NIRMA LTD. Vs. ADDITIONAL COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) This Tax Appeal u/s.260A of the Incometax Act, 1961 is filed against the order dated 30.12.2005 passed by the Income Tax Appellate Tribunal, Ahmedabad in ITA No.2388/Ahd/2000 raising the following substantial question of law for our determination:

(2.) The assessee is a public company engaged in the business of manufacture of detergents and intermediate industrial products. For the A.Y. 199495, the assessee filed its return on 23.11.1994 declaring total income of Rs.20,39,77,990/. The return was processed u/s.143(1)(a) and ultimately, the assessment order was passed on 08.01.1997. Against the said order, the assessee preferred appeal before the CIT(A). The CIT(A) partly allowed the appeal vide order dated 22.12.1998. However, being aggrieved by the order of CIT(A), the Revenue preferred appeal before the Tribunal. The said appeal was allowed vide order dated 30.12.2005. Hence, this Tax Appeal at the instance of assessee.

(3.) Mr. B.S. Soparkar, learned counsel appearing for the assessee, submitted that the assessee had paid advance tax aggregating Rs.9.00 Crores and S.A. Tax aggregating Rs.1.60 Crores. After deducting the taxes and TDS amount, there was a refund of Rs.60,22,161/. The A.O. issued intimation u/s.143(1)(a) of the Act and refund was worked out for Rs.59,38,056/. Thereafter, the assessment order u/s.143(3) of the Act was passed on 08.01.1997 determining income of Rs.26,15,69,680/. After the order of CIT(A), the income was revised to Rs.23,14,72,720/. In the assessment order, interest u/s.234B was charged on the higher amount on account of the withdrawal of the refund of Rs.59,38,056/. However, the Tribunal seriously erred in holding that interest u/s.234B should be charged on the balance amount after considering refund of Rs.59,38,056/ issued on passing intimation u/s.143(1)(a) of the Act.