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2013 (11) TMI 1577 - HC - Income TaxLiability to tax interest does not arise unless it accrues to the assessee - Not when the refund is actually granted in the relevant assessment year in MODVAT Credit - In interest u/s- 244A of the Act" - HELD THAT:- If an amount is due on a particular date and if that amount is unpaid on that date but paid on a subsequent date the recipient of that amount is deprived of legal due payment till actual payment. To compensate the denial of the benefit of the due payment interest is levied. It is not dependent on the claim in any legal proceedings when the assessee has received the money by interest on refund and the said amount required to be shown in the returns as an income making liable to pay tax. The amount offered for tax is not dependent on said interest became irrevocable or refundable. Therefore, the said finding is contrary to law and cannot be sustained. Thus, set aside. As the matter is already remitted to the assessing authority, firstly interest refunded should be calculated and the amount of refund on the subsequent orders by which the said benefit is sought to be withdrawn and thereafter calculate the interest taxable. Allowance of provision for advances as a revenue expenditure by furnishing details without actual examination of those details - HELD THAT:- the direction given to Assessing Authority to allow the deduction for provision for advances. Further, observed that corresponding adjustment to the income exempted under Section 10A would also be warranted. Deduction allowed for amount of expenditure incurred by the corporate office to 10A units despite non-involvement in any activity other than earning income mainly interest and dividend - HELD THAT:- the assessee is entitled to the benefit of deduction and thus answered in favour of the assessee and against the Revenue. - Decision in the case of Wipro Limited [2010 (8) TMI 1053 - KARNATAKA HIGH COURT] followed Expenditure allowance for Provision for warranty expenses despite not being written off & treated as the contingent liability - HELD THAT:- provision for warranty is rightly made by the appellant because it has incurred a present obligation as a result of past events. There is also an outflow of resources. Therefore, the appellant has incurred a liability during the relevant assessment year which was entitled to deduction u/s. 37 of the 1961 Act. Therefore, all the three conditions for recognizing a liability for the purposes of provisioning stands satisfied in this case. There are provisioning which relates to-
Keeping in mind all the four aspects, we are of the view that the High Court should not to have interfered with the decision of the Tribunal in this case. The decision in the case of Rotork Controls India (P.) Ltd. v. CIT [2009] CHENNAI [2009 (5) TMI 16 - SUPREME COURT] followed. Total turnover of software business taken into account for obtaining deduction u/s- 80HHE - HELD THAT:- the sales tax and excise duty has to be excluded from the turnover for computing deduction under Section 80HHE of the Act, accordingly answered in favour of the assessee and against the Revenue. The decision in this case of CIT v. Laxmi Machine Works [2007 (4) TMI 202 - SUPREME COURT] followed. Raising additional substantial question of law - Non-consideration of the claim for capital loss as a colourable devise - Allowing the capital loss based upon the statements made in the affidavits of the Revenue in the matter relating to interim relief for stay of refunds - Allowance of the capital loss suffering from perversity - "Subterfuge or contrivance" - obligation of every citizen to pay the taxes without resorting to subterfuges - Colourable devices - Tax Evasion vs. Tax Planning - HELD THAT:- "tax planning may be legitimate provided it is within the frame work of law". "Colourable devices cannot be a part of tax planning and it is wrong to encourage or entertain the belief that it is honourable to avoid payment of tax by resorting to dubious methods". It is an obligation of every citizen to pay the taxes without resorting to subterfuges. Decision in the case of VODAFONE INTERNATIONAL HOLDINGS BV. VERSUS UNION OF INDIA & ANR. [2012 (1) TMI 52 - SUPREME COURT] and MCDOWELL AND CO. LIMITED VERSUS COMMERCIAL TAX OFFICER [1985 (4) TMI 64 - SUPREME COURT] - followed
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