Jurispruden tiol – Tomorrow ' s cases
Legal Corner Icon — the image was hosted by the publisher and was not captured.Income Tax
Deduction for leave salary payable - any liability which has accrued in relevant year of account is allowable as a deduction; Appeal by Revenue to Tribunal on same issue already decided, not maintainable: ITAT
This amount was debited to the profit loss account and credited to the provision account. The provision was in respect of leave accrued and due to the employees but not availed of by them as per company's rules. It was also explained by the assessee that whenever the amount is paid as leave salary, the payment would be debited to the provision account. The Assessing Officer disallowed the claim on the ground that there was no justification or evidence adduced by the assessee. Before the CIT (Appeals), the assessee contended that since it was following the mercantile system of accounting, the provision made in respect of an accrued liability is to be deducted in computing its profits. Accepting these submissions, the CIT (Appeals) allowed the claim placing reliance on the judgment of the Supreme Court in Bharat Earth Movers Limited vs. CIT
Central Excise
Wrongly taken credit, before being utilized, reversed voluntarily – Prima facie no cause for imposition of interest or penalty – Tribunal.
The Madras High Court in the case of R.A.Mani vs. Palanimuthu Pillai, AIR 1967 Madras 16 (V 54 C7) observed that the word “ avail ” is stated to mean that “to take advantage or utilize ”; a person can be said to have availed himself of something only if he had taken advantage or profited by that thing or utilized it to his benefit.
“A vailment ” and “ taking ” of Cenvat Credit cannot be treated as synonymous terms as held by the Tribunal in the case of Sagar Twisters [] following the Allahabad High Court's decision in Hello Minerals Water (P) Ltd. [].
In the present case, the Assistant Commissioner had dropped the proceedings for imposition of penalty and interest but the Revenue appealed & their appeal proved successful before the Commissioner(A) who confirmed the demand of interest amounting to Rs.1,67,018/- and imposed a penalty of Rs.5.00 lakhs on the applicants.
Income Tax
Sec. 45 & 48, unlike the provisions of Wealth Tax, do not make provision, providing for any deemed profit, or gain, to be taxable, as a capital gain- High Court
To charge capital gains under Sec.45 & 48, four conditions are required to be fulfilled,:
1. There should be a capital asset,
2. Capital asset should be transferred,
3. Consideration has been received in lieu of transfer, and
4. There was cost of acquisition and cost of improvement.
Until Tomorrow with more DDT
Have a nice Day.
Mail your comments to vijaywrite@taxindiaonline.com