9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2011 (2) TMI 159 - HC - Income TaxCarry forward and set off of loss - Disallowance - Refund - Held that - though the Assessing Officer had rejected the prayer for extension the assessee had justification for delay on account of audit being incomplete. The Tribunal having exercised its discretion in extending the time beyond the date on which the return was filed Section 80 could not be invoked. - carry forward of loss permissible Payment of duty under KVSS - held that Tribunal has set aside the addition towards refund in view of the fact that the assessee had offered the amount for taxation under KVSS which had been accepted by the department in subsequent assessing year. In view of this undisputed fact the question whether the dispute raised by the assessee was still pending in Hon ble Supreme Court could not be a ground to tax the amount again. Claim of refund - claim of the assessee for refund was based on judgment of the Hon ble Supreme Court in some other case - The credit entry in the profit and loss account was made on hypothetical basis. This being the factual finding which is not shown to be erroneous the deletion by the Tribunal is not liable to be interfered with.
Issues:
- Appeal under section 260A of the Income Tax Act, 1961 against the order of Income Tax Appellate Tribunal. - Carry forward of loss, deduction on account of net refund, excise duty refund, car expenses disallowed, foreign travel expenses disallowed. - Assessing Officer's disallowances and additions. - Tribunal's rulings on various issues. - Legal arguments and judgments cited by both parties. Issue 1: Carry forward of loss The assessee filed its income tax return beyond the extended time allowed by the Assessing Officer. The AO disallowed carry forward and set off of loss against subsequent years' income under Section 80 of the Act. The Tribunal allowed the carry forward of loss, considering the reasonable cause for the delay due to incomplete audit. The Tribunal's decision was supported by the fact that the return was filed within the extended time, distinguishing it from cases where returns were filed beyond the prescribed date without extension. Issue 2: Deduction on account of net refund The assessee credited a refund of higher central excise duty to its profit and loss account, which was challenged by the Excise Department. The CEGAT reversed the Collector's order, leading to a dispute on the refund. The Tribunal ruled in favor of the assessee, stating that the refund was not legally claimable, and the provisions of section 41(1) of the Act did not apply. The Tribunal highlighted that taxing hypothetical income was unjust, especially when the amount had already been offered for taxation under KVSS in a subsequent year. Issue 3: Excise duty refund credited to P&L Account The Tribunal held that the refund credited to the profit and loss account on a hypothetical basis did not constitute income. The Tribunal emphasized that the real income, not hypothetical income, should be subject to taxation. Citing legal precedents, the Tribunal dismissed the revenue's appeal against the deletion of this addition by the CIT(A). Issue 4: Disallowance of car expenses The Tribunal overturned the disallowance of motor car expenses attributed to personal use of the Director, noting that such disallowance was not applicable to a company. Citing a relevant decision, the Tribunal deleted the disallowance sustained by the CIT(A). Issue 5: Foreign travel expenses disallowed The Tribunal held that foreign traveling expenses incurred for exploring technical collaboration did not constitute capital expenditure but rather revenue expenditure. The Tribunal's decision was supported by legal precedents distinguishing between capital and revenue expenditures. Consequently, the Tribunal dismissed the revenue's appeal against the deletion of this addition by the CIT(A). Conclusion The Tribunal's rulings favored the assessee on various issues, including the carry forward of loss, deduction on net refund, treatment of excise duty refund, disallowance of car expenses, and foreign travel expenses disallowed. The Tribunal's decisions were backed by legal reasoning and precedents, ultimately leading to the dismissal of the revenue's appeal.
|
