9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2011 (11) TMI 742 - HC - Income TaxDisallowance u/s 43B - Held that - We find that though previously assessee had included said amount of ₹ 1.18,53,407/to be disallowed under Section 43B of the Act, even before the assessment was finalised, the assessee through its letter contended that same was purely an error and that exclusion would not apply to cash credit account since the same is not covered under Section 43B of the Act. To our mind this was a pure question of law. If under Section 43B of the Act such interest was not included, mere fact that assessee initially himself excluded in the return, would not prevent him to contend that same was erroneous and that correct treatment should be as per the statutory provisions. In that context CIT(Appeals) as well as Tribunal both were justified in entertaining such additional grounds. Had the entire issue being highly contested on facts and had such claim not being made in original assessment, could the same have been entertained by the Assessing Officer without revised return and whether consequentially higher authorities could have directed the Assessing Officer to examine the same are questions we are not required to go into.
Issues:
1. Whether depreciation on moulds should be allowed at the rate of 40% instead of 25%. 2. Whether the assessee is entitled to claim interest paid to the bank under Section 43B of the Income Tax Act. Issue 1: Depreciation on Moulds The Revenue appealed against the Tribunal's decision to allow depreciation on moulds at 40% instead of the 25% allowed by the Assessing Officer. The Revenue conceded that a similar issue was decided against them in a previous case. Hence, this question did not require further consideration. Issue 2: Claim of Interest Paid to Bank The assessee contended that interest on a cash credit account with the State Bank of India was wrongly disallowed under Section 43B of the Act. The Assessing Officer did not consider this contention, stating that the time limit for revising the return had expired. The CIT(Appeals) accepted the additional ground and directed the Assessing Officer to verify and allow the claim as per the Act. The Revenue challenged this decision before the Tribunal, arguing that the CIT(Appeals) should not have entertained the additional claim since the assessee did not revise the return. The Tribunal, citing relevant case law, upheld the order of the CIT(A) and dismissed the Revenue's appeal. The Tribunal emphasized that the CIT(A) had the authority to admit new claims, and the issue was a pure question of law. Analysis: The judgment addressed two main issues related to the depreciation rate on moulds and the claim of interest paid to the bank under Section 43B of the Income Tax Act. The first issue was resolved in favor of the assessee due to a previous decision against the Revenue. The second issue involved the CIT(Appeals) and Tribunal entertaining the additional claim of the assessee, which the Revenue contested. The Tribunal upheld the CIT(A)'s decision, emphasizing the legality of admitting new claims and considering the issue as a pure question of law. The judgment highlighted the powers of the CIT(A) and Tribunal in such matters, citing relevant case law to support their decision. Ultimately, the tax appeal was dismissed, affirming the allowance of the interest claim and supporting the decision-making process of the lower authorities in this case.
|
