M/s DCM Shriiram Ltd., New Delhi V. DCIT, New Delhi

ITA 5221/DEL/2016

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 6722 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 04-10-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHIMA NEB SR DR
• Keywords: Revised return; TDS
• Section: 244A; 115JB; 143(1); 154

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B, NEW DELHI ! ! ! ! $ $$ $ $ $$ $ $ $$ $ $ $$ $ %&% %&% %&% %&% ' ' ' ' BEFORE MS. SUSHMA CHOWLA, JUDICIAL MEMBER & DR. B.R.R.KUMAR, ACCOUNTANT MEMBER ! ! ! !$ $$ $ / ITA NOS. 5221 & 5222/DEL/2016 (( (( (( (( / ASSESSMENT YEARS: 2005-06 & 2009-10 DCM SHRIRAM LTD., 5 TH FLOOR, KANCHENJUNGA BUILDING, 18, BARAKHAMBA ROAD, NEW DELHI-110001. PAN-AAACD0097R ........... )* /APPELLANT VS DCIT, CIRCLE-7(1), C.R.BUILDING, NEW DELHI. . +,)* / RESPONDENT )*-.% / APPELLANT BY : SH. PRADEEP DINODIA, CA, SH. V.P.GUPTA, ADV. & SH. ANUNAV KUMAR, ADV. +,)*-.% / RESPONDENT BY : MS. ASHIMA NEB, SR.DR -/0& / DATE OF HEARING : 03.10.2019 12-/0& / DATE OF PRONOUNCEMENT: 30.10.2019 % % % % / ORDER PER SUSHMA CHOWLA, JM: BOTH THE APPEALS FILED BY ASSESSEE ARE AGAINST SEPA RATE ORDERS OF CIT(A)-37, NEW DELHI, DATED 16.09.2016 & 22.08.2016 PASSED U/S 154/143(3) OF THE INCOME TAX ACT, 1961 RELATING TO ASSESSMENT YEARS 2005-06 & 2009-10 RESPECTIVELY. ITA NO:5221 & 5222/DEL/2016 ASSESSMENT YEAR: 2005-06 & 2009-10 PAGE | 2 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS IN TH ESE APPEALS:- ITA NO. 5221/DEL/2016 [ASSESSMENT YEAR: 2005-06] 1. THAT THE CIT(A) ERRED IN NOT APPRECIATING THE C LAIM AND CONTENTIONS OF THE APPELLANT COMPANY AND ALSO CLEAR PROVISIONS OF SECTIONS 240 AND 244A OF THE INCOME TAX ACT. SHE FA ILED TO APPRECIATE THAT AMOUNT OF REFUND OF RS. 2,14,64,710 /- ALLOWED BY THE ASSESSING OFFICER AS PER HER ORDER U/S 154 OF THE A CT DATED 22.06.2015 VIDE REFUND VOUCHER DATED 20.07.2015 OUG HT TO HAVE BEEN GRANTED IN JUNE, 2010 AND, THEREFORE, INTEREST WAS DULY ALLOWABLE FOR DELAY IN GRANTING THE AMOUNT OF REFUN D. 2. THAT THE CIT(A) ALSO ERRED IN NOT CORRECTLY APP RECIATING THE DECISIONS OF HON'BLE DELHI HIGH COURT AND OF SUPREM E COURT IN REGARD TO THE MATTER AND FAILED TO APPRECIATE THAT AS PER THE DECISIONS INTEREST IS DULY ALLOWABLE ON AMOUNT OF REFUND FOR DELAY IN GRANTING THE SAME AND SINCE GRANTING OF REFUND OF RS. 2,14,6 4,710/- WAS DELAYED FOR THE PERIOD JUNE, 2010 TO JULY, 2015, IN TEREST FOR THE DELAYED PERIOD WAS DULY ALLOWABLE TO THE APPELLANT COMPANY. 3. THAT THE CIT(A) ALSO FAILED TO APPRECIATE THAT IT IS NOT A QUESTION OF ALLOWING INTEREST ON INTEREST BUT THE I SSUE IS OF ALLOWING INTEREST ON THE AMOUNT OF REFUND ALLOWABLE TO THE A PPELLANT COMPANY AND IN TERMS OF PROVISIONS OF SECTION 240 OF THE AC T AMOUNT REFUNDABLE CONSIST OF TAX AS WELL AS INTEREST ALLOW ABLE TO AN ASSESSEE. 4. THAT THE CIT(A) ALSO FAILED TO APPRECIATE THAT S INCE THE REFUND ALLOWABLE TO THE APPELLANT COMPANY HAD BEEN WRONGLY WITHHELD BY THE DEPARTMENT FOR THE PERIOD OF MORE THAN 5 YEARS, THE DEPARTMENT WAS LIABLE TO PAY INTEREST THEREON FOR THE PERIOD O F DELAY AS THE DEPARTMENT CANNOT TAKE ADVANTAGE OF ITS OWN WRONG A ND CAUSE UNDUE LOSS TO THE APPELLANT. ITA NO:5221 & 5222/DEL/2016 ASSESSMENT YEAR: 2005-06 & 2009-10 PAGE | 3 ITA NO.5222/DEL/2016 [ASSESSMENT YEAR: 2009-10] 1. THAT THE CIT(A) ERRED IN NOT APPRECIATING THAT PROVISIONS OF SECTION 154 OF THE ACT WERE NOT APPLICABLE IN THE F ACTS AND CIRCUMSTANCES OF THE APPEAL AND, ACCORDINGLY, ORDER PASSED BY THE A.O. U/S 154/143(3) OF THE INCOME-TAX ACT DATED 16. 02.2016 WAS BEYOND THE PROVISIONS OF SECTION 154 OF THE ACT AND , THEREFORE, SAME OUGHT TO HAVE BEEN QUASHED. 2. THAT THE CIT(A) ERRED IN HOLDING THAT ADJUSTMEN T WAS REQUIRED TO BE MADE IN RESPECT OF PROVISION FOR DIMINUTION I N VALUE OF FERTILIZER BONDS OF RS.7.21 CRORES IN COMPUTATION OF BOOK PROF IT U/S 115JB OF THE ACT IN TERMS OF CLAUSE (I) TO EXPLANATION- 1 TO THE AFORESAID SECTION WITHOUT APPRECIATING THAT IT WAS NOT A PROVISION BU T IT WAS THE ACTUAL LOSS SUFFERED BY THE COMPANY ON VALUATION OF FERTIL IZER BONDS AS ON 31.03.2009 AND THE LOSS HAS ALREADY BEEN HELD AS AC CRUED LIABILITY IN ASSESSMENT YEAR 2008-09 AND ALSO IN ASSESSMENT Y EAR 2009-10 BY CIT(A), ITAT AND HONBLE DELHI HIGH COURT AND AL LOWABLE IN COMPUTATION OF TAXABLE INCOME. 3. THAT THE HONBLE CIT(A) ALSO FAILED TO APPRECIA TE THAT THE AMOUNT UNDER REFERENCE WAS NOT A PROVISION FOR DIMI NUTION IN VALUE OF ASSET BUT THE SAME WAS ACTUAL WRITE OFF IN THE V ALUATION OF FERTILIZER BONDS AS THE APPELLANT COMPANY HAD SHOWN IN ITS BAL ANCE SHEET AS ON 31.03.2009 THE REDUCED VALUE OF FERTILIZER BONDS AND, ACCORDINGLY, IN VIEW OF DECISION OF HONBLE SUPREME COURT IN THE CASE OF VIJAYA BANK V. CIT (2010) 323 ITR 166 (SC) IT WAS TO BE CO NSIDERED AS ACTUAL WRITE OFF AND NOT THE PROVISION AND, THEREFO RE, NO ADJUSTMENT IN COMPUTATION OF BOOK PROFIT U/S 115JB OF THE ACT WAS WARRANTED AND IN ANY CASE NO RECTIFICATION U/S 154 OF THE ACT COU LD BE MADE ON THE GROUND THAT IT WAS A PROVISION. ITA NO:5221 & 5222/DEL/2016 ASSESSMENT YEAR: 2005-06 & 2009-10 PAGE | 4 3. BOTH APPEALS OF THE ASSESSEE RELATING TO ASSESSM ENT YEARS 2005-06 & 2009-10 WERE HEARD TOGETHER AND ARE BEING DISPOS ED OF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 4. FIRST WE SHALL TAKE UP APPEAL OF THE ASSESSEE RE LATING TO ASSESSMENT YEAR 2005-06 WHEREIN THE ISSUE RAISED IS AGAINST TH E NON-GRANTING OF INTEREST TO THE ASSESSEE FOR THE PERIOD STARTING FR OM THE DATE OF DETERMINATION OF THE REFUND TO DATE OF ISSUE OF REF UND. 5. BRIEFLY IN THE FACTS AND CIRCUMSTANCES OF THE C ASE THE ASSESSING OFFICER HAD ISSUED THE INTIMATION U/S 143(1) OF THE ACT ON 28.03.2016. THE ASSESSEE HAD PAID ADVANCE TAX OF RS.25 CRORE AN D TDS OF RS.71,40,120/-. THE REFUND OF RS.4,28,50,269/- WAS ADJUSTED AGAINST THE DEMAND OF ASSESSMENT YEAR 2003-04 ON 31.07.2006. I N THE INTIMATION ISSUED U/S 143(1) OF THE ACT, THE PERIOD FOR WHICH INTEREST WAS ALLOWED, STARTED ON 01.04.2005 TO 31.03.2006. THE ASSESSEE WAS AGGRIEVED BY NON-GRANT OF INTEREST FOR THE PERIOD 01.04.2006 TO 30.06.2006 I.E. TILL THE DATE OF ADJUSTMENT OF THE REFUND AND MOVED AN APPLI CATION U/S 154 IN THIS REGARD. THE SAID INTEREST WAS GRANTED TO THE ASSESSEE TOTALING TO RS.6,42,754/- ON 20.07.2015 AGAINST NON-GRANTING OF THE INTEREST FOR THE PERIOD WITHIN WHICH THE INTEREST DUE TO THE ASSESS EE WAS WITHHELD. ANOTHER REFUND WAS DETERMINED BY THE SECOND INTIMAT ION ISSUED DATED 13.10.2007, AFTER THE ASSESSEE HAD FILED REVISED RE TURN OF INCOME ON 13.10.2007. THE TOTAL REFUND DUE WAS RS.8,20,15,35 7/- COMPRISING OF RS.8,16,64,925/- DETERMINED VIDE ORDER DATED 13.10. 2007 & ITA NO:5221 & 5222/DEL/2016 ASSESSMENT YEAR: 2005-06 & 2009-10 PAGE | 5 RS.3,50,434/- DETERMINED BY ORDER PASSED U/S 154 O F THE ACT DATED 10.05.2010. THE REFUND OF RS.8.20 CRORE WAS GRANTE D ON 15.06.2010. AGAINST WHICH THE ASSESSE MADE A CLAIM THAT INTERES T FOR THE PERIOD I.E. THE DATE OF ISSUE OF INTIMATION AND THE DATE OF GRA NT OF THE REFUND SHOULD BE ALLOWED TO THE ASSESSEE. THE SAID INTEREST WAS D ETERMINED BY THE ASSESSING OFFICER AT RS.2,01,18,293/- VIDE ORDER DA TED 20.07.2015. THE ASSESSEE IS IN APPEAL FOR NON-GRANTING OF THE INTER EST FROM THE DATE IT WAS DUE TO THE DATE IT WAS GRANTED I.E. THE PERIOD DURI NG WHICH REFUND AMOUNT WAS WITHHELD BY THE ASSESSING OFFICER. THE LAST PL EA OF THE ASSESSEE WAS VIS--VIS THE REFUND ARISING CONSEQUENT TO THE APPE AL EFFECT ORDER PASSED U/S 250/143(3) OF THE ACT DATED 03.06.2010, AGAINST WHICH THE REFUND WAS ALLOWED ON 15.06.2010 AND THE INTEREST WAS FINA LLY ALLOWED TO THE ASSESSEE ON 20.07.2015. THE ASSESSEE MOVED AN APPL ICATION FOR RECTIFICATION IN THIS REGARD WHICH WAS REJECTED AND EVEN THE CIT(A) DID NOT ALLOW THE CLAIM OF THE ASSESSEE. THE CIT(A) WAS OF THE VIEW THAT THE RELIEF WHICH IS ASKED FOR WAS COMPENSATION, WHICH COULD NO T BE ALLOWED TO MASQUERADE AS INTEREST ON INTEREST IN APPELLATE PRO CEEDINGS AND ALSO PLACED RELIANCE IN THE DECISION OF HONBLE DELHI HI GH COURT IN THE CASE OF CIT VS INDIAN FARMER FERTILIZER CO-OPERATIVE LTD. [ 2015] 374 ITR 56 (DEL.). 6. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF C IT(A). 7. THE LD.AR FOR THE ASSESSEE POINTED OUT THAT IT W AS NOT A CASE OF INTEREST ON INTEREST, BUT A CASE WHERE THOUGH REFUN D WAS DETERMINED IN THE HANDS OF THE ASSESSEE BUT THE SAME WAS NOT ISSU ED ALONGWITH THE ITA NO:5221 & 5222/DEL/2016 ASSESSMENT YEAR: 2005-06 & 2009-10 PAGE | 6 ORDER DETERMINING THE REFUND. THE DEPARTMENT HAS A GREED TO THE PLEA OF THE ASSESSEE THAT SUCH INTEREST IS DUE TO THE ASSES SEE VIDE ORDER PASSED DATED 20.07.2015. THE LD.AR FOR THE ASSESSEE POINT ED OUT THAT THE ASSESSEE WAS SEEKING THE INTEREST ON THE AMOUNT WHI CH WAS SOUGHT TO BE ALLOWED IN 2010 AND WAS ALLOWED TO THE ASSESSEE ONL Y IN JULY 2015. THE ASSESSEE IS CLAIMING THE AFORESAID INTEREST ON TOTA L REFUND OF RS.2,14,65,400/- FROM JUNE, 2010 TO 20.07.2015. IN THIS REGARD, OUR ATTENTION WAS DRAWN TO SECTION 244A(1)(B) OF THE AC T. HE FURTHER PLACED RELIANCE ON THE DECISION OF HONBLE APEX COURT IN T HE CASES OF HEG LTD. [2010] 324 ITR 331 (SC) AND K.LAKSHMANYA & CO. VS C IT [2017] 399 ITR 657 (SC). HE STATED THAT THE DECISION IN THE CASE OF K.LAKSHMANYA & CO. VS CIT (SUPRA) IS DATED 01.11.2017 ON THE ISSUE. R EFERRING TO THE ORDER OF THE CIT(A), HE POINTED OUT THAT THE RELIANCE WAS PL ACED BY HIM ON THE ORDER OF HONBLE DELHI HIGH COURT IN THE CASE OF CI T VS INDIAN FARMER FERTILIZER CO-OPERATIVE LTD.(SUPRA) WHICH IN TURN A PPLIED THE RATIO LAID DOWN IN THE CASE OF CIT VS GUJARAT FLUORO CHEMICALS [2013] 358 ITR 291 (SC) ON THE GROUND THAT IT WAS A DECISION OF LARGER BENCH. THE LD.AR FOR THE ASSESSEE STRESSED THAT EVEN THE DECISION IN THE CASE OF CIT VS HEG LTD. (SUPRA) IS A DECISION OF LARGER BENCH AND THE SAID DECISION WAS NOT BEFORE THE HONBLE APEX COURT IN THE CASE OF CIT VS GUJARAT FLUORO CHEMICALS (SUPRA). HE ALSO REFERRED TO THE INSTRUC TION OF THE CBDT AND POINTED OUT THAT THE ASSESSING OFFICER HAVE BEEN DI RECTED THAT WHILE GRANTING REFUND TO THE ASSESSEE, CARE SHOULD BE TAK EN TO ENSURE THAT ANY ITA NO:5221 & 5222/DEL/2016 ASSESSMENT YEAR: 2005-06 & 2009-10 PAGE | 7 INTEREST PAYABLE U/S 244A OF THE ACT, SHOULD BE GRA NTED SIMULTANEOUSLY WITH THE GRANT OF REFUND. 8. THE LD.DR FOR THE REVENUE POINTED OUT THAT THE C LAIM OF INTEREST MADE BY THE ASSESSEE ON THE REFUND GRANTED TO THE A SSESSEE, WAS NOT CORRECT. REFERRING TO THE PROVISIONS OF SECTION 24 4A(A) OF THE ACT, SHE POINTED OUT THAT THE SAID SECTION DOES NOT TALK OF INTEREST ON INTEREST. HE ALSO POINTED OUT THAT THE DECISION OF HONBLE SUPRE ME COURT IN THE CASE OF SANDVIK ASIA LIMITED VS CIT & ORS. [2006] 280 ITR 6 43 (SC) WAS REFERRED BY THE HONBLE APEX COURT IN CIT VS GUJARAT FLUORO CHEMICALS (SUPRA). IN THIS REGARD, HE POINTED OUT THAT THE HONBLE APEX C OURT IN CIT VS GUJARAT FLUORO CHEMICALS (SUPRA) HAVE LAID DOWN THE RATIO T HAT NO INTEREST IS TO BE ALLOWED ON DELAYED REFUNDS. REFERRING TO THE DEPAR TMENTAL CIRCULAR WHICH HAS BEEN REFERRED BY THE LD.AR FOR THE ASSESSEE, IT WAS POINTED OUT THAT THE SAID CIRCULAR DOES NOT HAVE ANY DIRECTION FOR A LLOWING INTEREST ON INTEREST. 9. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ISSUE WHICH ARISES IN THE PRESENT APPEAL IS AGAINST THE CLAIM OF INTEREST ON AMOUNTS WHICH WERE NOT ALLOWED BY THE ASSESSING OFF ICER WHILE ISSUING THE REFUND TO THE ASSESSEE. ADMITTEDLY IN THE CASE OF THE ASSESSEE, THE DATE OF INTIMATION U/S 143(1) OF THE ACT, FOR THE O RIGINAL RETURN OF INCOME AND FOR THE REVISED RETURN OF INCOME AND THE DATE O F ISSUE OF REFUND IS DIFFERENT. THE ASSESSEE HAD RAISED ITS CLAIM BEFOR E THE AUTHORITIES BELOW AND THE CLAIM OF THE ASSESSEE HAD BEEN FOUND TO BE CORRECT. THE ITA NO:5221 & 5222/DEL/2016 ASSESSMENT YEAR: 2005-06 & 2009-10 PAGE | 8 ASSESSING OFFICER THEN HAD ISSUED THE SAID INTEREST TO THE ASSESSEE VIDE ORDER DATED 20.07.2015. THE FIRST INSTANCE IS THE INTIMATION ISSUED AGAINST THE ORIGINAL RETURN OF INCOME WHERE THE SHO RTFALL WAS FOR THE PERIOD FROM 01.04.2006 TO 30.06.2006 I.E. THE PERIO D OF 6 MONTHS AND INTEREST OF RS.6,42,754/- WAS DETERMINED VIDE ORDER DATED 20.07.2015. FURTHER ANOTHER INTIMATION WAS ISSUED TO THE ASSESS EE, AFTER THE ASSESSEE FURNISHED REVISED RETURN OF INCOME WHICH WAS DATED 30.10.2007 AND THE REFUND WAS ISSUED/ADJUSTED ON 15.06.2010. THE ASSE SSEE AGITATED THE SAID CLAIM AND INTEREST OF ABOUT RS.2 CRORE WAS ALL OWED TO THE ASSESSEE VIDE ORDER DATED 20.07.2015. ANOTHER CLAIM WAS OF PERIOD OF ONE MONTH I.E. REFUND DUE TO THE ASSESSEE CONSEQUENT TO THE A PPEAL EFFECT GIVEN AND THE REFUND ISSUED AND SUM OF THE RS.7,04,353/- WAS ISSUED ON 30.07.2015. THE TOTAL AMOUNT OF INTEREST WHICH WAS FURTHER ALLOWED TO THE ASSESSEE THUS WAS RS.2,40,65,400/-. 10. THE CASE OF THE ASSESSEE BEFORE US IS THAT ALL THIS INTEREST WAS DUE TO THE ASSESSEE IN MONTH OF JUNE 2006 TO JUNE 2010 AND 30.06.2010 I.E. THE ORIGINAL INTEREST ALLOWABLE TO THE ASSESSEE U/S 244A (1)(A) OF THE ACT. THE ASSESSEE CLAIMS THAT INCASE THE REFUND WAS ISSU ED ON RESPECTIVE DATES I.E. ON ACCOUNT OF INTEREST DUE, THEN IT HAD NO GRI EVANCE. BUT IT WAS NOT SO; INTEREST FOR CERTAIN PERIODS WAS ISSUED ON 20.0 7.2015. FOR THIS PERIOD DURING WHICH INTEREST DUE TO THE ASSESSEE WAS WITHH ELD BY THE DEPARTMENT, THE PRESENT APPEAL HAS BEEN FILED BY TH E ASSESSEE SEEKING ITA NO:5221 & 5222/DEL/2016 ASSESSMENT YEAR: 2005-06 & 2009-10 PAGE | 9 GRANT OF INTEREST ON THE AFORESAID REFUND DETERMIN ED ON ACCOUNT OF INTEREST OF RS.2.14 CRORES. 11. THE PROVISIONS OF SECTION 244A(1)(A) OF THE ACT TALKS OF INTEREST DUE TO THE ASSESSEE ON ACCOUNT OF ANY TAX COLLECTED AT SOURCE OR PAID BY ADVANCE DURING THE FINANCIAL YEAR. SUB-CLAUSE (AA) TALKS OF REFUND ARISING ON ACCOUNT OF TAX PAID U/S 140A OF THE ACT AND CLAUSE (B) OF ANY OTHER CASE. THE ASSESSEE CLAIMS THAT ITS CASE FAL LS IN SUB-CLAUSE (B) OF SECTION 244A(1) OF THE ACT. THE GRIEVANCE IS THAT INCASE THE AMOUNT WAS PAID TO THE ASSESSEE, WHEN IT WAS DUE THEN NO INTER EST WAS TO BE FURTHER PAID; BUT SINCE IT WAS NOT PAID ON THE DUE DATES, T HE ASSESSEE IS ENTITLED TO CLAIM THE INTEREST ON SUCH LATE PAYMENT OF INTER EST DUE TO IT. THE ISSUE WHICH NEEDS TO BE ADJUDICATED IS WHETHER SUCH INTER EST IS INTEREST ON INTEREST, TO BE ALLOWED TO THE ASSESSEE. 12. THE HONBLE SUPREME COURT IN SANDVIK ASIA LIMIT ED VS CIT & ORS. (SUPRA) HAD LAID DOWN THE PROPOSITION THAT INTEREST U/S 244(I) OF THE ACT IS TO BE GRANTED TO THE ASSESSEE I.E. INTEREST ON INT EREST PAYABLE ON REFUND ON COMPENSATORY GROUND AS THE DISPUTED AMOUNT WAS W RONGFULLY AND UNJUSTIFIABLY WITHHELD BY THE DEPARTMENT. 13. THE HONBLE SUPREME COURT IN THE CASE OF CIT VS HEG LTD. (SUPRA) DELIBERATED UPON THE MEANING OF THE WORDS REFUND O F ANY AMOUNT BECOMES DUE TO THE ASSESSEE U/S 244A OF THE ACT. IN THE FACTS OF THE SAID CASE, NO INTEREST WAS PAID BY THE DEPARTMENT ON THE REFUND OF ITA NO:5221 & 5222/DEL/2016 ASSESSMENT YEAR: 2005-06 & 2009-10 PAGE | 10 RS.45,73,582/- FOR 57 MONTHS. THE HONBLE SUPREME COURT HELD AS UNDER:- 7. THE NEXT QUESTION WHICH WE ARE REQUIRED TO ANSW ER IS - WHAT IS THE MEANING OF THE WORDS 'REFUND OF ANY AMOUNT B ECOMES DUE TO THE ASSESSEE' IN SECTION 244A? IN THE PRESENT CASE, AS STATED ABOVE, THERE ARE TWO COMPONENTS OF THE TAX PAID BY THE ASS ESSEE FOR WHICH THE ASSESSEE WAS GRANTED REFUND, NAMELY TDS OF RS. 45,73,528 AND TAX PAID AFTER ORIGINAL ASSESSMENT OF RS. 1,71, 00,320. THE DEPARTMENT CONTENDS THAT THE WORDS 'ANY AMOUNT' WIL L NOT INCLUDE THE INTEREST WHICH ACCRUED TO THE RESPONDENT FOR NO T REFUNDING RS.45,73,528 FOR 57 MONTHS. WE SEE NO MERIT IN THIS - ARGUMENT. THE INTEREST COMPONENT WILL PARTAKE OF THE CHARACTE R OF THE 'AMOUNT DUE' UNDER SECTION 244A. IT BECOMES AN INTEGRAL PAR T OF RS.45,73,528 WHICH IS NOT PAID FOR 57 MONTHS AFTER THE SAID AMOU NT BECAME DUE AND PAYABLE. AS CAN BE SEEN FROM THE FACTS NARRATED ABOVE, THIS IS THE CASE OF SHORT PAYMENT BY THE DEPARTMENT AND IT IS IN THIS WAY THAT THE ASSESSEE CLAIMS INTEREST UNDER SECTION 244 A OF THE INCOME-TAX ACT. THEREFORE, ON BOTH THE AFORESTATED GROUNDS, WE ARE OF THE VIEW THAT THE ASSESSEE WAS ENTITLED TO INTER EST FOR 57 MONTHS ON RS. 45,73,528. THE PRINCIPAL AMOUNT OF RS.45,73, 528 HAS BEEN PAID ON 31-12-1997 BUT NET OF INTEREST WHICH, AS ST ATED ABOVE, PARTOOK THE CHARACTER OF 'AMOUNT DUE' UNDER SECTION 244A. 14. FURTHER THE AUTHORITIES BELOW AND THE LD.DR BEF ORE US HAD RELIED UPON THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF CIT VS GUJARAT FLUORO CHEMICALS (SUPRA) WHEREIN IT HAS BEEN HELD T HAT THE REVENUE IS NOT OBLIGED TO PAY ANY INTEREST ON INTEREST IN THE EVENT OF ITS FAILURE TO REFUND, THE AMOUNT DUE WITHIN STATUTORY PERIOD. ITA NO:5221 & 5222/DEL/2016 ASSESSMENT YEAR: 2005-06 & 2009-10 PAGE | 11 15. THE HONBLE APEX COURT ALSO REFERRED TO THE INS ERTION OF SECTION 244A OF THE ACT W.E.F 01.04.1989 AND HELD THAT IT W AS ONLY THE INTEREST PROVIDED FOR UNDER THE STATUTE WHICH MAY BE CLAIMED BY AN ASSESSEE FROM THE REVENUE AND NO OTHER INTEREST ON SUCH STATUTORY INTEREST, WAS TO BE ALLOWED. 16. BOTH DECISIONS OF THE HONBLE SUPREME COURT ARE OF THREE JUDGES BENCH. IN THE LATEST DECISION, THE HONBLE SUPREME COURT IN THE CASE OF K.LAKSHMANYA & CO. VS CIT (SUPRA) HAD HELD AS UNDER :- 9. WHEN IT COMES TO INTEREST ON REFUND, SECTION 24 4, WHICH APPLIED TO ASSESSMENT YEARS UP TO AND INCLUDING ASS ESSMENT YEAR 1989-90, MADE IT CLEAR THAT IT WOULD APPLY WHERE A REFUND IS DUE TO THE ASSESSEE IN PURSUANCE OF AN ORDER REFERRED TO I N SECTION 240. IT IS ONLY IF THE ASSESSING OFFICER DOES NOT GRANT THE REFUND WITHIN THREE MONTHS FROM THE END OF THE MONTH IN WHICH SUCH ORDE R IS PASSED, THAT THE CENTRAL GOVERNMENT SHALL PAY TO THE ASSESSEES S IMPLE INTEREST ON THE AMOUNT OF REFUND DUE. 17. THE HONBLE APEX COURT IN THE CASE OF K.LAKSHMA NYA & CO. VS CIT (SUPRA) REFERRED TO THE PROVISIONS OF SECTION 244A OF THE ACT AND OBSERVED THAT THE SECTION WAS WIDER IN SCOPE THAN SECTION 24 4 AND IT COVERED CASES WHERE REFUND BECAME DUE UNDER THE INCOME TAX ACT, 1 961, IN WHICH CASE THE ASSESSEE SHALL, SUBJECT TO THE PROVISIONS OF T HIS SECTION, BE ENTITLED TO RECEIVE SIMPLE INTEREST. 18. THE HONBLE APEX COURT CONCLUDED BY HOLDING AS UNDER:- ITA NO:5221 & 5222/DEL/2016 ASSESSMENT YEAR: 2005-06 & 2009-10 PAGE | 12 12. THE PRESENT CASE WOULD FALL OUTSIDE SUB-CLAUSE (A) AND (AA) OF THIS PROVISION AND, THEREFORE, FALL WITHIN THE RESI DUARY CLAUSE, NAMELY SUB-CLAUSE (B) OF SECTION 244(A). 19. THE HONBLE APEX COURT ALSO MADE REFERENCE TO T HE EARLIER DECISION OF HONBLE APEX COURT IN THE CASE OF CIT VS HEG LTD . (SUPRA) IN PARA 17 AND OTHER DECISIONS AND HELD AS UNDER:- 17. IN COMMISSIONER OF INCOME TAX, BHOPAL V H.E.G. LIMITED MANU/HON'BLE SUPREME COURT/2094/2009: 2010 (15) SCC 349, THIS COURT WAS SQUARELY CONFRONTED WITH THE MEANING OF T HE EXPRESSION WHERE REFUND OF ANY AMOUNT BECOME DUE TO THE ASSES SEE IN SECTION 244(A)(1). THIS QUESTION WAS ANSWERED AS FOLLOWS:- 5. IN THE PRESENT CASE, AS STATED ABOVE, THERE ARE TWO COMPONENTS OF THE TAX PAID BY THE ASSESSEE FOR WHIC H THE ASSESSEE WAS GRANTED REFUND, NAMELY TDS OF RS. 45,7 3,528 AND TAX PAID AFTER ORIGINAL ASSESSMENT OF RS. 1,71, 00,320. THE DEPARTMENT CONTENDS THAT THE WORDS 'ANY AMOUNT' WIL L NOT INCLUDE THE INTEREST WHICH ACCRUED TO THE RESPONDEN T FOR NOT REFUNDING RS.45,73,528 FOR 57 MONTHS. WE SEE NO MER IT IN THIS ARGUMENT. THE INTEREST COMPONENT WILL PARTAKE OF TH E CHARACTER OF THE 'AMOUNT DUE' UNDER SECTION 244-A. IT BECOMES AN INTEGRAL PART OF RS. 45,73,528 WHICH IS NOT PAID FO R 57 MONTHS AFTER THE SAID AMOUNT BECAME DUE AND PAYABLE. AS CA N BE SEEN FROM THE FACTS NARRATED ABOVE, THIS IS THE CAS E OF SHORT PAYMENT BY THE DEPARTMENT AND IT IS IN THIS WAY THA T THE ASSESSEE CLAIMS INTEREST UNDER SECTION 244-A OF THE INCOME TAX ACT. THEREFORE, ON BOTH THE AFORESTATED GROUNDS , WE ARE OF THE VIEW THAT THE ASSESSEE WAS ENTITLED TO INTEREST FOR 57 MONTHS ON RS. 45,73,5289. THE PRINCIPAL AMOUNT OF R S. ITA NO:5221 & 5222/DEL/2016 ASSESSMENT YEAR: 2005-06 & 2009-10 PAGE | 13 45,73,528 HAS BEEN PAID ON 31.12.1997 BUT NOT OF IN TEREST WHICH, AS STATED ABOVE, PARTOOK THE CHARACTER OF 'A MOUNT DUE' UNDER SECTION 244-A. 18. IN UNION OF INDIA V. TATA CHEMICALS LTD. MANU/SC/0213/2014 : 2014 (6) SCC 335, THIS COURT AF TER GOING INTO THE OBJECT FOR THE ENACTMENT OF SECTION 244(A), HELD: INTEREST PAYMENT IS A STATUTORY OBLIGATION AND NON- DISCRETIONARY IN NATURE TO THE ASSESSEE. IN TUNE WI TH THE AFORESAID GENERAL PRINCIPLE, SECTION 244A IS DR AFTED AND ENACTED. THE LANGUAGE EMPLOYED IN SECTION 244A OF THE ACT IS CLEAR AND PLAIN. IT GRANTS SUBSTANTIVE R IGHT OF INTEREST AND IS NOT PROCEDURAL. THE PRINCIPLES FOR GRANT OF INTEREST ARE THE SAME AS UNDER THE PROVISIONS OF SE CTION 244 APPLICABLE TO ASSESSMENTS BEFORE 01.04.1989, AL BEIT WITH CLARITY OF APPLICATION AS CONTAINED IN SECTION 244A. 31. THE DEPARTMENT HAS ALSO ISSUED A CIRCULAR CLARI FYING THE PURPOSE AND OBJECT OF INTRODUCING SECTION 244A OF THE ACT TO REPLACE SECTIONS 214, 243 AND 244 OF THE ACT . IT IS CLARIFIED THEREIN, THAT, SINCE THERE WAS SOME LACUN AE IN THE EARLIER PROVISIONS WITH REGARD TO NON-PAYMENT O F INTEREST BY THE REVENUE TO THE ASSESSEE FOR THE MON EY REMAINING WITH THE GOVERNMENT, THE SAID SECTION IS INTRODUCED FOR PAYMENT OF INTEREST BY THE DEPARTMEN T FOR DELAY IN GRANT OF REFUNDS. A GENERAL RIGHT EXISTS I N THE STATE TO REFUND ANY TAX COLLECTED FOR ITS PURPOSE, AND A CORRESPONDING RIGHT EXISTS TO REFUND TO INDIVIDUALS ANY SUM PAID BY THEM AS TAXES WHICH ARE FOUND TO HAVE BEEN WRONGFULLY EXACTED OR ARE BELIEVED TO BE, FOR ANY REASON, INEQUITABLE. THE STATUTORY OBLIGATION TO RE FUND ITA NO:5221 & 5222/DEL/2016 ASSESSMENT YEAR: 2005-06 & 2009-10 PAGE | 14 CARRIED WITH IT THE RIGHT TO INTEREST ALSO, THIS IS TRUE IN THE CASE OF ASSESSEE UNDER THE ACT. 19. THE ABOVE EXTRACT WOULD CLEARLY SHOW THAT A CO RRESPONDING RIGHT EXISTS, TO REFUND TO INDIVIDUALS ANY SUM PAID BY THEM AS TAXES WHICH ARE FOUND TO HAVE BEEN WRONGFULLY EXISTED OR BELIEVED TO BE, FOR ANY REASON, INEQUITABLE. THE STATUTORY OBLIGATION TO REFUND, BEING NON DISCRETIONARY, CARRIES WITH IT THE RIGHT TO INT EREST, ALSO MAKING IT CLEAR THAT THE RIGHT TO INTEREST IS PARASITICAL. T HE RIGHT TO CLAIM REFUND IS AUTOMATIC ONCE THE STATUTORY PROVISIONS HAVE BEE N COMPLIED WITH. 20. THIS DECISION OF THE HONBLE APEX COURT IS OF T WO JUDGES BENCH BUT HAS CONSIDERED THE ISSUE IN EARLIER DECISIONS. 21. IN SUCH A SCENARIO, WE FIND MERIT IN THE PLEA O F THE ASSESSEE. THE DECISION IN THE CASE OF CIT VS GUJARAT FLUORO CHEMI CALS (SUPRA) IS CONTRARY TO THE EARLIER THREE JUDGES BENCH DECISIO N IN CIT VS HEG LTD. (SUPRA) AND IT MAY BE POINTED OUT THAT THE SAID DEC ISION WAS NOT REFERRED TO BEFORE THE BENCH. HENCE, THERE IS NO MERIT IN T HE ORDER OF THE CIT(A) IN RELYING ON THE SAID DECISION. APPLYING THE PROPOSI TION LAID DOWN BY THE HONBLE APEX COURT IN THE CASE OF CIT VS HEG LTD. ( SUPRA) AND K.LAKSHMANYA & CO. VS CIT (SUPRA), WE HOLD THAT EVE N ON ACCOUNT OF INTEREST WITHHELD BY THE ASSESSING OFFICER AND NOT ISSUED ON TIME, FOR PART OF THE REFUND, THE DELAY IS FROM JUNE 2006 TO JULY 2015 AND FOR THE NEXT REFUND OF RS.2.01 CRORES, THE DELAY IS FROM 15.06.2 010 TO 20.07.2015, THE ASSESSEE IS ENTITLED TO THE INTEREST. ACCORDINGLY, WE HOLD THAT THE ASSESSEE IS ENTITLED TO CLAIM THE INTEREST FOR WITHHOLDING T HE REFUND DUE TO THE ITA NO:5221 & 5222/DEL/2016 ASSESSMENT YEAR: 2005-06 & 2009-10 PAGE | 15 ASSESSEE ON ACCOUNT OF INTEREST ULTIMATELY ALLOWED TO THE ASSESSEE FOR A PERIOD FROM THE DATE OF SHORT ALLOWED TO THE DATE O F REFUND ON 20.07.2015. ACCORDINGLY, WE DIRECT THE ASSESSING OFFICER TO COM PUTE THE INTEREST IN THIS REGARD AFTER VERIFYING THE CALCULATION OF THE ASSESSEE FOR THE AFORESAID INTEREST DUE TO THE ASSESSEE. THUS, GROUNDS RAISED BY THE ASSESSEE IN THIS APPEAL ARE ALLOWED. 22. NOW COMING TO THE APPEAL OF THE ASSESSEE IN ASS ESSMENT YEAR 2009- 10 WHEREIN THE ISSUE IS WITH REGARD TO THE CLAIM OF LOSS ON DIMINUTION IN VALUE OF FERTILIZER BONDS ISSUED TO THE ASSESSEE. THE LD.AR FOR THE ASSESSEE HAS RAISED TWO ASPECTS OF THE SAID ISSUE B EFORE US. HE POINTED OUT THAT THE CLAIM MADE BY THE ASSESSEE WAS WITHDRA WN BY AN ORDER PASSED U/S 154 OF THE ACT. HE STRESSED THAT IT WAS NOT A MISTAKE APPARENT FROM RECORD, SINCE THE ISSUE WAS DEBATABLE , AS THE MATTER WAS BEFORE THE HONBLE HIGH COURT AND HENCE, THE ASSESS ING OFFICER COULD NOT EXERCISE HIS POWER U/S 154 OF THE ACT. HE POINTED OUT EVEN ON MERITS, THE ASSESSING OFFICER HAD ERRED IN NOT ALLOWING THE AFO RESAID DEDUCTION TO THE ASSESSEE. HE STATED THAT THE ISSUE NOW STANDS COVER ED BY THE ORDER OF THE HONBLE HIGH COURT IN ASSESSEES OWN CASE IN ITA NO .939 & 940/2015 VIDE ORDER DATED 04.12.2015. THE HONBLE HIGH COUR T HELD THAT THE BONDS WHICH WERE HELD UNDER THE HEAD CURRENT INVESTMENTS ASSETS, WITHIN THE DIMINUTION VALUE OF THE BONDS WAS IN THE NATURE OF REVENUE LOSS AND COULD BE CLAIMED BY THE ASSESSEE. SINCE THE BOND S WAS HELD IN STOCK IN TRADE, THE SAME COULD BE VALUED AT MARKET VALUE OR COST, WHICHEVER WAS ITA NO:5221 & 5222/DEL/2016 ASSESSMENT YEAR: 2005-06 & 2009-10 PAGE | 16 LESS. FOLLOWING THE SAID DECISION OF THE HONBLE H IGH COURT IN ASSESSEES OWN CASE, WE HOLD THAT THE ASSESSEE IS ENTITLED TO CLAIM THE LOSS FOR THE DIMINUTION IN VALUE OF FERTILIZER BONDS, SINCE THE BONDS WERE HELD IN STOCK IN TRADE AND THE SAME HAD TO BE VALUED EITHER ON MA RKET RATE OR COST, WHICHEVER WAS LESS. THUS, GROUNDS OF APPEAL RAISED BY THE ASSESSEE IN THIS APPEAL ARE ALLOWED. 24. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH DAY OF OCTOBER, 2019. SD/- SD/- (B.R.R.KUMAR) (SUSHMA CH OWLA) %& %& %& %& /ACCOUNTANT MEMBER /JUDICIAL MEMBER / ! DATED : 30 TH OCTOBER, 2019 . * AMIT KUMAR * %-+/45%4/6 COPY OF THE ORDER IS FORWARDED TO : 1. )* / THE APPELLANT; 2. +,)* / THE RESPONDENT; 3. 7 8 9 / THE CIT(A) 4. 4:;+/ / DR, ITAT, DELHI 5. ;(< 6 GUARD FILE. % % % % / BY ORDER , ,4/+/ // TRUE COPY // >?@ , ASSISTANT REGISTRAR, ITAT, DELHI