HINDALCO INDUSTRIES LTD, MUMBAI V. ACIT 6(3), MUMBAI

ITA 6923/MUM/2011

• Counselvise Citation: 692319914 RSA 2011
• Duration Of Justice: 2 year(s) 4 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-02-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 26-12-2013
• Assessment Year: misc
• Appeal Filed On: 12-10-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PITAMBAR DAS
• Assessee Lawyers: NARESH JAIN
• Section: 154; 244A

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL H BENCH, M UMBAI BEFORE S/SHRI B.R.MITTAL,(JM) AND B.R.BHASKARAN (AM ) . . , . . , ./I.T.A. NO.6923/MUM/2011 ( / ASSESSMENT YEAR : 1986-87) HINDALCO INDUSTRIES LTD, CENTURY BHAVAN, DR.ANNIE BESANT ROAD, WORLI, MUMBAI-400030 / VS. ASSISTANT COMMISSIONER OF INCOME TAX, 6(3), AAYAKAR BHAVAN, M K ROAD, MUMBAI-400020 ( % / APPELLANT) .. ( &% / RESPONDENT) ./ ./PAN/GIR NO. : AAACH1201R % / APPELLANT BY : SHRI NARESH JAIN &% * /RESPONDENT BY : SHRI PITAMBAR DAS * - / DATE OF HEARING : 24.2.2014 * - /DATE OF PRONOUNCEMENT : 26.2.2014 / O R D E R PER B.R.MITTAL, JM: THE ASSESSEE HAS FILED THIS APPEAL RELATING TO ASS ESSMENT YEAR 1986-87 AGAINST THE ORDER OF LD. CIT(A) DATED 1.8.2011 TAKING FOLLO WING GROUNDS: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS GROSSLY ERRED IN CONFIRMING THE ORDER U/S 154 PASS ED BY AO IN WHICH AO HAD NOT GRANTED INTEREST ON INTEREST U/S 244A TO THE TU NE OF RS.2,57,32,869/-. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, AND IN LAW, THE LD. CIT(A) ERRED IN IGNORING THE FACT THAT DEPARTMENT HAD WRON GLY WITHHELD INTEREST ON INTEREST FOR WHICH YOUR APPELLANT IS LEGALLY ENTITL ED 2. THE ASSESSEE VIDE LETTER DATED 31.5.2013 HAS TA KEN THE ADDITIONAL GROUND AND SAID GROUND ALSO RELATES TO ISSUE AS TO WHETHER AS SESSEE IS ENTITLED TO INTEREST ON INTEREST ON ACCOUNT OF DELAY ON THE PART OF DEPART MENT IN PAYMENT OF INTEREST TO THE ASSESSEE. I.T.A. NO. 6923 /MUM/2011 2 3. THIS APPEAL IS ARISING OUT OF ORDER PASSED BY A O U/S 154 OF THE INCOME TAX ACT, 1961 (THE ACT) DATED 25.5.2010. THE ASSESSEE FILED RECTIFICATION APPLICATION U/S 154 REQUESTING THAT THE ORDER PASSED U/S 154 DATED 25. 2.2002 WHEREIN ADJUSTMENT FOR REFUNDS ISSUED TIME TO TIME OF RS.1,80,14,940/- HAS BEEN MADE INSTEAD OF ACTUAL AMOUNT OF REFUND ISSUED TO THE ASSESSEE OF RS.1,80, 19,690/-. THE AO STATED THAT THE TOTAL INCOME REMAINED UNCHANGED FOR CALCULATION PUR POSES AND ACCORDINGLY REVISED THE AMOUNT. THE ASSESSEE FILED APPEAL BEFORE THE FIR ST APPELLATE AUTHORITY CONTENDING THAT THE AO GRANTED SHORT INTEREST U/S 244A OF THE ACT . THE ASSESSEE STATED THAT INTEREST GRANTED TO THE ASSESSEE OF RS.93,10,238/- IS NOT C ORRECT AS THE AMOUNT OF INTEREST U/S 244A WORKS OUT TO RS.3,50,43,107/-. THE CONTENTIO N OF THE ASSESSEE WAS THAT THE AO IGNORED INTEREST ON INTEREST FOR SUBSEQUENT PERIODS . HOWEVER, THE LD. CIT(A) DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE AND STATED TH AT SECTION 244A OF THE ACT CLEARLY DEFINES THE METHOD OF CALCULATION UNDER WHICH THE I NTEREST ON REFUND DUE TO THE ASSESSEE IS TO BE CALCULATED. AO HAS QUANTIFIE D THE EXACT AMOUNT OF INTEREST DUE TO THE ASSESSEE AS PER THE PROVISIONS OF ACT AND LAW DOES NOT PROVIDE FOR INTEREST TO BE GRANTED ON INTEREST GIVEN ON REFUND. HENCE, ASSES SEE IS IN FURTHER APPEAL BEFORE THE TRIBUNAL. 4. THE LD. AR PLACED RELIANCE ON THE DECISION OF HO NBLE APEX COURT IN THE CASE OF SANDVIK ASIA LTD. V. CIT & ORS. (2006) 280 ITR 643 (SC) AND SUBMITTED THAT THE CASE OF THE ASSESSEE IS TO BE GOVERNED BY THE PROVISIONS O F SECTION 244 OF THE ACT AS IT PERTAINS TO ASSESSMENT YEAR 1986-87. HE SUBMITTED THAT AS PER THE SAID DECISION OF THE HONBLE APEX COURT, THE ASSESSEE IS ENTITLED TO INTEREST O N INTEREST AS IN THE SAID CASE THE HONBLE APEX COURT HELD THAT THE ASSESSEE ON ACCO UNT OF DELAY IN REFUNDING THE AMOUNT DUE TO THE ASSESSEE, IS ENTITLE TO GET COMPE NSATION. 5. ON THE OTHER HAND, THE LD. DR SUBMITTED THAT T HE ISSUE IS SQUARELY COVERED BY THE DECISION OF LARGER BENCH OF THE HONBLE APEX CO URT IN THE CASE OF CIT V/S GUJARAT FLUORO CHEMICALS IN SPECIAL LEAVE PETITION ( C ) N O.11406 OF 2008 ORDER DATED 18.9.2013, DECIDED ALONG WITH OTHER APPEALS ON SI MILAR MATTER AND THE HONBLE APEX COURT HAS STATED AND CLARIFIED THAT THE ASSESSEE IS ENTITLED ONLY TO THE INTEREST PROVIDED UNDER THE STATUTE FROM THE REVENUE IN CASE OF DELAY OF REFUND. THE LD. DR REFERRED PARA 6 OF THE SAID ORDER OF HONBLE APEX COURT AND STATED THAT INTERPRETATION PLACED BY THE ASSESSEE ARE NOT CORRECT THAT THE REVENUE IS O BLIGED TO PAY AN INTEREST ON INTEREST IN THE EVENT OF ITS FAILURE TO REFUND THE INTEREST PA YABLE WITHIN THE STATUTORY PERIOD. I.T.A. NO. 6923 /MUM/2011 3 6. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF LD. REPRESENTATIVES OF THE PARTIES IN THE LIGHT OF DECISIONS CITED BEFORE US OF THE HONBLE APEX COURT (SUPRA). 7. WE AGREE WITH THE LD. DR THAT THE HONBLE APEX COURT VIDE ITS ORDER DATED 18.9.2013 HAS STATED THAT THE CASE OF SANDVIK ASI A LTD. (SUPRA) HAS BEEN MISQUOTED AND MISINTERPRETED BY THE ASSESSEE AND ALSO BY RE VENUE THAT THE HONBLE APEX COURT HAD DIRECTED TO PAY INTEREST ON THE STATUTORY INTER EST IN CASE OF DELAY IN PAYMENT. WE OBSERVE THAT THE HONBLE APEX COURT HAS HELD IN PAR A 8 THAT SECTION 244A PROVIDES FOR INTEREST ON REFUNDS UNDER VARIOUS CONTINGENCIES AND CLARIFIED THAT INTEREST PROVIDED FOR UNDER THE STATUTE WHICH MAY BE CLAIMED BY AN ASSESS EE FROM THE REVENUE AND NO OTHER INTEREST ON SUCH STATUTORY INTEREST. WE ARE OF THE CONSIDERED VIEW THAT THE CASE OF SANDVIK ASIA LTD. (SUPRA) RELIED UPON BY LD AR BE FORE US TO GIVE STRESS THAT THE HONBLE APEX COURT HAS HELD THAT THE ASSESSEE IS ENTITLED FOR COMPENSATION BY WAY OF INTEREST IN CASE OF DELAY ON THE REFUND IS ONLY THE PAYMENT OF STATUTORY INTEREST AND NOT THE INTEREST ON INTEREST ON THE REFUND DUE TO THE ASSE SSEE. WE HOLD THAT THE ASSESSEE IS ENTITLED ONLY FOR SIMPLE INTEREST. IF THE INTERES T IS CALCULATED AND BECOMES PART OF THE AMOUNT OF TAX TO BE REFUNDED TO THE ASSESSEE AND I N CASE THERE IS A DELAY IN PAYMENT THEREOF, THE ASSESSEE MAY BE ENTITLED TO GET INTERE ST ON THE SAID AMOUNT DUE FROM THE DEPARTMENT WHICH HAS BEEN CALCULATED AND ASCERTAINE D AND IN CASE THE INTEREST HAS NOT BEEN CALCULATED AND MERELY THERE IS A DELAY IN PAY MENT OF THE REFUND, THE ASSESSEE IS ENTITLED TO INTEREST AS PER THE PROVISIONS OF ACT I.E. SECTION 244A OF THE ACT AND NOT INTEREST ON INTEREST. IN VIEW OF ABOVE, WE HOLD T HAT HE ISSUE IS SQUARELY COVERED AGAINST THE ASSESSEE AND IN FAVOUR OF THE REVENU E BY THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF GUJARAT FLUORO CHEMICALS (SUP RA). HENCE, WE UPHOLD THE ORDER OF LD. CIT(A) AND REJECT THE GROUNDS OF APPEAL TAKEN BY ASSESSEE. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS MISSED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 26TH FEBRUARY, 2014 . 1 2 26TH FEBRUARY, 2014 * [ SD SD ( . . / B.R. BASKARAN ) ( . . /B.R.MITTAL) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI: ON THIS 26TH DAY OF FEBRARY,2014 I.T.A. NO. 6923 /MUM/2011 4 . . ./ SRL , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. % / THE APPELLANT 2. &% / THE RESPONDENT. 3. 8 ( ) / THE CIT(A)- CONCERNED 4. 8 / CIT CONCERNED 5. 9 &: , - : , / DR, ITAT, MUMBAI CONCERNED 6. / GUARD FILE. / BY ORDER, TRUE COPY (ASSTT. REGISTRAR) - : , /ITAT, MUMBAI