Income Tax Cases - Deduction u/s 80HHC and claim of for depreciation – Penalty u/s 271(1)(c) - Revenue Expenditure Vs. Capital Expenditure – Cash Credit - Claim of refund of deemed TDS on the basis of DTAA

1

Income Tax - 2008 - TMI - 4036 - MADRAS HIGH COURT

Excise duty, sales tax & conversion charges will not be included in total turnover, while computing deduction u/s 80 HHC - whether expenses on replacement of machinery are revenue/capital expenditure will be determined by provisions of IT Act not on basis of accounting practice of assessee - they are revenue expenditure as entire plant & machinery are common unit - when no claim for depreciation was made before any authorities to consider question of block of assets no question of law arise

2

Income Tax - 2008 - TMI - 4035 - ANDHRA PRADESH HIGH COURT

AO has to form his own opinion & record his satisfaction, of concealment of income or furnishing of inaccurate particulars of income, before initiating penalty proceedings u/s 271(1)(c) - assessment was completed accepting the returned net income as per the revised return - both assessment order & SCN are silent about such satisfaction of AO - Nothing has been placed by Revenue to show that any other material was available with AO to confirm concealment - penalty set aside

3

Income Tax - 2008 - TMI - 4034 - DELHI HIGH COURT

Service charges paid by assessee to Electricity board for laying the service line for 4th unit - AO held that benefit derived by assessee was of an enduring nature so it is capital expenditure - Setting 4th unit is extension of existing business, not start of new business - held that service lines didn't belong to assessee but to Electricity board & were laid to enable assessee to conduct its business more efficiently - benefits are of commercial nature so they are revenue expenditure

4

Income Tax - 2008 - TMI - 4033 - PUNJAB AND HARYANA HIGH COURT

Genuineness of the credit was doubted AO - considering the explanations furnished by assessee, AO vide its order of assessment held cash credits, to be not genuine and accordingly made additions - Merely because in some case the amount was also shown to have been returned does not prove that the transaction in question was genuine or bonafide - No explanation furnished as to why impugned persons have advanced amount to assessee without any interest - addition were justified

5

Income Tax - 2008 - TMI - 4032 - PUNJAB AND HARYANA HIGH COURT

Cash credits - assessee had failed to discharge the burden which lay upon it to prove the genuineness of the credits shown in its account - therefore, it is not possible to agree with learned counsel that the Assessing Officer had illegally made additions to the income of the assessee - findings