Home Case Index All Cases Income Tax Income Tax + SC Income Tax - 2018 (4) TMI SC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (4) TMI 1472 - SC - Income TaxDeduction on account of lease equalization charges from lease rental - significance of Guidance Note issued by the Institute of Chartered Accountants of India (ICAI) - Held that:- It is wrong to say that the Respondent claimed deduction by virtue of Guidance Note rather it only applied the method of bifurcation as prescribed by the expert team of ICAI. A conjoint reading of Section 145 of the IT Act read with Section 211 (un-amended) of the Companies Act make it clear that the Respondent is entitled to do such bifurcation and in our view there is no illegality in such bifurcation as it is according to the principles of law. The rule of interpretation says that when internal aid is not available then for the proper interpretation of the Statute, the court may take the help of external aid. No force in the contentions of the Revenue that the accounting standards prescribed by the Guidance Note cannot be used to bifurcate the lease rental to reach the real income for the purpose of tax under the IT Act. Thus the Respondent is entitled for bifurcation of lease rental as per the accounting standards prescribed by the ICAI. There is no express bar in the IT Act regarding the application of such accounting standards. Deduction on account of lease equalization charges from lease rental income can be allowed under the Income Tax Act, 1961,
|