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1999 (8) TMI 124

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..... sed. 2. Ground No. 1 is against the sustenance of addition of Rs. 20,16,217 collected by the assessee under RST Deferment Scheme, 1987. The same was disallowed under s. 43B by the AO. The AO noted from the audit report that the sales-tax was not deposited as per the Government of Rajasthan and Maharashtra Sales Tax Department Schemes. Assessee was required to explain and it was submitted that the deduction was claimed as per Board's circular. After examining the Board's circular the AO was of the view that the provisions of s. 43B are clearly applicable as assessee failed to file copy of Notification regarding amendment in RST Act. CIT(A) also confirmed the addition. While confirming the addition, CIT(A) has noted that no copy of amendmen .....

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..... 4 of the Circular says that "The matter has been examined in consultation with the Ministry of law and the various State Governments. The Ministry of Law has opined that if the State Governments made an amendment in the Sales-tax Act to the effect that the sales-tax deferred under the scheme shall be treated as actually paid, such a deeming provision will meet the requirements of s. 43B". In para 6 it is stated that "The CIT may bring the contents of this circular to the notice of all officers working under them". 6. A copy of "Law of Sale Purchase tax in Rajasthan" is placed at paper-book p. 1, and at Sl. No. 696 it is mentioned as under: "S.O. 136- In exercise of the powers conferred by s. 7(2B), RST Act, 1954, the State Government .....

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..... cl. 9 for the expression "RST Act, 1954", wherever occurring, the expression 'CST Act, 1956' should be read. Other variations, if any, in the scheme under the CST Act have been noted in the foot notes in italic type." 7. By reading all these ingredients of the Notification and of the circulars, it is clear that the Government has notified the amendments and accordingly the assessee is eligible for the benefits of Deferment Scheme and, therefore, for the purpose of s. 43B the onus is discharged by the assessee and accordingly provisions of s. 43B are not applicable on the facts of the assessee's case. In case of Gwalior Air Products vs. HO (1992) 44 TTJ (Del) 203, the Delhi Bench of Tribunal has decided the similar issue wherein it was hel .....

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..... HH first and on remaining amount the deduction of s. 80-I was allowed. It was agitated before the CIT(A) that both the deductions have to be allowed simultaneously and from the profit and gains of the year as per P L a/c. The CIT(A) was of the view that there is no defect in the order of the AO who rightly allowed the deduction under s. 80-I of the Act after reducing deduction allowable under s. 80HH of the Act. 9. We have heard the rival submissions and considered the matter carefully. After considering the matter carefully, we find that here also the assessee deserves to succeed. The provisions of s. 80HH(9), which says that "the deduction under s. 80HH will be given first". It does not say that the deduction under s. 80-I will be given .....

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..... 1997) 59 TTJ (Ahd) 688 the similar decision was given wherein it was held that deduction under s. 80-I should be allowed at 25 per cent of the gross total income without deduction of relief under s. 80HH. In case of J.P. Tobacco (P) Ltd. vs. CIT (1997) 140 CTR (MP) 329 : (1998) 229 ITR 123 (MP), the Hon'ble M.P. High Court also decided this issue wherein it was held that relief granted under s. 80HH not to be deducted from the gross total income for the purpose of relief under s. 80-I. In this case the decision of the Tribunal was reversed and it was held that the Tribunal was not right in holding that deduction under s. 80-I is to be allowed only on the balance of the income after deduction of the relief under s. 80HH from the gross tota .....

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..... covered under s. 40A(2)(b). He noted that after taking into consideration the advances to those persons the total interest chargeable works out to Rs. 1,12,902 whereas the interest on interest free unsecured loans works out to Rs. 71903 only. Accordingly difference of these two amounts is Rs. 41,000 and the same was disallowed. CIT(A) also confirmed the action of the AO who noted that there were advances more than Rs. 2,19,427 on which no interest was charged. It was further observed that these advances were to the sister concern on which applicability of the provisions of s. 40A(2)(b) is not denied. Accordingly he held that the AO was right in disallowing the interest of Rs. 41,000. 11. After hearing rival submissions and considered the .....

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