OF AUTHORITIES BELOW. 11. HAVING HEARD BOTH THE PARTIES AND PERUSING THE MATERIAL ON RECORD, WE FIND THAT IN THIS CASE THE INTEREST WA S CHARGED TO THE TUNE OF RS.7,40,337/- ON A LATE PAYMENT OF DIVIDE ND DISTRIBUTION TAX OF RS.55,28,898/- WHICH WAS PAID LA TE BY ONE DAY ONLY IF THE DATE OF DECLARATION IS TAKEN UNDER SECTION 115O OF THE ACT. WE FURTHER FIND FROM THE PERUSAL OF SE CTION 115 O OF THE ACT THAT UNDER SECTION (3) THE PRINCIPAL OFF ICER OF A DOMESTIC COMPANY AND THE COMPANY ITSELF SHALL BE LI ABLE TO PAY TAX ON DISTRIBUTION PROFIT TO THE CREDIT OF CEN TRAL GOVERNMENT WITHIN 14 DAYS FROM THE DATE OF DECLARAT ION OF DIVIDEND OR DISTRIBUTION OF UNDIVIDEND OR PAYMENT O F ITA NO.22/M/2014 M/S. SULPHUR MILLS LTD. 9 UNDIVIDEND WHICHEVER IS EARLIEST. IN THE PRESENT C ASE, THE DIVIDEND WAS DECLARED ON 30.09.2009 AND THE TAX WAS PAID ON 15 TH OCTOBER 2009 WHEREAS THE DUE DATE WAS ON OR BEFORE 14.10.09 AND THUS THERE WAS A DELAY OF ONE DAY. SO I NTEREST HAS TO BE CHARGED FOR ONE MONTH OR PART OF THE MONT H AT THE RATE OF 1% WHICH COMES TO RS.55,289/-. CONSIDERING THESE FACTS, THERE IS A MERIT IN THE CONTENTIONS OF THE L D. A.R. THAT INTEREST SHOULD BE CHARGED AS PER THE PROVISIONS OF SECTION 115O OF THE ACT AND NOT RS.7,40,337/- AS HAS BEEN CHA RGED IN THE INCOME TAX COMPUTATION FORM. SO WE RESTORE THE ISSUE TO THE FILE OF THE AO WITH THE DIRECTION TO RECALCULAT E THE SAME IN TERMS OF SECTION 115 O OF THE ACT BY SETTING ASIDE THE ORDER OF THE LD. CIT(A) ON THIS ISSUE. 12. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 28.06.2018. SD/- SD/- (C.N. PRASAD) (RAJESH KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: .06.2018. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY /ASSTT. REGISTRAR, ITAT, MUMBAI.