Krishana Shanwal Vs DCIT (ITAT Delhi)
Assessee had filed return declaring income of Rs.52.49 lakh. The case was selected for limited scrutiny for issues relating to claim of relief u/s 89, mismatch between salary income in ITR & Form 26AS, and variation between ITR income & Annexure II of employer’s TDS return in Form 24Q.
AO observed that Assessee had received salary arrears with interest of Rs.68.15 lakh but excluded interest portion while claiming relief u/s 89. The claim of relief of Rs.9.28 lakh was denied & addition was made treating the benefit as Nil. CIT(A) confirmed, holding that interest granted by Hon’ble Punjab & Haryana High Court was taxable.
Before Tribunal, Assessee submitted that AO himself had rectified the computation by passing order u/s 154 allowing full relief u/s 89(1) & refund of Rs.9.25 lakh. Hence, there was no surviving addition on account of interest income. It was argued that CIT(A) wrongly confirmed addition which did not exist post rectification.
Tribunal noted that AO had already deleted the addition by passing rectification order u/s 154. Therefore, there was no liability on Assessee towards the claim of relief. CIT(A)’s finding that interest was taxable was infructuous since no addition was made on that count. On verification of record, Tribunal held that the addition made originally stood nullified by rectification & consequently the appeal of Assessee was allowed.
