NARAD IVESTMENTS & TRADING P. LTD, MUMBAI V. DCIT CIR 2(2), MUMBAI

ITA 3360/MUM/2010

• Counselvise Citation: 336019914 RSA 2010
• Duration Of Justice: 1 year(s) 5 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-10-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: H
• Next Hearing Date: 27-09-2011
• Assessment Year: 1996-1997
• Appeal Filed On: 29-04-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: V V SHASTRI
• Assessee Lawyers: JAYESH DADIA
• Keywords: Speculation loss
• Section: 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH H, MUMBAI BEFORE SHRI B.R. MITTAL, JUDICIAL MEMBER AND SHRI RAJENDRA SINGH, ACCOUNTANT MEMBER I.T.A. NO.3360/MUM/2010 (ASSESSMENT YEAR : 1996-97) M/S. NARAD INVESTMENTS & TRADING PVT. LTD., 31A NOMBLE CHAMBERS, 4 TH FLOOR, JANMABHOOMI MARG, FORT, MUMBAI-400 001 PAN AAACN1212C VS. DY . COMMISSIONER OF INCOME TAX , CIRCLE 2(2), AAYAKAR BHAVAN, M.K. ROAD, MUMBAI. APPELLANT RESPONDENT. APPELLANT BY : MR. JAYESH DADIA. RESPONDENT BY : MR. V.V. SHASTRI. DATE OF HEARING : 27.09.2011. DATE OF PRONOUNCEMENT : 19.10.2011. O R D E R. PER RAJENDRA SINGH, A.M : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DT.26.2.2010 OF COMMISSIONER OF INCOME TAX (APPEALS ) FOR THE ASSESSMENT YEAR 1996-97. THE ASSESSEE IN THIS APPEAL HAS RAISED DI SPUTES ON TWO DIFFERENT GROUNDS. 2 ITA NO.3360/MUM/2010 2. THE FIRST DISPUTE IS REGARDING THE DECISION OF A .O. TREATING THE LOSS FROM PURCHASE AND SALE OF SHARES AS SPECULATION LOSS IN PLACE OF BUSINESS LOSS DECLARED BY THE ASSESSEE. THE A.O. DURING THE ORIGINAL ASSESSM ENT PROCEEDINGS NOTED THAT THE ASSESSEE HAD INCURRED LOSS OF RS.1,37,83,962 FROM T RADING IN SHARES WHICH HAD BEEN DECLARED AS BUSINESS LOSS. THE ASSESSING OFFIC ER ASKED THE ASSESSEE AS TO WHY THE LOSS SHOULD NOT BE TREATED AS SPECULATION LO SS UNDER THE PROVISIONS OF EXPLANATION TO SECTION 73. THE ASSESSEE EXPLAINED THAT THE INCOME OF THE ASSESSEE MAINLY CONSISTED OF DIVIDEND, PROFIT ON SAL E OF INVESTMENT AND OTHER INCOME AND THEREFORE THE PROVISIONS OF EXPLANATION TO SECTION 73 WERE NOT APPLICABLE. THE DETAILS OF INCOME WAS GIVEN BY THE A SSESSEE AS UNDER : I) DIVIDEND RS. 23,47,650 II) PROFIT ON SALE OF INVESTMENT RS. 85,38,736 III) MISC. INCOME RS. 22,898 TOTAL : RS.1,09,09,284 2.1 THE A.O. DID NOT ACCEPT THE EXPLANATION G IVEN BY THE ASSESSEE. IT WAS OBSERVED BY HIM THAT TOTAL TURNOVER IN PURCHASE AND SALE OF SHARES OF THE ASSESSEE WAS RS.9.37 CRORES AND THEREFORE THE MAIN ACTIVITY O F THE ASSESSEE WAS TRADING IN SHARES AND A.O. THUS CONCLUDED THAT THE PROVISIONS OF EXPLANATION TO SECTION 73 WERE APPLICABLE IN THE CASE OF ASSESSEE. THE A.O. FURTHER OBSERVED THAT THE 3 ITA NO.3360/MUM/2010 ASSESSEE HAD INCURRED TOTAL GENERAL EXPENSES OF RS. 5,85,248. HE ATTRIBUTED SUCH EXPENSES TO TRADING OF SHARES IN THE RATIO OF TRADI NG TURNOVER TO TOTAL RECEIPTS OF BUSINESS (RS.14.71 CRORES) WHICH CAME TO RS.3,72,67 1. HE, THEREFORE COMPUTED THE LOSS FROM TRADING OF SHARES AT RS.1,41,56,633 (1,37 ,83,962 + 3,72,671) WHICH WAS TREATED AS SPECULATION LOSS WHICH WAS SET OFF AGAIN ST SPECULATION PROFIT OF RS.21,615 AND THE BALANCE SPECULATION LOSS OF RS.1, 41,34,958 WAS NOT SET OFF AGAINST INCOME FROM ANY OTHER HEAD AND ALLOWED TO BE CARRY-F ORWARD. 2.2 IN APPEAL, THE CIT(A) CONFIRMED THE ORDE R OF ASSESSING OFFICER. IN FURTHER APPEAL BY THE ASSESSEE, THE TRIBUNAL RESTORE D THE ISSUE TO THE FILE OF A.O. FOR DECIDING THE ISSUE AFRESH AFTER EXAMINING THE F ACTS OF THE CASE IN THE LIGHT OF DECISION OF TRIBUNAL IN THE CASE OF ACIT VS. CONCOR D COMMERCIAL P. LTD IN ITA NO.5220/BOM/94 DT.28.1.2005 AND THE JUDGMENT OF HON BLE HIGH COURT OF CALCUTTA IN THE CASE OF EASTERN AVIATION & INDUSTRIES VS. CIT (208 ITR 1023). 2.3 IN THE FRESH ASSESSMENT ORDER, THE A.O. AGAIN TREATED THE LOSS FROM TRADING OF SHARES AS SPECULATION LOSS AFTER OBSERVI NG THAT THE DECISION OF THE TRIBUNAL IN THE CASE OF M/S. CONCORD COMMERCIAL P. LTD. (SUPRA) HAD NOT BEEN ACCEPTED BY THE DEPARTMENT. THE ASSESSEE APPEALED TO CIT(A) WHO ON EXAMINATION OF RECORDS OBSERVED THAT WHILE CONSIDERING THE GROS S TOTAL INCOME, THE LOSS FROM A 4 ITA NO.3360/MUM/2010 PARTICULAR SOURCE WAS ALSO REQUIRED TO BE CONSIDERE D BEING THE NEGATIVE INCOME. FOR THE SAID PROPOSITION, HE PLACED RELIANCE ON THE JUDGMENT OF HONBLE HIGH COURT OF CALCUTTA IN THE CASE OF CIT VS. PARK VIEW PROPER TIES PVT. LTD. (261 ITR 473) AND THE DECISION OF MUMBAI BENCH OF TRIBUNAL IN CASE OF MAFATLAL SECURITIES LTD VS. JCIT (21 SOT 245) (MUM) AND SEVERAL OTHER JUDGMEN TS. HE ALSO REFERRED TO THE DECISION OF SPECIAL BENCH OF AHMEDABAD BENCH IN CAS E OF GUJARAT CREDIT CORPORATION LTD. VS. ACIT (113 ITD 133) IN WHICH, SINCE MAJOR INVESTMENT WAS IN SHARES, IT WAS HELD THAT THE PRINCIPAL BUSINESS WAS SHARE INVESTMENT AND NOT OF GRANTING LOANS AND ADVANCES AND THEREFORE EXPLANATI ON TO SECTION 73 WAS ATTRACTED. THE SPECIAL BENCH HAD CONSIDERED THE DECISION OF TH E TRIBUNAL IN CASE OF CONCORD COMMERCIAL PVT. LTD. (SUPRA). THE CIT(A) NOTED THA T LOSS FROM SHARE TRADING WAS MUCH MORE THAN INCOME FROM OTHER SOURCES AND THEREF ORE HELD THAT EXPLANATION TO SECTION 73 WAS APPLICABLE IN THIS CASE AND ACCORDIN GLY UPHELD THE ORDER OF A.O. TREATING THE LOSS AS SPECULATION LOSS. AGGRIEVED B Y THE SAID DECISION, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 2.4 WE HAVE HEARD BOTH THE PARTIES, PERUSED THE RECORDS AND CONSIDERED THE RIVAL CONTENTIONS CAREFULLY. THE DISPUTE IS REGARDI NG NATURE OF INCOME FROM PURCHASE AND SALE OF SHARES UNDER THE PROVISIONS OF EXPLANATION TO SECTION 73. AS 5 ITA NO.3360/MUM/2010 PER THE SAID EXPLANATION, THE CASE OF COMPANY WHOSE GROSS TOTAL INCOME DOES NOT CONSIST MAINLY OF INCOME CHARGEABLE UNDER THE HEAD INCOME FROM HOUSE PROPERTY, CAPITAL GAIN AND INCOME FROM OTHER SOURCES OR T HE PRINCIPAL BUSINESS OF WHICH IS NOT GRANTING LOANS OR ADVANCES, IF ANY PART OF BUSIN ESS OF THE COMPANY CONSISTS OF PURCHASE AND SALE OF SHARES OF OTHER COMPANIES, THE N, SUCH COMPANY IS DEEMED TO BE CARRYING ON SPECULATION BUSINESS TO THE EXTENT TO WHICH THE BUSINESS CONSISTS OF PURCHASE AND SALE OF SHARES. IN THIS CASE, THE ASS ESSEE HAD LOSS FROM PURCHASE AND SALE OF SHARES OF RS.1,41,34,958. THE ASSESSEE ALS O HAD INCOME FROM CAPITAL GAIN AND OTHER SOURCES TOTALING TO RS.70,06,755. IT IS A SETTLED LEGAL POSITION THAT LOSS IS ALSO NEGATIVE INCOME AND THEREFORE WHILE CONSIDE RING THE GROSS TOTAL INCOME LOSS HAS TO BE CONSIDERED IN ABSOLUTE FIGURE. THE INCOM E FROM SHARE TRADING (IN ABSOLUTE FIGURE) INCLUDED IN GROSS TOTAL INCOME IS MORE THAN INCOME FROM CAPITAL GAIN AND OTHER SOURCES. THEREFORE THE PROVISIONS O F EXPLANATION TO SECTION 73 WILL BE APPLICABLE IN THIS CASE. THIS VIEW IS SUPPORTED BY THE JUDGMENT OF HONBLE HIGH COURT OF CALCUTTA IN CASE OF PARK VIEW PROPERTIES P VT. LTD. (SUPRA) AND THE DECISION OF SPECIAL BENCH OF TRIBUNAL IN CASE OF GUJARAT CRE DIT CORPORATION (SUPRA). THERE ARE SEVERAL OTHER DECISIONS OF THE TRIBUNAL ALSO IN WHICH THE SAME VIEW HAS BEEN FOLLOWED. IN VIEW OF THE ABOVE POSITION, THE CLAIM OF THE ASSESSEE BASED ON THE 6 ITA NO.3360/MUM/2010 DECISION OF THE TRIBUNAL IN CASE OF CONCORD COMMERC IAL PVT. LTD. (SUPRA) CANNOT BE FOLLOWED. WE, THEREFORE, SEE NO INFIRMITY IN THE OR DER OF CIT(A) TREATING THE LOSS FROM SHARE TRADING AS SPECULATION LOSS AND THE SAME IS THEREFORE UPHELD. 3. THE SECOND DISPUTE IS REGARDING LEVY OF INTEREST U/S.220(2). THE SECTION 220(2) EMPOWERS THE A.O. TO LEVY INTEREST AT A SPECI FIED RATE IN CASE THE DEMAND AS PER THE DEMAND NOTICE ISSUED BY THE ASSESSING OFF ICER IS PAID IN TIME. IN THIS CASE, THE ORIGINAL ASSESSMENT WHICH HAD BEEN CONFIR MED BY CIT(A) WAS FINALLY SET ASIDE BY THE TRIBUNAL AND THE ISSUE WAS RESTORED TO THE A.O. IN THE FRESH ASSESSMENT, THE A.O. REPEATED THE ADDITION RAISING THE SAME DEMAND BUT INTEREST U/S.220(2) WAS LEVIED FROM THE DATE OF DEMAND NOTIC E ISSUED AS PER THE ORIGINAL ASSESSMENT ORDER. THE A.O. THUS LEVIED INTEREST OF RS.44.91 LAKHS. THE ASSESSEE DISPUTED THE DECISION OF A.O. AND SUBMITTED APPEAL BEFORE THE CIT(A) THAT IN VIEW OF THE CBDT CIRCULAR NO.334 DT.3.4.1982, AS THE ORI GINAL ASSESSMENT HAD BEEN SET ASIDE BY TRIBUNAL, THE INTEREST U/S.220(2) COULD BE CHARGED ONLY FROM THE DATE WHEN THE DEMAND BECOME DUE AS PER THE FRESH ASSESSM ENT ORDER AND NOT FROM THE DATE OF ORIGINAL ASSESSMENT ORDER. THE CIT(A), HOW EVER, DID NOT ACCEPT THE CONTENTIONS RAISED BY THE ASSESSEE. IT WAS OBSERVED BY HIM THAT THE DEMAND CREATED AS PER THE ORIGINAL ASSESSMENT ORDER COULD NOT BE DEEMED TO HAVE BEEN 7 ITA NO.3360/MUM/2010 EXTINGUISHED BY VIRTUE OF APPEAL. FOR THE SAID PROPO SITION, HE PLACED RELIANCE ON THE JUDGMENT OF HONBLE HIGH COURT OF DELHI IN CASE OF BHARAT COMMERCE & INDUSTRIES LTD. VS. UNION OF INDIA (210 ITR 13) AND THE JUDGM ENT OF HONBLE HIGH COURT OF MADRAS IN CASE OF SUPER SPINNING (244 ITR 814). TH E CIT(A) ALSO REFERRED TO THE JUDGMENT OF HONBLE HIGH COURT OF MADHYA PRADESH IN CASE OF PITAMBER DAS DULI VS. UNION OF INDIA (148 CTR 352) IN WHICH IT WAS H ELD THAT WHEN THE ORIGINAL ORDER OF THE A.O. WAS UPHELD BY THE TRIBUNAL THOUGH IT MI GHT HAVE BEEN SET ASIDE, THE INTEREST WOULD DATE BACK TO THE ORIGINAL ORDER. TH E CIT(A), THEREFORE, CONFIRMED THE ORDER OF THE A.O. LEVYING THE INTEREST FROM THE DATE OF DEMAND CREATED AS PER THE ORIGINAL ASSESSMENT ORDER. AGGRIEVED BY SAID DECISION, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 3.1 BEFORE US, THE LEARNED A.R. FOR THE ASSESSEE SU BMITTED THAT THE ISSUE WAS COVERED IN FAVOUR OF THE ASSESSEE BY THE CIRCULAR NO .334 DT.3.4.1984 OF CBDT IN WHICH IT HAS BEEN HELD THAT WHEN THE TRIBUNAL RESTO RED THE ISSUE TO THE FILE OF A.O., INTEREST CANNOT BE LEVIED FROM THE DATE OF OR IGINAL ASSESSMENT ORDER. IT WAS ALSO ARGUED THAT THE JUDGMENTS RELIED UPON BY THE CI T(A) WERE DISTINGUISHABLE AND NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. T HE LEARNED D.R. PLACED RELIANCE ON THE ORDER OF CIT(A). 8 ITA NO.3360/MUM/2010 3.2 WE HAVE PERUSED THE RECORDS AND CONSIDERED THE RIVAL CONTENTIONS CAREFULLY. THE DISPUTE IS REGARDING LEVY OF INTEREST U/S. 220(2 ) OF THE INCOME TAX ACT, 1961. UNDER THE SAID SECTION, INTEREST AT A SPECIFIED RATE IS CHARGEABLE IN CASE THE DEMAND RAISED ON THE ASSESSEE AS PER THE DEMAND NOT ICE IS NOT PAID WITHIN THE TIME ALLOWED IN THE NOTICE. THE ISSUE RAISED IN THIS GR OUND IS AS TO WHEN THE ORIGINAL ASSESSMENT HAS BEEN SET ASIDE BY TRIBUNAL AND FRESH ASSESSMENT HAS BEEN MADE BY THE A.O., THE PERIOD FOR LEVY OF INTEREST U/S.220(2) SHOULD BE RECKONED FROM THE DATE OF DEFAULT AS PER THE ORIGINAL ASSESSMENT ORDE R OR AS PER THE FRESH ASSESSMENT ORDER. WE FIND THAT THIS ISSUE HAS ALRE ADY BEEN EXAMINED BY THE CBDT WHO HAD CLARIFIED THE ISSUE VIDE CIRCLE NO.334 DT.3 .4.1982, THE RELEVANT PORTION OF WHICH IS REPRODUCED BELOW FOR READY REFERENCE : (2) THESE ISSUES WERE COMPREHENSIVELY EXAMIN ED IN CONSULTATION WITH THE MINISTRY OF LAW AND THE BOARD HAS BEEN ADVISED : (I) WHERE AN ASSESSMENT ORDER IS CANCELLED UNDER SECTIO N 146 OR CANCELLED / SET ASIDE BY AN APPELLATE / REVISIONAL AUTHORITY AND THE CANCELLATION / SETTING ASIDE BECOMES FINAL (I.E. IT IS NOT VARIED AS A RESULT OF FURTHER APPEALS / REVISIONS), NO INTEREST UNDER SECTION 220 (2) CAN BE CHARGED PURSUANT TO THE ORIGINAL DEMAND NOTICE. THE NECESS ARY COROLLARY OF THIS POSITION WILL BE THAT EVEN WHEN THE ASSESSMENT IS R EFRAMED, INTEREST CAN BE CHARGED ONLY AFTER THE EXPIRY OF 35 DAYS FROM THE D ATE OF SERVICE OF DEMAND NOTICE PURSUANT TO SUCH FRESH ASSESSMENT ORD ER. (II) WHERE THE ASSESSMENT MADE ORIGINALLY BY THE INCOME TA X OFFICER IS EITHER VARIED OR EVEN SET ASIDE BY ONE APPELLATE AUT HORITY BUT, ON FURTHER 9 ITA NO.3360/MUM/2010 APPEAL, THE ORIGINAL ORDER OF THE INCOME TAX OFFICE R IS RESTORED EITHER IN PART OR WHOLLY, THE INTEREST PAYABLE UNDER SECTION 22 0(2) WILL BE COMPUTED WITH REFERENCE TO THE DUE DATE RECKONED FR OM THE ORIGINAL DEMAND NOTICE AND WITH REFERENCE TO THE TAX FINALLY DETERMINED. THE FACT THAT DURING AN INTERVENING PERIOD, THERE WAS N O TAX PAYABLE BY THE ASSESSEE UNDER ANY OPERATIVE ORDER WOULD MAKE NO DIF FERENCE TO THIS POSITION. (3) THE FOREGOING LEGAL POSITION WILL APPL Y MUTATIS MUTANDIS TO THE PROCEEDINGS UNDER OTHER DIRECT TAXES ALSO. 3.3 IN VIEW OF THE CIRCULAR NO.334 DT.3.4.1982 OF C BDT, IN CASE, THE ASSESSMENT IS SET ASIDE BY CIT(A) AND SETTING ASIDE BECOME FINA L, INTEREST UNDER SECTION 220(2) HAS TO BE CHARGED ONLY AFTER EXPIRY OF 35 DAYS FROM THE DATE OF SERVICE OF DEMAND NOTICE PURSUANT TO THE FRESH ASSESSMENT ORDE R. BUT IN CASE THE ORDER OF CIT(A) IS SUBJECT MATTER OF FURTHER APPEAL AND THE TRIBUNAL HAS RESTORED THE ORDER OF ASSESSING OFFICER EITHER IN PART OR WHOLLY, THE INTEREST PAYABLE UNDER SECTION 220(2) WILL BE COMPUTED WITH REFERENCE TO T HE DUE DATE RECKONED FROM ORIGINAL DEMAND NOTICE AND WITH REFERENCE TO THE TA X FINALLY DETERMINED IN THE ASSESSMENT. IN THE PRESENT CASE, THE ORIGINAL ORDE R OF ASSESSMENT WAS CONFIRMED BY CIT(A) BUT ON FURTHER APPEAL, THE TRIBUNAL SET AS IDE THE ORDER OF CIT(A) AND THE ISSUE RESTORED TO THE ASSESSING OFFICER. THERE FORE IN TERMS OF THE CIRCULAR OF CBDT (SUPRA), THE INTEREST UNDER SECTION 220(2) HAS TO BE CHARGED ONLY IN 10 ITA NO.3360/MUM/2010 RESPECT OF DEMAND RAISED AS PER THE FRESH ASSESSMEN T ORDER. THE CIT(A) FOLLOWING CERTAIN JUDGMENTS HAS HELD THAT INTEREST UNDER SECTION 220(2) HAS TO BE LEVIED FROM DATE OF DEFAULT OF DEMAND NOTICE ISSUED AS PER THE ORIGINAL ASSESSMENT ORDER. WE HAVE PERUSED THE JUDGMENTS CITED BY CIT(A ) AND THE SAME ARE FOUND TO BE DISTINGUISHABLE. IN CASE OF PITAMBER DAS DULI ( SUPRA), HON'BLE HIGH COURT OF MADHYA PRADESH HAS HELD THAT IN CASE THE ORDER OF CI T(A) IS SET ASIDE AND THE ORDER OF ASSESSING OFFICER IS RESTORED, THEN, THE D EMAND RAISED ON THE BASIS OF ORIGINAL ASSESSMENT ORDER WILL GET REVIVED AND THE ASSESSEE IS LIABLE TO PAY INTEREST ON THAT DEMAND FROM THE DATE OF ORIGINAL ORDER. OB VIOUSLY, THE CASE IS NOT APPLICABLE TO THE PRESENT SITUATION AS THE ASSESSME NT ORDER IN THIS CASE HAS NOT BEEN RESTORED BY THE TRIBUNAL BUT THE MATTER HAS BEE N SENT BACK TO THE ASSESSING OFFICER FOR FRESH ASSESSMENT AND THEREFORE THE DEMA ND IN TERMS OF THE CIRCULAR OF CBDT HAS TO BE LEVIED FROM THE DATE OF THE FRESH ASSESSMENT ORDER. SIMILARLY, IN THE CASE OF SUPER SPINNING (SUPRA), THE ADDITION MADE BY ASSESSING OFFICER IN ASSESSMENT HAD BEEN DELETED BY CIT(A) BUT ON FURTHER APPEAL, THE TRIBUNAL SET ASIDE THE ORDER OF CIT(A) WHICH MEANT THAT THE ORDE R OF ASSESSING OFFICER WAS RESTORED. IT WAS THEREFORE HELD BY THE HON'BLE HIGH COURT OF MADRAS THAT THE ORIGINAL ASSESSMENT GOT REVIVED DUE TO THE ORDER OF TRIBUNAL AND THE INTEREST 11 ITA NO.3360/MUM/2010 UNDER SECTION 220(2) WOULD BE LEVIED FROM THE DATE OF ORIGINAL ASSESSMENT ORDER. THIS IS THE POSITION AS PER THE CBDT CIRCULAR ALSO ON WHICH THE ASSESSEE HAS RELIED. SIMILARLY, THE JUDGMENT OF HON'BLE HIGH COURT OF DEL HI IN CASE OF BHARAT COMMERCE & INDUSTRIES LTD. (SUPRA) IS ALSO DISTINGUISHABLE. IN THAT CASE, AS PER THE ORIGINAL ASSESSMENT UNDER SECTION 143(3), THERE WAS NO DEMAN D RAISED AND SUBSEQUENTLY ORDER UNDER SECTION 154 WAS PASSED RAISING DEMAND O F RS.1,24,56,311 WHICH INCLUDED INTEREST UNDER SECTION 220(2) OF RS.11,83, 631 CHARGED FROM THE DATE OF DEFAULT AS PER THE ORIGINAL ASSESSMENT ORDER. THE DEMAND HAD ARISEN VIDE ORDER UNDER SECTION 154 AND THEREFORE IT WAS HELD BY THE HON'BLE HIGH COURT THAT INTEREST UNDER SECTION 220(2) WILL BE CHARGED FROM DATE OF DEFAULT AS PER THE DEMAND NOTICE ISSUED PURSUANT TO SECTION 154 ORDER. THE SAID JUDGMENT IS THEREFORE NOT APPLICABLE TO THE FACTS OF THE PRESEN T CASE IN WHICH THE ORIGINAL ASSESSMENT ORDER HAS BEEN SET ASIDE BY THE TRIBUNAL AND MATTER RESTORED TO THE ASSESSING OFFICER FOR FRESH ASSESSMENT AND THEREFOR E IN VIEW OF THE CIRCULAR OF CBDT (SUPRA), THE INTEREST CAN BE LEVIED ONLY FROM T HE DATE OF DEFAULT OF THE DEMAND NOTICE ISSUED IN PURSUANCE OF THE FRESH ASSE SSMENT ORDER. THE ORDER OF CIT(A) HOLDING THAT INTEREST UNDER SECTION 220(2) H AS TO BE LEVIED FROM THE DATE 12 ITA NO.3360/MUM/2010 OF DEFAULT AS PER THE ORIGINAL ASSESSMENT ORDER THE REFORE CANNOT BE SUSTAINED. THE SAME IS SET ASIDE AND THE CLAIM OF THE ASSESSEE IS ALLOWED. 4. IN THE RESULT THE APPEAL OF ASSESSEE IS PARTLY AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 19 .10.2011. SD/- SD/- (B.R. MITTAL) (R AJENDRA SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 19.10.2011. *REDDY GP COPY TO : 1. APPELLANT 2. RESPONDENT 3. C.I.T. 4. CIT(A) 5. DR, H-BENCH. 6. GUARD FILE. (TRUE COPY) BY ORDER ASSTT. REGISTRAR, ITAT.