New User   Login      
Tax Management India .com TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2015 (8) TMI 428 - GUJARAT HIGH COURT

2015 (8) TMI 428 - GUJARAT HIGH COURT - TMI - Disallowance made under Section 32AB - Investment deposit account - ITAT deleted disallowance - Held that:- No perversity with regard to findings of both the Courts below with regard to conclusion arrived at that the income was earned during the course of business activity. The term "profits of business or profession" is defined under sub-section (3) of Section 32AB. As per that subsection the profit shall be an amount of profit as computed in accord .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Thus, there is no doubt that the business of the assessee company is an eligible business. The fact that it is shown under a different head of income would not deprive the company of its benefit under Section 32AB. - Decided in favour of assessee. - TAX APPEAL NO. 452 of 2000 - Dated:- 1-7-2015 - MR. A.J.DESAI AND MR. A.G.URAIZEE, JJ. FOR THE APPELLANT : MR NITIN K MEHTA, ADVOCATE FOR THE RESPONDENT : JUDGMENT : (PER : HONOURABLE MR.JUSTICE A.J.DESAI) By way of the present appeal under Section 2 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ng certain income of the respondent under the provisions of Section 32AB of the Act. The Assessment Year under the present case is of 1990- 91. 2 At the time of admission, the following question was framed as substantial question of law for determination of the Court: "Whether on the facts and in the circumstances of the case, the Appellate Tribunal has substantially erred in law in deleting the disallowance made under Section 32AB of the Income-tax Act, 1961 ?" 3 The brief facts givin .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ny submitted details by producing various documents. The respondent company was heard by the Assessing Officer on various dates. Thereafter, the Assessing Officer by passing order, rejected the claim of the assessee of claiming amount of ₹ 34,37,020 as part and parcel of business income under Section 32AB of the Act on the ground that the assessee failed to furnish the details of each and every item and that the same cannot be treated as eligible business income. 5 The said assessment orde .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

also filed Cross Objections against the decision which was held against it by the lower authority. The said appeal preferred by the Revenue came to be dismissed and the cross objections filed by the present respondents are allowed. Hence, this appeal is by the Revenue. 7 Mr Nitin K Mehta, learned advocate for the appellant has vehemently submitted that both the authorities below have committed a grave error in accepting the claim made by the assessee as far as provisions of Section 32AB is conce .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

He would next submit that the Officer has rightly excluded the income of bank interest, interest on FDR, computer service charges, insurance premium, profit on sale of assets and occupancy charges while calculating the total income of the assessee. He would submit that this income earned by the assessee, cannot be treated as an income earned from the eligible since the assessee has failed to prima facie establish that the above referred income is earned by the assessee, in connection with the b .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

562 (SC). He would submit that the Apex Court while dealing with the provisions of Section 32AB, more particularly with regard to eligible business income, has categorically held that the assessee has to establish that certain income earned by the assessee is part of its business. 8 Mr Mehta has also relied upon the decision of the Gauhati High Court in the case of Commissioner of Income-tax v. Dinjoye Tea Estate (P) Limited, 224 ITR page 263. By relying upon this decision, he would submit that .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ctual aspects are concerned. He would, therefore, submit that under Section 32AB of the Act the assessee is entitled to keep certain income out of chargeable income. 10 In the present case, the assessee has claimed deduction of 20% profit of eligible business income under Section 32AB, which is accepted by the CIT (Appeal) as well as the Tribunal by relying upon the provisions of Section 32AB as well as the ratio laid down by the, Tribunal itself, this Court and the Honourable Supreme Court. By .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n by the assessee under different head would not deprive the business of its benefit under Section 32AB. Profits of the assessee are to be computed in accordance with the requirements of Part II and III of the Schedule VI to the Companies Act. The Assessing Officer while computing eligible deduction cannot reconmpute the profit of the assessee. The Supreme Court has dealt with the issue under Section 115J of the Act and the language of the Act in Section 32AB is identical as far as profits being .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

mmissioner of Incometax v. Parle Biscuits Limited, [2006] 282 ITR 547 (Bom) where it has been held that income from interest, rent, dividend, etc. would be covered under Section 32AB of the Act. Mr Soparkar has also relied upon the decision rendered by the Division Bench of Gauhati High Court in the case of Williamson Financial Services Limited v. Commissioner of Income-tax and another, [2007] 290 ITR 385 (Gawhati), by which it has been held that interest and dividend income are to be included i .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

c. earned during the course of business would fall within business income, as per the provisions of Section 32AB of the Act. He would, therefore, submit that the appeal be dismissed. 14 We have heard learned advocates appearing for the parties at length. Since the case is of the Assessment Year 1990-91 the relevant provisions applicable on the said date would be necessary to be referred to for proper appreciation. First of all, we would like to reproduce hereinbelow the provisions of Section 32A .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ore furnishing the return of his income, which-ever is earlier; or (b) utilised any amount during the previous year for the purchase of any new ship, new aircraft, new machinery or plant, without depositing any amount in the deposit account under clause (a), in accordance with, and for the purposes specified in, a scheme36 (hereafter in this section referred to as the scheme) to be framed by the Central Government, or if the assessee is carrying on the business of growing and manufacturing tea i .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

r is less: Provided that where such assessee is a firm, or any association of persons or any body of individuals, the deduction under this section shall not be allowed in the computation of the income of any partner, or as the case may be, any member of such firm, association of persons or body of individuals: Provided further that no such deduction shall be allowed in relation to the assessment year commencing on the 1st day of April, 1991, or any subsequent assessment year. (2) For the purpose .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

as not, at any time previous to the date of such installation by the assessee, used in India; (b) such machinery or plant is imported into India from any country outside India; and (c) no deduction on account of depreciation in respect of such machinery or plant has been allowed or is allowable under this Act in computing the total income of any person for any period prior to the date of the installation of the machinery or plant by the assessee; (iv) Tea Board means the Tea Board established un .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t of depreciation; (ii) the amount of income-tax paid or payable, and provision therefor; (iii) the amount of surtax paid or payable under the Companies (Profits) Surtax Act, 1964 (7 of 1964); (iv) the amounts carried to any reserves, by whatever name called; (v) the amount or amounts set aside to provisions made for meeting liabilities, other than ascertained liabilities; (vi) the amount by way of provision for losses of subsidiary companies; and (vii) the amount or amounts of dividends paid or .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

g computers); (c) any road transport vehicles; (d) any machinery or plant, the whole of the actual cost of which is allowed as a deduction (whether by way of depreciation or otherwise) in computing the income chargeable under the head Profits and gains of business or profession of any one previous year; (e) any new machinery or plant to be installed in an industrial undertaking, other than a small-scale industrial undertaking, as defined in section 80HHA, for the purposes of business of construc .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

such audit in the prescribed form51 duly signed and verified by such accountant : Provided that in a case where the assessee is required by or under any other law to get his accounts audited, it shall be sufficient compliance with the provisions of this subsection if such assessee gets the accounts of such business or profession audited under such law and furnishes the report of the audit as required under such other law and a further report in the form prescribed under this sub-section. 15 The .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version