Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2015 (12) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (12) TMI 1420 - HC - Income TaxAddition u/s.41(1)- unclaimed 'stale draft and pay orders' - ITAT deleted the addition - Held that:- Section 41(1) can be pressed into service when an allowance or deduction is sought to be made in respect of loss, expenditure or trading liability is incurred by the assessee. In the instant case, the sum of ₹ 58,38,581/- has remained with the assessee owing to the fact that the payees or holders of the draft/pay orders had not encashed them. The language employed by the legislature being unambiguous, it would be incongruous to construe the said sum as either a loss, expenditure or trading liability incurred by the assessee. Hon'ble Supreme Court in the case of T.V. Sundaram Iyengar (1996 (9) TMI 1 - SUPREME Court) held that the provisions of s.41(1) were not attracted in the facts of this case because the assessee's liability to pay back the amounts to its customers had not ceased. - Decided in favor of assessee Depreciation on investments on government securities "held to maturity" - whether such securities were held as a investments and not as 'stock-in-trade'? - Held that:- Admittedly in the instant case, assessee was following the method of accounting namely, "at cost or market value, whichever is lower". Further, it is not in dispute that this practice was accepted by the Revenue throughout. Thus, in the light of the above pronouncement in the case of United Commercial Bank (1999 (9) TMI 4 - SUPREME Court) notwithstanding the preparation of the balance sheet and describing the security under a particular nomenclature in compliance with the directions/instructions issued by the RBI, the assessee would be lawfully entitled to submit the tax returns on the real taxable income in accordance with the method of accounting consistently and regularly adopted.- Decided in favor of assessee
|