Ita/38/2009 Of Commissioner Of Income Tax,Trichur v. Kerala State Financial Enterprises Ltd

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE K.SURENDRA MOHAN WEDNESDAY, THE 4TH MARCH 2009 / 13TH PHALGUNA 1930 ITA.No. 38 of 2009() -------------------- ITA.650/COCH/2007 of I.T.A.TRIBUNAL,COCHIN BENCH .................... APPELLANT: ------------------------------ THE COMMISSIONER OF INCOME TAX, THRISSUR. BY ADV. SRI.JOSE JOSEPH, SC, FOR INCOME TAX RESPONDENT(S): RESPONDENT: -------------------------- M/S.KERALA STATE FINANCIAL ENTERPRISES LTD., 'BHADRATHA', MUSEUM ROAD, THRISSUR. THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 04/03/2009 ALONG WITH ITA NOS. 39 TO 41/2009 THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C .N. RAMACHANDRAN NAIR & K. SURENDRA MOHAN, JJ. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - I.T.A. Nos. 38 to 41 OF 2009 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Dated this the 4th day of March, 2009 JUDGMENT Ramachandran Nair,J. The question raised is whether the Tribunal was justified incancelling rectification order issued under Section 154 of the I.T. Actby the assessing officer withdrawing the deduction granted towardsinterest tax paid on finance charges received in hire purchasetransactions. The issue arose because of the divergent ordersissued by different authorities in interest tax assessments. Thedemand of interest tax paid on finance charges was allowed in I.T.assessment by way of rectification of original assessment, when theassessee in fact paid the interest tax on finance charges. However,the assessee successfully contested the interest tax assessment onfinance charges and got it deleted. Thereafter income taxassessment was again rectified by the assessing officer withdrawingthe deduction granted on interest tax on finance charges which theassessee ceased to be entitled by virtue of the order of the Tribunalin the interest tax appeals filed by the assessee. It is this order thatis cancelled by the Tribunal on the ground that Section 154 is not applicable. In the course of hearing, standing counsel appearing forthe appellants submitted that the assessee has paid tax on theinterest tax amount refunded to it with interest for the relevantassessment years which are 2005-06 and 2006-07. If we allowappeals without rectification of assessments for the years 2005-06and 2006-07 to cancel the assessment of refund amounts, there willbe double taxation of the same amount. In this view of the matter,we dismiss the departmental appeals without going into thecorrectness of the decision of the Tribunal. However, we make itclear that the assessee is not entitled to rectification or modificationof the assessments for the years ;2005-06 and 2006-07 pertaining toassessment of refund of interest tax. Since appeals are disposed ofat the admission stage, there will be direction to the Registry toforward a copy of this judgment to the respondent-assessee for theirinformation. (C.N.RAMACHANDRAN NAIR)Judge.Judge. (K. SURENDRA MOHAN) Judge. kk