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Case Title: The Principal Commissioner of Income Tax, Ranchi V. Manoj Kapoor.

Decided on August 16, 2023.

Case No.: T.A. No. 55 of 2019.

CORUM: HON’BLE MR JUSTICE RANGON Mukhopadhyay AND HON’BLE MR.

                JUSTICE DEEPAK ROSHAN.

Introduction

The instant appeal is directed against the impugned Judgement on dated 22.05.2019, passed by learned Income Tax Appellate Tribunal SMC bench Ranchi. In ITA No. 86/Ran/19. In which the question of dispute is the interest has to be charged on the assessed income or only the return income of the assessee. The divisional bench of Hon’ble Mr. Justice Rangon Mukhopadhay and Hon’ble Mr. Justice Deepak Roshan of the Hon’ble High Court Jharkhand observed the case and held that under the provision of Section 234B of Income Tax Act, 1961. That the interest has to be charged on the total income of the assessee and not only on the income return on the assessee.

Facts of the case

The assessee is an individual and deriving income from trading of spare parts of motorcar and mobile phones. Assessee filed its return in which he mentioned his total income Rs. 6,61,080/ electronically on dated 17.09.2015.The case of assessee selected for the scrutiny. The assessee voluntary surrendered LTCG for taxation. The AO has submitted the entire receipt amount from the sale of share Rs.10,45,266/- including the cost price/investment made by the assessee amounting to Rs.5,40,000/- as unexplained investment U/S 69 of the Act.

Courts analysis

The assessee carried the matter before the CIT (A) in which CIT (A) upheld the action of A.O. aggrieved by the order of CIT (A) the assessee preferred an appeal before the ITAT SMC bench Ranchi in which ITAT directed the A.O. to delete the Rs.5,40,000/- out of total addition made under Section 69 of the Act. Also directed to A.O. to charge only returned income U/S 234B of the Act. The Hon’ble High Court observed that in the present case the Ld. ITAT relying on the Ajay Prakash Verma (supra) has, erroneously held that the interest should be charged on return income not on assessed income, and also observed that the said finding of the Ld. ITAT is totally contrary to the amended provision of the Finance Act, 2001 and Finance Act, 2006. The Hon’ble High Court ordered that the interest should be charged on the total assessed income. The Hon’ble Court given the decision in the favor of revenue officer and against the assessee.

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Written by: Aamir Hussain.

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