Harisankar V. Menon, J.

This appeal, at the instance of the assessee, seeks to challenge the order dated 19.05.2020 of the Income Appellate Tribunal, Cochin Bench in I.T.A. No.128/Coch/2017, as regards the assessment year 2012-13.

2. While processing the return of income filed by the assessee under Section 143 (3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’), the Assessing Officer (AO) noticed that interest was paid by the assessee on Agricultural Income Tax (AIT) dues at Rs.94,00,179/- and disallowed the claim made by the assessee invoking the provisions of Section 40 (a)(ii) of the Act, read with Rule 7A of the Income Tax Rules, 1962 (hereinafter referred to as ‘the Rules’) adding back 35% of the interest paid as above, amounting to Rs.32,90,063/-. The first appellate authority, while disposing of the appeal filed against the afore assessment, took the view that disallowance ought not to have been with reference to (a)(ii) and it ought to have been with reference to Section 37 of the Act.

The AO was, therefore, directed to verify whether the amount of Rs.94,00,179/- was towards the delayed payment of AIT and if so, to disallow the said amount in its entiret