Kotak Securities Ltd, Mumbai vs Department Of Income Tax

The Dy.Commissioner of Income-tax M/s.Kotak Securities Limited Circle 4(3) बना म/ 1st Floor, Bhaktawar Mumbai. Vs. 229 Nariman Point Mumbai -400 021. PAN : AAACK3436F. (अपी लाथ /Appellant) ( यथ/Respondent)

अपी लाथ क ओरसे /Appellant by : Shri Asghar Zain यथ क ओरसे /Respondent by : Shri Chetan Kakka

सन ुवा ई क ता रख / घोषणाक ता रख/ Date of Hearing : 26.02.2015 Date of Pronouncement : 13.03.2015.

आदे श/ ORDER

Per Amit Shukla (JM) :

This appeal has been preferred by the department against the order dated 05.10.2010, passed by the Commissioner of Income-tax (Appeals)-11, Mumbai, [`CIT(A)'for short] for the quantum of assessment passed u/s 143(3) read with section 147, for the assessment year 2002-2003, on the following grounds of appeal:-

"1. On the facts and in the circumstances of the case and in law, the Ld.CIT(A) erred in deleting the disallowance of Rs.6,90,589/- levied for charging interest u/s 234D of the Act.

2. On the facts and in the circumstances of the case, the impugned order of the Ld.CIT(A) is contrary to law and 2 ITA No.9000/Mum/2010 M/s.Kotak Securities Limited.

consequently merits to be set aside and that of the Assessing Officer be restored."

2. Brief facts are that, earlier the Tribunal vide order dated 27th July, 2011 in ITA No.3272/Mum/2006 had deleted the interest u/s 234D, on the ground that the said provision is applicable only from the assessment year 2004- 2005, as the same was brought into the statute with effect from 01.06.2003 and will not have retrospective effect. Against the said order of the Tribunal, the Revenue had filed an appeal u/s 260A, however, this issue was not raised as substantial question of law and neither it was admitted or formulated by the Hon' ble High Court. Later on, the Revenue had filed a Miscellaneous Application being, MA No.246/Mum/2013, wherein the Tribunal vide order dated 06.12.2013 recalled the order of the Tribunal to the extent of issue of levy of interest u/s 234D as raised vide ground No.8. After recall of the earlier order, the Tribunal vide order dated 30th January, 2014, gave direction to the AO to give effect to the binding decision of the Hon' ble Bombay High Court in the case of CIT v. Indian Oil Corporation Limited, reported in (2002) 210 Taxman 466. In the mean time, the AO while giving effect to the High Court order has again levied the interest u/s 234D. The said interest has been deleted by the CIT(A) after following the decision of the ITAT Special Bench in the case of Ekta Promoters Pvt. Ltd.

3. Now it is quite settled that the said decision of the Special Bench is no longer applicable, in wake of the decision of the Jurisdictional High Court in the case of CIT v. Indian Oil Corporation Ltd. (supra). Thus, the ground raised by the Revenue has to be decided against the assessee. Before us, the learned Counsel, though admitting the aforesaid position submitted that, 3 ITA No.9000/Mum/2010 M/s.Kotak Securities Limited.

the AO may be directed to give effect to the provisions of sub-section (2) of section 234D, while calculating the interest.

4. After considering the facts and submissions of the parties, we hold that so far as the issue of levy of interest u/s 234D, prior to assessment year 2004-2005, has been settled by the Hon' ble Bombay High Court in the case of CIT v. Indian Oil Corporation Ltd. (supra), that the amendment brought by the Finance Act, 2012 with retrospective effect from 01.06.2003 would be applicable even to the period prior to assessment year 2004-2005. Accordingly, the AO has rightly levied the interest u/s 234D for the assessment year 2002-2003. However, the AO is directed to give effect to the provisions of sub-section (2) of section 234D, while calculating the interest under the said section. With this direction, the Revenue' s appeal is treated as allowed.

5. पर णामतः र ाज व क अपी ल वी कृत क जा ती है। In the result, the Revenue' s appeal is allowed.

Order pronounced on this 13th day of March, 2015.

आदे श क घो षणा दना क ंः कोक गई ।

Sd/- Sd/- (Sanjay Arora) (Amit Shukla) ले खासद य/ ACCOUNTANT MEMBER या ियक सद य/ JUDICIAL MEMBER

मं ब ुईMumbai; दना क ं Dated : 13th March, 2015. Devdas* 4 ITA No.9000/Mum/2010

M/s.Kotak Securities Limited.

आदेशक ितिलप अ े षत/Copy of the Order forwarded to :

1. अपी लाथ / The Appellant

2. यथ / The Respondent.

3. आयकरआयु(अपी ल) / The CIT, Mumbai.

4. आयकरआयु / CIT(A) - 11, Mumbai

5. वभागी य ि तिनि ध, आयकरअपीली य अि धकर ण, मु बई / DR, ं ITAT, Mumbai

6. गाड फा ईल / Guard file.

आदे शानु सार / BY ORDER, स यापत ि त//True Copy//

उप/सहा यक पं जीका र(Dy./Asstt. Registrar) आयकरअपी लीय अि धकर ण, मु बई/ ITAT, Mumbai ं