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Issues Involved:
The judgment involves issues related to the inclusion of excise duty and sales tax in total turnover for the purpose of deduction under section 80HHC of the Income-tax Act, 1961, and the deletion of additions on account of unaccounted sale of scrap and inflation of expenses based on disclosures made before the Settlement Commission. Issue 1 - Excise Duty and Sales Tax in Total Turnover: The Revenue contended that excise duty and sales tax should be included in total turnover for calculating the benefit under section 80HHC. However, the Tribunal, following a precedent, held that sales tax and excise duty should not be included in total turnover for the purpose of section 80HHC. The court upheld this decision, emphasizing that section 80HHC is a self-contained provision and the general definition of turnover from other laws cannot be applied here. Issue 2 - Unaccounted Sale of Scrap and Inflation of Expenses: Regarding the additions made on account of unaccounted sale of scrap and inflated expenses, the Tribunal found that seven individuals, who were directors of the company, had disclosed these amounts before the Settlement Commission. The Tribunal concluded that since the additions were made in the hands of these individuals, there was no justification for adding them to the company's income. Therefore, the court affirmed the Tribunal's decision to delete these additions based on the disclosures made before the Settlement Commission. In conclusion, the High Court of Madras dismissed the tax case appeals, affirming the Tribunal's decisions on both issues. Consequently, related miscellaneous petitions were also dismissed.
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