APpolloTyres Ltd, Cochin V. DCIT, Ernakulam

ITA 904/COCH/2007

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 64767 (ITAT-COCHIN)
• Duration Of Justice: 4 year(s) 8 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-08-2012
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 26-06-2012
• Assessment Year: 2003-2004
• Appeal Filed On: 03-12-2007
• Court: TRIBUNAL
• Department Lawyers: S VIJAYAPRABHA
• Assessee Lawyers: V SATHYANARAYANAN
• Keywords: Business income

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE S/SHRI N.R.S.GANESAN, JM AND B.R.BASKAR AN, AM I.T.A. NO. 904/COCH/2007 ASSESSMENT YEAR: 2003-04 APOLLO TYRES LTD., 6 TH FLOOR, CHERUPUSHPAM BUILDING, SHANMUGHAM ROAD, KOCHI-682031. [PAN:AAACA 6990Q] VS. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-1(1), ERNAKULAM. (ASSESSEE -APPELLANT) (REVENUE-R ESPONDENT) ASSESSEE BY SHRI V.SATHYANARAYANAN, CA REVENUE BY SMT. S. VIJAYAPRABHA, JR. DR DATE OF HEARING 26/06/2012 DATE OF PRONOUNCEMENT 24/08/2012 O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: THE APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 25-09-2007 PASSED BY THE LD. CIT(A)-II, KOCHI AND IT RELATES TO THE A SSESSMENT YEAR 2003-04. 2. IN THIS APPEAL, THE ASSESSEE IS CHALLENGING THE ORDER OF THE LD. CIT(A) IN CONFIRMING THE INTEREST CHARGED U/S. 234C, 234D AND 220(2) OF THE ACT. 3. THE ASSESSMENT IN THE HANDS OF THE ASSESSEE-COMP ANY FOR THE ASSESSMENT YEAR UNDER CONSIDERATION WAS COMPLETED BY THE ASSESSING OFFICER ON 27-03-2006 BY MAKING VARIOUS ADDITIONS AND RAISING A DEMAND OF RS. 15.48 CRORES. THE ASSESSEE CHALLENGED THESE ADDITIONS BEFORE THE LD. CIT(A) AND THE FIRST APPELLATE AUTHORITY PASSED HIS ORDER ON 25-04-2006 BY GIVING PARTIAL RELIEF TO THE ASSES SEE. THEREAFTER, THE ASSESSING OFFICER PASSED THE CONSEQUENTIAL ORDER ON 04-07-2006 AND IN THAT ORDER, THE ORIGINAL DEMAND OF RS. 15.48 CRORES WAS REDUCED TO RS. 8.75 CRORES. W HILE PASSING THE SAID ORDER, THE I.T.A. NO. 904/COCH/2007 2 ASSESSING OFFICER CHARGED INTEREST U/S. 234C, 234D AND 220(2) OF THE ACT. THE ASSESSEE MOVED TWO SEPARATE PETITIONS U/S. 154 OF T HE ACT SEEKING RECTIFICATION OF THE ABOVE SAID INTEREST AMOUNTS. HOWEVER, THE SAID PET ITIONS WERE REJECTED BY THE ASSESSING OFFICER. THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A), BUT COULD NOT SUCCEED. HENCE THE ASSESSEE IS IN APPEAL BEFORE US. 4. THE FIRST ISSUE RELATES TO THE CHARGING OF INTER EST U/S. 234C OF THE ACT. ACCORDING TO THE ASSESSEE, IT WAS GRANTED ADDITIONAL EXCISE D UTY CREDIT OF RS. 36.27 CRORES IN THE MONTH OF MARCH, 2003 VIDE NOTIFICATION NO. 13/2003 CE(NT) DATED 01-03-2003 AND HENCE, THE ASSESSEE COULD NOT HAVE VISUALISED THE SAME AT THE TIME OF ESTIMATION OF CURRENT INCOME FOR THE PURPOSE OF COMPUTATION OF ADVANCE TAX PAYABLE U/S. 209 OF THE ACT. ACCORDINGLY, IT WAS PLEADED THAT INTEREST U/S . 234C FOR SHORTFALL IN PAYMENT OF ADVANCE TAX BEFORE 15 TH JUNE, 15 TH SEPTEMBER AND 15 TH DECEMBER SHOULD NOT HAVE BEEN CHARGED ON THE AMOUNT OF THE TAX RELATABLE TO THE A DDITIONAL EXCISE DUTY CREDIT REFERRED ABOVE. 5. HOWEVER, WE FIND THAT U/S. 234C OF THE ACT, RELA XATION IS GIVEN ONLY IN RESPECT OF CAPITAL GAINS AND INCOME REFERRED TO IN SEC. 2(24)( IX) OF THE ACT. AS POINTED OUT BY THE TAX AUTHORITIES, THERE IS NO PROVISION IN SEC. 234C TO EXCLUDE BUSINESS INCOME WHICH MIGHT BE RECEIVED DURING THE LAST MONTH OF THE ACCO UNTING PERIOD. ACCORDINGLY, WE FIND NO INFIRMITY IN THE DECISION OF THE LD. CIT(A) ON T HIS ISSUE. 6. THE NEXT ISSUE RELATES TO THE CHARGING OF INTERE ST U/S. 234D OF THE ACT. THE CONTENTION OF THE ASSESSEE IS THAT INTEREST UNDER S EC. 234D SHOULD HAVE BEEN CHARGED ONLY UP TO 30-04-2006, I.E., THE DATE OF THE APPELL ATE ORDER PASSED BY THE LD. CIT(A). HOWEVER, THE ASSESSING OFFICER HAS CHARGED INTEREST UP TO THE DATE OF PASSING THE CONSEQUENTIAL ORDER, I.E., UP TO 04-07-2006. AS PO INTED OUT BY THE LD. CIT(A), THE QUANTUM OF INTEREST CHARGEABLE U/S. 234D OF THE ACT VARIES WITH THE AMOUNT OF TOTAL INCOME COMPUTED AS PER THE ORDERS PASSED AT DIFFERE NT STAGES OF APPEAL. UNLESS THE TOTAL INCOME IS COMPUTED AND TAX PAYABLE IS DETERMI NED, INTEREST U/S. 234D, IF ANY, CANNOT BE COMPUTED. SO AS ON THE DATE OF THE ORDER OF THE LD. CIT(A), THE EXACT TAX I.T.A. NO. 904/COCH/2007 3 DUE CANNOT BE ASCERTAINED AND IT CAN BE DETERMINED ONLY UPON PASSING OF THE CONSEQUENTIAL ORDER BY THE ASSESSING OFFICER. UNDE R THESE CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE LD. CIT(A) WAS JUSTIFIED IN HOLDING T HAT THE INTEREST U/S. 234D HAS TO BE ALLOWED UP TO THE DATE OF PASSING OF THE CONSEQUENT IAL ORDER. 7. THE NEXT ISSUE RELATES TO THE CHARGING OF INTER EST U/S. 220(2) OF THE ACT. AS STATED IN THE CASE OF SEC. 234D OF THE ACT IN THE E ARLIER PARAGRAPH, THE TAX PAYABLE BY THE ASSESSEE CAN BE DETERMINED ONLY ON PASSING OF T HE CONSEQUENTIAL ORDER AND HENCE, INTEREST U/S. 220(2) OF THE ACT, CAN BE ASCERTAINED ONLY ON THAT DATE. HENCE THE LD. CIT(A), IN OUR VIEW, IS JUSTIFIED IN UPHOLDING THE ACTION OF THE ASSESSING OFFICER IN CHARGING OF INTEREST U/S. 220(2) UP TO THE DATE OF PASSING OF THE CONSEQUENTIAL ORDER. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. PRONOUNCED ACCORDIN GLY ON 24 -08-2012 SD/- SD/- (N.R.S.GANESAN) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: KOCHI DATED: 24TH AUGUST, 2012 GJ COPY TO: 1. APOLLO TYRES LTD., 6 TH FLOOR, CHERUPUSHPAM BUILDING, SHANMUGHAM ROAD, KOCHI-682031. 2.THE DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE-1(1 ), ERNAKULAM. 3.THE COMMISSIONER OF INCOME-TAX(APPEALS)-II, KOCHI . 4.THE COMMISSIONER OF INCOME-TAX, KOCHI. 5. D.R., I.T.A.T., COCHIN BENCH, COCHIN. 6. GUARD FILE. BY ORDER (ASSISTANT REGISTRAR) I.T.A.T, COCHIN