TMI Blog1995 (3) TMI 174X X X X Extracts X X X X X X X X Extracts X X X X ..... ged in the manufacture of pressure blasting machines and their designs were made with the help of computers. For this and such other reasons the learned CIT(A) upheld the claim of the assessee. 3. Before us also the assessee produced evidence of having taken the aid of computers in preparing the designs of the manufactured products. Besides this, inventory control is also an essential part, not only of financial accounting but also of the manufacturing activity as a whole. We are of the opinion that to relegate down the computer merely to the position of an office equipment, is too narrow an outlook as regards the wonders a computer is capable of working. There is hardly any activity where computer cannot be useful and hence there is no r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made before the learned CIT(A). 7. We are inclined to agree with the learned CIT(A). Any device which has the effect of reducing the incidence of tax, is not necessarily a colourful device liable to be demolished by the ratio of the Supreme Court's decision in the McDowell Co. Ltd. vs. CTO (1985) 47 CTR (SC) 126 case. In order to invoke the provisions of Expln. 3 to s. 43(1), it is incumbent upon the AO first to establish that the device adopted by the assessee was either contrary to any law, or against accounting principles or against accepted practices and by using such device singly or in combination with others, it has resulted in depriving the exchequer of its legitimate revenue. Unless these two conditions are fulfilled, the AO is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stalment. Such income may have been credited in the books on appropriate dates, but while making estimate, may wrongfully conceal it, or say even make a wrongful entry in the books at a date later than the dates on which the instalments are falling due. In either case, the effect is that the advance tax which the assessee was liable to pay either on first instalment or the second instalment becoming due, gets wrongfully deferred to the third instalment. These situations are only illustrative, but these and such other situations or conduct of the assessee may lead to the postponement of payment of advance tax, and the law, therefore, seeks to levy interest on such wrongful postponements. Hence, before levying interest under s. 216, it become ..... X X X X Extracts X X X X X X X X Extracts X X X X
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