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Income Tax Appellate Tribunal, “J”, BENCH
Before: SHRI R.C.SHARMA, AM & SHRI PAWAN SINGH, JM
per law. We direct accordingly.
Ground No. 15 of the appeal for the A.Y. 2012-13 is with regard to incorrect computation of interest U/s 234B/234C due to non- credits/short credits granted to the assessee. We direct the A.O. to verify the computation of interest U/s 234B of the Act. With regard to interest U/s 234C, we direct the A.O. to charge the same on returned income and not on the assessed income.
In the appeal for the A.Y. 2013-14, similar grounds have been taken.
Ground No. 1 is general in nature and does not require any adjudication.
Grounds No. 2 to 11 of the appeal are with regard to notional interest. As observed in the A.Y. 2012-13, we restore the matter back order of the Tribunal for the A.Y. 2009-10.
Ground No. 12 of the appeal is with regard to computation of interest U/s 244A of the Act. It was argued by the ld AR that on perusal of the refund order and income tax computation sheet, it is observed that the AO has granted refund of Rs. 10,41,05,950/- alongwith interest U/s 244A of Rs. 1,62,52,824/-. He further submitted that the assessee has received the refund cheque on 7th July 2017.
Accordingly, the assessee was entitled to interest till July 2017 (i.e. for 52 months i.e. from April 2013 to July 2017). However, the A.O. has granted interest u/s 244A of the Act only for 37 months.
On the other hand, the ld DR has relied on the orders of the authorities below.
We have considered the rival contentions and carefully gone through the orders of the authorities below. As per the provisions of Section 244A of the Act, interest on refund is to be allowed @ 0.50% per month from the 1st day of April of the assessment year to be date on which the refund is granted. Accordingly, the assessee is entitled for interest u/s 244A of the Act up to the date on which the refund is granted. The A.O. is directed to verify the correctness of interest and grant necessary refund as per law. profit U/s 115JB of the Act by adding the disallowance on account of depreciation on office premises.
During the year under consideration, the AO has made disallowance of tax depreciation of Rs. 4,29,332/- on the cost of the office premises. Further, the A.O. has also made this disallowance to the book profits as per Section 115JB of the Act. The contention of the assessee was that for the purposes of computation of book profits as
per explanation 1 to Section 115JB(2) of the Act, the profit/loss in the profit and loss account is increased by amount of depreciation as per the books and shall be reduced by amount of depreciation debited to the books (excluding depreciation on account of revaluation of assets).
Accordingly, depreciation as computed under the Income Tax Act, 1961 is not relevant for book profit computation.
In this regard we observe that the Hon’ble Supreme Court in the case of Apollo Tyres Ltd. Vs CIT (2002) 255 ITR 273 (SC) have observed that while computing income U/s 115J, the A.O. has only power of examining whether books of account are certified by authorities under Companies Act as having been properly maintained in accordance with Companies Act and thereafter, he has limited power of making additions and reductions as provided for in Explanation to said go behind net profit shown in the P&L account except to extent provided in Explanation to Section 115J of the Act. Respectfully following the decision of the Hon’ble Supreme Court, we do not find any justification in the order of the TPO/A.O. for making addition of the depreciation while computing book profit.
In the result, both the appeals of the assessee are allowed in part in terms indicated hereinabove.
Order pronounced in the open court on 08th January, 2020.