Issue is covered by the decision of Hon’ble Supreme Court in the case of JCIT Vs Rolta India Ltd. 330 ITR 470 wherein it has been held that in case of company which are liable to tax u/s. 115JB / minimum alternative tax , have to pay interest u/s. 234B/234C of the Act.
INCOME TAX APPELLATE TRIBUNAL, MUMBAI
ITA No. 6665/Mum/2010 – Assessment Year-2007-08
Govind Properties Pvt. Ltd. Vs. ACIT
Date of pronouncement: 23.05.2012
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PER N.K. BILLAIYA (AM):
The present appeal filed by the assessee is directed against the order of Ld. CIT(A)-4, Mumbai dt. 14.7.2010 for assessment year 2007-08.
2. The assessee has raised two grounds of appeal. By Ground No. 1, the assessee has questioned the validity of the action of the Ld. CIT(A) who confirmed the disallowance made u/s. 14A of the Act r.w. Rule 8D.
3. During the course of assessment proceedings, the Assessing Officer found that the assessee has claimed dividend income of Rs. 1,44,250/- as exempt from tax. It was also noticed by the AO that assessee has not allocated any expenditure. Therefore, the AO applying Rule 8D went on to calculate the expenditure to be allocated to the dividend income of Rs. 1,44,250/-. The AO determined Rs. 2,96,563/- as the disallowable amount.
4. Before the Ld. CIT(A) assessee showed its grievance but without any success.
5. Aggrieved by the order of Ld. CIT(A), assessee is in appeal before us. The Ld. Counsel for the assessee argued that applying Rule 8D for the year under consideration is against the ratio laid down by the Jurisdictional High Court of Bombay in the case of Godrej & Boyce Mfg. Co. Ltd. Vs DCIT 328 ITR 81.
6. We agree with the Ld. Counsel that the Hon’ble Bombay High Court has held that Rule 8D of I.T. Rule is prospective in nature and is applicable from 1.4.2008. Accordingly, we set aside the orders of authorities below and restore the matter to AO with a direction to re-decide the same after giving due opportunity of hearing to assessee as per law, without applying rule 8D. Therefore, ground No.1 taken by the assessee is allowed for statistical purposes.
7. In ground No. 2 the assessee has shown its grievance against levy of interest u/s. 234B/234C of the Act on the ground that the income has been computed u/s.115JB.
8. We find that this issue is covered by the decision of Hon’ble Supreme Court in the case of JCIT Vs Rolta India Ltd. 330 ITR 470 wherein it has been held that in case of company which are liable to tax u/s. 115JB / minimum alternative tax , have to pay interest u/s. 234B/234C of the Act. We therefore direct the AO to levy interest as per provisions of the Act after giving effect to the decision of ground No. 1.
9. In the result, the appeal filed by the assessee is partly allowed.
Order pronounced on this 23rd day of May, 2012