Keva Fragrances P. Ltd, Mumbai vs Assessee

आयकर अपील य अ धकरण, मंब ु ई IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES 'A' MUMBAI सव ी आय.पी. बंसल, या यक सद य एवं बी.आर. बा करन , लेखा सद य के सम । BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND

SHRI B.R.BASKARAN, ACCOUNTANT MEMBER

आयकर अपील सं. / ITA No. 6565/MUM/2011 नधा रण वष /Assessment Year 2007-08

KEVA Fragrances Private बनाम/ Asstt. Commissioner of Income Limited, Tax, Cir. 4(2), Vs. Devkaran Mansion, Aaykar Bhavan, MK Road, 36, Mangaldas Road, Mumbai 400 020 Mumbai - 400 002. थायी ले खा सं . /जीआइआर सं . /PAN/GIR No. : AAACK 0375P

(अपीलाथ /Appellant) .. ( यथ / Respondent)

Appellant by Dr. K.Shivram Respondent by : Shri Sanjiv Pungliya सनु वाई क# तार%ख / Date of Hearing : 18/06/2015 घोषणा क# तार%ख /Date of Pronouncement : 18/06/2015 आदे श / O R D E R

PER I.P.BANSAL, JM:

This is an appeal filed by the assessee and it is directed against order passed by Ld. CIT(A)-8, Mumbai dated 01/07/2011 for assessment year 2007-

08. Ground of appeal read as under:

"1. On the facts of the case and in Law, the Learned Commissioner (appeals) erred in sustaining the levy of Interest u/s. 234A amounting to Rs.26,64,155/-.

2. On the facts of the case and in law, The Learned Commissioner (Appeals) erred in sustaining the levy of Interest u/s. 234B amounting to Rs.52,80,886/-."

Relief claimed in appeal:

1. Prayer for deletion of the excess levy of Interest u/s. 234A amounting to Rs. 21,02,467/-.

2 आयकर अपील सं. / ITA No. 6565/MUM/2011 नधा रण वष /Assessment Year 2007-08

2. Prayer for deletion of the excess levy of Interest u/s. 234B amounting to Rs.41,16,854/-.

2. As it can be seen from the grounds of appeal and relief claimed in the appeal, the assessee is contesting the quantum of liability regarding levy of interest under section 234A and 234B on the ground that to the extent self assessment tax is paid before the date of filing of the return should be reduced to compute liability of the assessee regarding levy of interest under section 234A and 234B. The assessee is claiming that excessive interest under section 234A and 234B amounting to Rs.21,02,467/- and Rs.41,16,854/-

respectively. It is the claim of the assessee that such excess levy of interest is on account of non-consideration of following amounts paid by the assessee after end of the accounting year but before the date of filing the return.

Date Amount of self assessment tax paid. 29/10/2007 `89,00,000/- 25/05/2009 45,61,284/- 26/12/2009 40,000/-

2.1 It was submitted that if the aforementioned amount is considered as

and when it is paid, and on the rest of the tax payable, the levy of interest would come to Rs.5,61,688/- and Rs.11,64,032/- under section 234A & 234B of the Act respectively. The return of income in the present case was filed on 26/12/2009 when last sum of Rs.40,000/- was paid. The returned income by the assessee at a sum of Rs.12,99,941/- has been accepted vide order passed under section 147 r.w.s. 143(3) of the Act vide order dated 30/10/2010. The assessee has challenged the aforementioned excess levy of interest in appeal filed before Ld. CIT(A), who has dismissed the appeal filed by the assessee on the ground that the taxes paid by the assessee after the end of the accounting year could not be treated as advance tax, therefore, levy of interest by the AO was all right as it was mandatory as has been held in the decision of Hon'ble Supreme Court in the case of CIT vs. Anjum M.H. Ghaswala & Others, 171 3 आयकर अपील सं. / ITA No. 6565/MUM/2011 नधा रण वष /Assessment Year 2007-08

CTR 1(SC). He distinguished the cases relied upon the assessee and has come to a conclusion that interest liability has rightly been calculated by the AO and assessee does not deserve the relief claimed in the appeal.

3. The aforementioned order of Ld. CIT(A) has been challenged in the grounds of appeal. Dr.K. Shivram, Ld. Senior Advocate for the assessee submitted that in view of decision of Mumbai Tribunal in the case of Mrs. Sheela Jaisingh vs. ACIT, 13 SOT 617 (Mum), in a case where return is belatedly filed and tax is paid after the end of the previous year but before the due date of filing the return, then the same would be in the nature of advance tax paid by the assessee and thus, AO was directed to give credit for the said payment while working out interest payable under section 234A & 234B. While holding so Mumbai ITAT had relied upon the decision of Delhi High Court in the case of Dr. Prannoy Roy v. CIT, 254 ITR 755 (Del) which has been affirmed by Hon'ble Apex Court in the case of CIT vs. Dr.Prannoy Roy, 309 ITR 231(SC).

3.1 Ld. Senior Advocate relied upon the following decisions to contend that while computing liability under section 234A & 234B, the set off of taxes paid prior to the date of filing the return should be given :

(1) Bharatbhai Shah vs. ITO, 355 ITR 373: In the said case a sum of Rs.10.00 lacs was deposited before the due date of filing the return and it was held that interest under section 234A should be charged only on the remaining amount of Rs.4.82 lacs as the total tax liability of the assessee was Rs.14.82 lacs.

While holding so Hon'ble Gujrat High Court has relied upon aforementioned decision of Delhi High Court and Hon'ble Supreme Court in the case of Pronnoy Roy (supra).

4 आयकर अपील सं. / ITA No. 6565/MUM/2011 नधा रण वष /Assessment Year 2007-08

(2) Nitin Muraliraheja vs. ACIT, 105 ITD 414(Mum): In the said case return was filed on 23/11/2000. Certain amount of tax was paid on 30/6/2000 and on entire amount interest under section 234A was calculated without giving set off of tax which was already paid. It was held that the term "advance tax" for the purpose of section 234A would cover all the taxes paid in advance of tax liability anticipated by assessee for concerned assessment year and the AO was directed to exclude the amount of tax paid on 30/6/2000 while calculating the interest under section 234A.

(3) Sachin Jain vs. DCIT, (2012) 13 ITR (Tribunal) 161 (Del) in which it has been held that interest under section 234A should be charged after giving credit of tax already paid.

4. On the other hand, Ld. DR relied upon the order passed by Ld. CIT(A).

5. We have heard both the parties and their contentions have carefully been considered. According to the facts of the case, assessee has paid the amount of tax mentioned in para- 2 of this order before filing of the return. To that extent and on the dates mentioned against their payment, the liability of the assessee to pay tax has been ceased and assessee is no more liable to pay tax to that extent. On that date the remaining amount will be only the tax payable by the assessee. Therefore, according to the proposition laid down in above mentioned decisions, which have been relied upon by Ld. Sr. Advocate for the assessee, we are of the opinion that assessee deserves relief. We therefore, direct the AO to recompute the interest under section 234A and 234B by excluding the amount of tax paid by the assessee from the dates when it was paid and levy interest u/s. 234A & 234B on the remaining tax payable by the assessee on the respective dates. We direct accordingly. The appeal filed by the assessee is considered to be partly allowed as per our above directions as what is mentioned in the grounds of appeal is not even claimed as per 5 आयकर अपील सं. / ITA No. 6565/MUM/2011 नधा रण वष /Assessment Year 2007-08

arguments of Ld. Sr. Advocate for the assessee and what is assailed as per relief claimed is only excessive payment of interest of Rs.21,02,467/- and Rs.41,16,854/- on account of levy of interest under s section 234A and 234B of the Act respectively.

6. In the result, appeal filed by the assessee is partly allowed in the manner aforesaid.

Order pronounced in the open court on 18/06/2015 आदे श क# घोषणा खल ु े यायालय म+ ,दनांकः 18/06/2015 को क# गई ।

Sd/- Sd/- (बी.आर. बा करन/B.R.BASKARAN) आय.पी.बंसल/I.P.BANSAL) लेखा सद य / ACCOUNTANT MEMBER या यक सद य / JUDICIAL MEMBER मुंबई Mumbai; ,दनांक Dated 18/06/2015 आदे श त ल प अ े षत/Copy of the Order forwarded to : 1. अपीलाथ / The Appellant 2. यथ / The Respondent. 3. आयकर आयु/त(अपील) / The CIT(A)- 4. आयकर आयु/त / CIT

5. 0वभागीय त न2ध, आयकर अपील%य अ2धकरण, मुंबई / DR, ITAT, Mumbai

6. गाड फाईल / Guard file.

आदे शानस ु ार/ BY ORDER, स या0पत त //True Copy// उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपील य अ धकरण, मुंबई / ITAT, Mumbai व. न.स./Vm, Sr. PS