M/S. SHIPRA ESTATE LTD.,GHAZIABAD vs. ACIT, GHAZIABAD

O R D E R PER PRASHANT MAHARISHI, A. M.

01 This appeal is filed by the assessee against the order of the ld. CIT (Appeals), Ghaziabad, dated 1 December 2015 for the Assessment Year 2012-13. 02 The assessee has raised the following grounds of appeal:-

1. That the learned Commissioner of Income Tax (Appeals) grossly erred in upholding the addition of Rs. 13,00,15,605 on account of disallowance of deduction claimed u/s 80IB(10) of the Income Tax Act, 1961 even after recording the findings that technically sufficient evidences are filed to explain the conditions prescribed by the statute in respect of project completion certificate issued from the Authority is fulfilled.

2. That the learned Commissioner of Income Tax (Appeals) grossly erred in upholding the disallowance of deduction u/s 80IB(10) of the Income Tax Act, 1961 in entirety on non fulfillment of the condition laid down under clause (f) of section 80IB(10) of the Act.

3. That having regard to the facts and circumstances of the case, the learned Commissioner of Income Tax (Appeals) has erred in law and on facts in not reversing the action of the learned Assessing Officer in charging interest u/s 234B of the Income Tax Act, 1961. 4. That having regard to the facts and circumstances of the case, the learned Commissioner of Income Tax (Appeals) has erred in law and on facts in not reversing the action of the learned Assessing Officer in charging interest u/s 234C of the Income Tax Act, 1961. “

03 The brief fact of the case shows that assessee is a builder company engaged in the business of construction and sale of flats in Ghaziabad and other places. 04 The assessee filed its return of income for Assessment Year 2012-13 on 30th September, 2012 declaring total income of Rs. 199,98,55,110/-. In the return of income, assessee has claimed deduction u/s 80 IB (10) of the act amounting to ₹ 288,419,207 which was restricted up to Rs. 13,00,15,605/–. 05 For claiming deduction u/s 80 IB (10) , assessee has submitted Form No 10 CCB being an audit report required u/s 80 IB of the act for the impugned assessment year. According to para number 23 of the above report it was stated that the project of the assessee has been granted approval on 26th of September 2006 and with respect to the date of completion of the housing project, it was submitted that the request for issuing complication certificate has already been filed with the Ghaziabad development authority [ GDA] on 30th of November 2011. However as per the certificate of Architect dated 17/8/2012 the project has been completed in FY 2011 – 12 and the copy of the completion Page | 2 certificate issued by the architect was also attached. According to the certificate of the architect, it was stated that the project has already been completed and possession has already been given to the customers during financial year 2011 – 12. Subsequent to the above filing of the return and certificate dated 29/9/2012 issued by the chartered accountant, the assessee also obtained a letter dated 21 February 2013 from Ghaziabad development authority stating that the date of completion of the above project is 21st of February 2011. Thus, it was stated that the assessee’s claim of deduction u/s 80 IB (10) is in order , as it complies with all the conditions including the condition of the completion of the project within five years from tend of the year in which the approval was granted. 06 During the assessment proceedings , The ld. Assessing Officer noted that assessee has claimed deduction under Section 80IB(10) of the Income Tax Act, 1961 (the Act) of Rs. 28,84,19,207/- and restricted the same at Rs. 13,00,15,605/- for Sun City Phase-I Project at Indirapuram, Ghaziabad. The ld. Assessing Officer examined the claim of the assessee and asked the assessee to show the date of completion of the project. The assessee submitted a letter issued by Ghaziabad Development Authority (GDA) regarding the completion certificate. The approval to the plan for the construction of housing project was granted by GDA on 26.09.2006. The plan was constructed on total plot area of 11055.99 sq. mts. The project was stated to have been completed and possession has already been given to customers on 21 February 2011, during Financial Year 2011-12. Thus, according to the assessee the project was completed on 21/02/2011 i.e. within five years from the end of the financial year in which the project was approved (i.e. 26/9/2006). The Assessing Officer noted that according to the provisions of Section 80IB(10) of the Act the project should have been completed within 5 years from the end of the financial year for which the housing project was approved by the local authority. He noted that the project for eligibility of deduction, the last Page | 3 date of completion would be 31st of March 2012. The AO noted that Ghaziabad Development Authority (GDA) through its Joint Secretary issued completion certificate on 21.02.2013. However, according to the assessee the application was submitted for completion certificate vide letter dated 29.09.2012. The assessee submitted that GDA has approved the date of project as on 21.02.2011. It further states that application after the completion of the project was submitted to the authority and the authorities constituted an inspection committee. As per the report and recommendation of the committee, the GDA approved the date of the completion of the project as 21.02.2011. The ld. Assessing Officer was of the view that the Act recognizes only the actual date of the completion certificate by the local authorities. He, therefore, rejected the explanation of the assessee that the first registration of the flat was made on 21.02.2011 and Ghaziabad Development Authority has accepted the date of completion as at 21.02.2011 as per the letter dated 21.02.2013. The Assessing Officer was of the view that the language of the Act was very clear and the date of completion of construction of the housing project shall be taken to be the date on which the completion certificate in respect of housing project is issued by the local authority. He held that such completion certificate was issued by GDA on 21.02.2013, which is beyond the prescribed time limit on 31.03.2012. He further held that merely as the first registration of housing unit has taken place on 21.02.2011, the whole project cannot have to be considered as completed by 31.03.2012. He held that assessee has constructed 346 units in the project and by merely registration one unit out of 346 units the assessee cannot claim to have completed the whole project within the prescribed limit. Therefore, he held that the submission of the assessee is de void of any merit. He therefore held that, the assessee has not completed the housing project in terms of the outer time limit provided u/s 80 IB (10) of the act i.e. within five years from the end of the financial year in which the approval was granted. 07 The learned assessing officer also noted that assessee has allotted the flats to the related parties for more than one unit and therefore the assessee is not entitled to deduction u/s 80 IB (10) of the act. The assessee on its own surrendered proportionate deduction to the extent of Rs. 58,47,000/-. Consequently, the ld. Assessing Officer disallowed the claim of deduction under Section 80IB (10) of the Act amounting to Rs. 13,00,15,605/- for non-completion within specified limit. Accordingly, assessment order under Section 143(3) of the Act was passed on 22nd December, 2014 determining total income of the assessee at Rs. 213,87,823/-. 08 The assessee challenged the same before the ld. Commissioner of Income Tax (Appeals). The assessee made detailed submission before him on 11.08.2015 reproduced at page 5.1.2 of the order of the ld. CIT (Appeals). Before him, the assessee submitted that project is completed in time. Therefore, order under Section 250(4) of the Act was passed by him giving direction to the AO to ascertain the correct date of completion by obtaining and examining the relevant details from the Development Authority and assessee. The report of the Assessing Officer states that committee of GDA was constituted on 25th October, 2012, inspected the site on 21.02.2013 and on the basis of the documents noting the fact that registration of sale of flat commenced on 21.02.2012 , the GDA stated that the date of completion of the project is 21.02.2011. The Assessing Officer also submitted a copy of the report of the committee. It also gave the minutes of the committee of GDA. The assessee given an opportunity and submitted its rejoinder of 21.02.2015, which is as per para No. 5.1.4 of the order of the ld. CIT (Appeals). The ld. CIT (Appeals) also put before the assessee the decision of the Hon’ble Madhya Pradesh High Court in CIT Vs. Global Reality dated 21.08.2015 Page | 5 wherein it was held that issuance of completion certificate after cut-off date by local authority mentioned the completion of the date of project before cutoff date does not fulfill the required condition of Section 80IB (10) of the Act. The assessee submitted that the case of the assessee on facts is quite difficult. Assessee also submitted a letter of the installer of lift stating that the lifts were installed on 3.12.2011. The ld. CIT (Appeals) held that it is clear that inspection of the site had not taken place before the cut-off date on or before 31.03.2012. He further noted that the committee itself was constituted on 25th October, 2012 i.e. after the cut-off date and the inspection was carried out on 29.01.2013. He, therefore, held that the recommendation of the committee regarding completion of the project is not supported by inspection of the site before cut-off date. He further held that completion certificate merely based on date of registration of sale of flat only. He further noted that with respect to the installation of the lift with the Assistant Director of Electric Security, Ghaziabad, vide letter dated 3.12.2011 certified that the installation of lift is satisfactory. However, some of the lifts have been handed over on 17.11.2011, 27.02.2012 and 31.01.2012. Thus, according to him none of the lifts has been installed before the registration of sale of flats. He, therefore, noted that the registration of one unit on 21.02.2011 was prior to handing over of the lift to the appellant and, therefore, the plea that date of registration should be taken as the date of completion of project is de void of merit. He thereafter referred to the ratio of the Hon’ble Madhya Pradesh High Court in CIT vs. Global Reality (2015) 62 taxman.com 204 held that the appellant has failed to fulfil the condition of clause (a) of Section 80IB (10) of the Act. He confirmed the disallowance of the claim under Section 80IB (10) to Rs.13,00,15,605/-. 09 The assessee also challenged the levy of interest under Section 234B and 234C of the Act. Assessee submitted that as per para No. 6 of the assessment order the appellant had sold 10,000 equity shares of M/s. Gul Page | 6 Properties Pvt. Ltd. for Rs.200 crores. Out of this, assessee received Rs.127 crores in the Financial Year 2007-08. The Assessing Officer stated that assessee has considered the date of sale on 30.03.2012. However, assessee has received more than 51% of consideration in previous years. The assessee ought to have paid the advance tax during the year. As assessee has failed to do so, the Assessing Officer computed that interest liability under Section 234B & 234 C of the Act of Rs. 4.8 crores. 10 The assessee contended that the issue is squarely covered in favour of the assessee by the decision of the co-ordinate bench in the case of Ram S. Sarda Vs. DCIT (2012) 13 ITR (T) 457. The ld. CIT (Appeals) held that if the assessee does not contest the liability of advance tax then assessee couldn’t question the liability of interest under Section 234B of the Act. He, therefore, noted that when advance tax liability is not disputed, it becomes a case of exercise of discretion by the Assessing Officer in levying or not levying interest under Section 234B or 234C of the Act. 11 Thus, assessee aggrieved with the order of the ld. CIT (Appeals) has preferred this appeal before us. 12 The ld. AR on the issue of completion of the housing project for claiming deduction u/s 80 IB (10) of the act, submitted that appellant obtained the approval on 26.09.2006 for developing housing project in the name of Neo Project, Phase–I, as on 11056 sq. mtrs. of land situated at Plot No. 11, Indirapuram, Ghaziabad. The permissibility of 5 years for completion of the project ended on 31st of March 2012. He submitted that assessee submitted a request on 15.02.2011 to GDA for issuance of registration in the name of first buyer of the flats. Accordingly, on 21.12.2011 the first flat was sold at same registration. The Electricity Board on 24.10.2011 approved the installation of lift in various towers. Thus, on 21.10.2011 the process of handing over of the possession to respective buyers submitted. He further stated that Electricity Board on Page | 7 28.11.2011 issued electricity certificate to the project. Thus, based on this on 30.11.2011 the assessee made an application for issuance of completion certificate in respect of the project. He referred to such application placed at Page Nos. 65 of the paper book. He further referred to the letter dated 21.02.2013 issued by GDA confirming the date of completion i.e. 21.02.2011. He further stated that the GDA once again confirmed to the Addl. CIT during the remand proceedings about the date of completion at 21.02.2011. Such communication dated 3.09.2015 was also submitted. He further stated that before 31.03.2012 i.e. the cut-off date 296 flats were already registered in favour of buyers by the GDA. This itself shows that the project was in fact completed before the cut-off date. He further referred to the decision of the Hon’ble Delhi High Court in CIT Vs. CHD Developers Ltd. in 362 ITR 177 (Del.) He specifically referred to Para No. 7 wherein para 8.16 identical facts were considered. He also referred to para No. 9 of that decision. He referred to para No. 10 of that decision wherein the claim of the assessee was allowed following the decision of the Hon’ble Gujarat High Court and Hon’ble Karnataka High Court. He further referred to a decision from paper book where several decisions of the co-ordinate bench were relied upon. He further stated that the decision of the Hon’ble Madhya Pradesh High Court in CIT Vs. Global Reality 379 ITR 107 (M.P.) relied upon heavily by the ld. CIT (Appeals) for confirming the disallowance of deduction has already been stayed by the Hon’ble Supreme Court vide order dated 8.07.2019. He, therefore, submitted that this decision cannot be applied to the facts of the case of the assessee. He further even distinguished the facts of that case and stated that it should not be applied. He extensively referred to the provisions of Section 80IB (10) of the Act. He further submitted that the fact of completion before the cut-off date is also supported by certificate of architect. He further stated that though CIT (Appeals) for this assessment year has not allowed the claim of the Page | 8 assessee. However, he referred to the order of the ld. CIT (Appeals) dated 23.01.2018 for Assessment Year 2013-14 and order dated 10.05.2018 for Assessment Years 2014-15 and 2015-16 wherein the claim of the assessee was thoroughly discussed and the addition on account of disallowance of deduction under Section 80IB(10) of the Act was allowed. He, therefore, submitted that the claim of the assessee deserves to be allowed. 13 The ld. DR heavily relied upon the order of the ld. Assessing Officer and the CIT (Appeals). He also extensively relied on the decision of the Hon’ble Madhya Pradesh High Court in CIT vs. Global Reality and stated that the issue in the case of the assessee is squarely covered against the assessee. It was further stated that merely stating of the decision by the Hon’ble High Court does not obliterate the binding precedent of the order unless it is quashed. With respect to the order of the ld. CIT (Appeals) in subsequent years he submitted that the appeals for Assessment Years 2014-15 and 2015-16 have been dismissed by the co- ordinate bench on account of low tax effect and appeal for Assessment Year 2013-14 is pending before the co-ordinate bench. Thus, moreover the orders of CIT (Appeals) as they have been challenged before the higher forum cannot be an on-going force for appeal at higher forum. In view of this he submitted that the order of the lower authorities so far as disallowance of deduction under Section 80IB (10) is concerned is required to be upheld. 14 We have carefully considered the rival contention and perused the orders of the lower authorities. The facts are clearly stated in the above paragraphs that the approval of the housing project was granted on 26 September 2006. Therefore, the project is required to be completed within five years from the end of the year in which the approval was granted. Thus, the project should have been completed by 31st of March 2012. The assessee filed an application before the Ghaziabad Page | 9 development authority for issue of completion certificate on 30 November 2011, which is placed at page number 65 of the paper book. Along with the application, the assessee submitted the drawings of the buildings duly signed by the architect, the landscaping work as per the sanction drawings, no objection for operating the left, drawings, Mark parking plan, and site plan market with setback. The assessee requested Ghaziabad development authority to issue the completion certificate of the project. The assessee has also obtained a certificate dated 17 August 2012 from M/s Jaiswal & Associates, architects, planners, and engineers who certified that the assessee has developed two bedroom apartments at plot number 11, Vaibhav Khand, Indrapuram, Ghaziabad Under the project name “Shipra Neo”. The approval of the plan for construction of the development was granted by the Ghaziabad development authority on 26/09/2006 on a total plot area at 11,055.99 m². The built-up area of the apartment was also verified and it was certified that the built-up area of two bedroom flat consisting of 346 lakhs in seven blocks having the highest built-up area of one unit of flats in square feet of 999.23 ft² to the lowest built-up area of 934.011 ft². It was also certified that the project has been completed and the possession has already been given to the customers during financial year 2011 – 2012. Consequent to the above request of the assessee dated 30 November 2011 to the Ghaziabad development authority, on 21 February 2013, it issued a letter for payment of fees of ₹ 3,243,830/– and completion certificate stating that date of completion of the project is accepted as 21st of February 2011. The fee was also charged from the assessee from 1/4/2006 to 21st/2/2011. Further, it was also noted that the flat was registered in favour of the buyer on 21 February 2011, which was requested as per letter dated 15 February 2011 to Ghaziabad development authority to register a flat number SNC – 1104. Along with this letter, the assessee has also submitted, and it stated that the construction of above-mentioned flat is Page | 10 according to the approved map and therefore the above let may be registered in the name of the buyer. Further, the committee constituted by the Ghaziabad development authority also certified that the date of completion of the above project is 21 February 2011. Further, a letter was issued by Ghaziabad development authority on 13th of March 2015 to the assessee wherein also the date of completion is stated to be 21st/2/2011. Thus according to the sale deed even the buyer is accepted the possession of the above property in its completeness. Further, on page number 104 of the paper book the assessee has submitted the list of late buyer whose position has been given to them before 31st of March 2012. Assessee has given a list of 102 such buyers who have been allotted flats, possession is granted and the sale deed is registered. When the learned assessing officer asked the Ghaziabad development authority to state the completion date of the above project, a letter dated 3 September 2015 was issued by the Ghaziabad development authority to additional Commissioner of income tax stating that that approval of the plan was granted on 1 April 2006 and the flats in the above project were registered on 21 February 2011 and therefore the date of completion has been taken at 21 February 2011. The learned assessing officer also asked the further information and therefore it gave the information that the committee constituted inspected the property on 29th of January 2013. Therefore the learned assessing officer was of the view that when the inspection of the property has took place only on 9 January 2013 the date of completion could not have been certified by the Ghaziabad development authority on 21st of February 2011. The assessee has also relied on the Uttar Pradesh apartment (promotion of construction, ownership and maintenance) act, 2010 wherein it has been provided that that any apartment can be transferred by the promoter to any person only after obtaining the completion certificate from the prescribed sanctioning authority is for building bylaws. It was further provided that if the Page | 11 completion certificate is not issued by the prescribed sanctioning authority within three months of the submission of the application by the promoter complete with all certificates and other documents required, the same shall be deemed to have been issued after the expiry of three months. It also specifies that the completion mean the completion of the construction work of a building as a whole or the completion of an independent bloc of such building. In view of this the claim of the assessee is that according to that law when the assessee applies for completion certificate to respective authority, and same is not granted within three months of such request, the completion certificate is deemed to have been granted to the assessee after the expiry of three months. In the present case, the assessee made an application on 30 November 2011; therefore, on this ground also the completion date is within the five years limitation. It is also interesting to note that for assessment year 2013 – 14 identically the deduction u/s 80 IB 10 was disallowed by the learned assessing officer however on appeal before the learned and CIT – A allowed the claim of the assessee wide order dated 23 January 2018. Further, similarly for assessment year 2014 – 15 also the learned CIT appeal allowed the claim of the assessee as per order dated 10 May 2018. However, both these orders are in challenge before the coordinate bench. However, the reasons given therein are required to be considered. An interesting fact has been recorded by the learned CIT – A for assessment year 2013 – 14 that during the financial year 2010 – 11 five of the units got registered in favour of the customers by the appellant company and another 291 units were transferred in financial year 2011 – 12 out of the total 346 units constructed by the assessee. Thus 86% of the total units were registered in the name of the ultimate customers before the end of the financial year 2011 – 12, which is also the cut-off date for getting the completion certificate. Therefore, it was held that that the project of the assessee was completed much before the cut-off date as per the Page | 12 provisions of the act i.e. 31st of March 2012. The learned CIT – A noted that that the honourable M P High Court has taken a view in favour of the strict interpretation of the statute as relied upon by the learned assessing officer. He also noted that the honourable Madras High Court in 29 taxmann.com 386, Honourable Gujarat High Court in 362 ITR 174, Honourable Delhi High Court in 362 ITR 177, Honourable Bombay High Court in 377 ITR 150 and various coordinate benches have taken a view which is in favour of the assessee. The learned CIT – A has noted that there is no decision of the Honourable jurisdictional High Court either against the assessee or in favour of the assessee. Therefore, he, relying on the decision of the honourable Supreme Court in the CIT versus Vegetable Products Ltd (1973) 88 ITR 192 decided the issue in favour of the assessee. Coming to the decision of the honourable Madhya Pradesh High Court in 379 ITR 107 , which has been relied upon by the learned assessing officer and CIT A for denying the benefit u/s 80 IB (10) of the act to the assessee on the issue of the completion certificate has been stayed by the Honourable Supreme Court in CIT versus Global Estates in SLP number 35004 – 05/2015. However, stay of a judgment does not obliterate the principles laid down therein, however, where there are several judicial precedents of honourable High Courts in favour of the assessee, same should be followed in the given circumstances. In view of this, we hold that the date of completion of the project has correctly been claimed that 21st of February 2011 and it is in accordance with the provisions of Section 80 IB (10) of The Income Tax Act. Accordingly, we allow ground number [1] of the appeal of the assessee. 15 The [2] ground of appeal is with respect to non-fulfillment of the condition laid down as per clause (f) of Section 80. IB (10) of the act. Here the learned assessing officer has disputed the eligibility to claim deduction u/s 80. IB (10) on the ground that appellant has violated the provisions of clause (f) by allotting more than one residential unit to Page | 13 persons belonging to the same family. The learned assessing officer noted that there are [3] instances where such violation has been noted. The assessee explained that barring the above [3] exceptions there are no such instances when the units have been so sold. The assessee himself submitted before the learned assessing officer that the amount of deduction excess claimed on this account proportionately is only ₹ 52.47 lakhs and it was surrendered. Before the learned CIT – A also assessee submitted that only proportionate disallowance can be made. However the learned CIT – A rejected contentions of the assessee. 16 The learned authorised representative submitted that only proportionate disallowance could be made. The learned departmental representative relied upon the order of the learned and CIT – A. 17 We have carefully considered the rival contention and perused the orders of the lower authorities. This issue is now squarely covered in favour of the assessee by the decision of the honourable Bombay High Court in Kamat Constructions Pvt. Ltd. Vs ACIT (Bombay High Court) Tax Appeal No. 47 of 2016 dated 01/12/2020 AY 2012-13. Accordingly, we hold that only proportionate deduction to the extent of violation of the provisions of Section 80 IB (10) (f) can be made with respect to allotment of the units to the family members/relatives of the allottees. Accordingly, ground number 2 of the appeal of the assessee is allowed. 18 The 3rd ground of appeal is with respect to the charging of the interest u/s 234C of The Income Tax Act and 4 th ground of appeal is with respect to the charging of interest u/s 234B of the income tax act 1961. The facts clearly show that the assessing officer has accepted the returned income of the appellant except the claim of deduction of ₹ 13 crores u/s 80. IB (10) of the income tax act. Assessee has also paid tax on the book profit u/s 115JB of the Income Tax Act , however pursuant to the assessment , the tax liable to was determined under the normal provisions of the Income Tax Act. The fact shows that during the year under Page | 14 consideration the appellant earned long-term capital gain on sale of shares of one private limited company i.e. Gul properties private limited on 30th March 2012. Claim of the assessee is that the above long-term gain transaction materialize on 30 of March 2012 as per transfer of shares on the basis of the execution of transfer deed on receipt of full consideration. Resultantly, tax liability in respect of these transaction did arise on 30 March 2012 only and not prior to that. Therefore the claim of the assessee is that there was no case of any advance tax liability prior to 30/3/2012 as per the provisions of Section 209 read with Section 211 of the income tax act and as such provisions of Section 234C are not applicable. However, the learned assessing officer charged interest Under Section 234C and 234B of the act. 19 On appeal before the learned CIT – A, he rejected the contention of the assessee and held that the appellant could contend that he is not liable to pay any advance tax but if the appellant does not dispute the amount of advance tax determined, he cannot dispute the levy of penalty interest nor question its quantum. For this proposition the learned CIT – A relied upon the decision of the honourable Karnataka High Court in 108 ITR 935 and Bombay High Court in case of 27 ITR 192. The learned CIT – A further referred to the decision of the Honourable Allahabad High Court in case of income tax appeal number 128 of 2004 in case of Lenoleum House V ITO dated 4/10/2012. Therefore, by this ground the assessee challenges charging of the interest u/s 234C and 234B of the Act. 20 The ld AR relied up on plethora of decision of the coordinate benches to support case that no interest is chargeable u/s 234C of the act prior to 30/03/2012. 21 The ld DR relied up on the orders of the LD CIT A. 22 We have heard the rival contentions and perused the orders of the lower authorities. Fact shows that appellant has sold shares worth ₹ 200 crores being 10,000 equity shares of Gul properties private limited. Out of the Page | 15 sale, consideration the appellant received ₹ 127 crores in financial year 2007 – 08 the AO has observed that the appellant has considered the date of sale to be 30 March 2012. The CIT – A of the view that appellant having received more than 51% of the consideration in previous years the appellant ought to have paid advance tax during the year Under account and therefore the interest liability u/s 234B and 234C of the act are leviable. The learned CIT – A relied heavily on the decision of the Honourable Allahabad High Court. However on careful reading of the decision of the honourable Allahabad Court, it was on the issue that Where assessment made originally by Assessing Officer is either varied or even set aside by appellate authority, but on further appeal, original order of Assessing Officer is restored either in part or wholly, interest under section 220(2) shall be computed with reference to date reckoned from original demand notice and with reference to tax finally determined. Therefore, according to us the above decision does not have any applicability to the facts of the case. According to the proviso to provisions of Section 234C (1) (a) itself provides that nothing contained in the provisions of Section 234C shall apply to any shortfall in the payment of tax due on the returned income whereas such shortfall is on account of Under estimate or failure to estimate the amount of capital gain. Further, the case of the assessee is also supported by the decision of the honourable Rajasthan High Court [2003] 264 ITR 744 (Rajasthan)/ [2003] 185 CTR 601 (Raj) in Commissioner of Income-tax v. Smt. Premlata Jalani as well as the decision of the coordinate benches in case of Kumari Kumar Advani versus ACIT (ITA number 7661/Mum/13), Ridhi Sidhi Gluco Boils Ltd V ACIT (ITA number 27/Ahd/15). In view of this, the learned assessing officer is directed to compute interest u/s 234C in accordance with the above decisions. As the assessee has earned capital gain as on 30th of March 2012, i.e. 23 before the close of the year, the interest is chargeable u/s 234B of the Page | 16 act. Further, the interest u/s 234B of the act arises only at the close of the financial year, by that time the income from capital gain arose to the assessee and interest u/s 234B is chargeable to tax in accordance with the law. 24 In view of this, the learned assessing officer is directed to recompute the interest chargeable u/s 234C and 234B of the act. In the result ground number 4 of the appeal of the assessee is allowed and ground number [3] of the appeal of the assessee is dismissed. 25 In the result, appeal of the assessee is partly allowed.