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2015 (6) TMI 850 - AT - Income Tax


Issues:
1. Disallowance of sales-tax deferment amounting to Rs. 42,21,000.
2. Verification of the quantum of the claim by the Commissioner.
3. Application filed by the Revenue Department for rectifying the error.
4. Deletion of disallowance by the CIT(A) based on Karnataka Government's deferment scheme.
5. Interpretation of Circular No.496 regarding sales-tax deferment schemes.
6. Justification of the deletion of the addition by the CIT(A) and the Tribunal.

Issue 1: Disallowance of sales-tax deferment amounting to Rs. 42,21,000:
The Revenue Department disallowed the sales-tax deferment amount as the assessee failed to provide evidence of converting the liability into a loan. The CIT(A) deleted the addition, citing the benefit given by the Karnataka Government. The Tribunal upheld the decision, stating that the certificate issued by the Commercial Taxes department fulfilled the conditions of Section 43B of the Act, thus allowing deferment of payment and preventing the addition.

Issue 2: Verification of the quantum of the claim by the Commissioner:
The Commissioner was expected to verify the quantum of the claim, as the order was silent on this issue. The Misc. Application was filed by the Revenue Department to rectify this alleged error made by the Tribunal.

Issue 3: Application filed by the Revenue Department for rectifying the error:
The Revenue Department filed a Misc. Application to rectify the alleged error made by the Tribunal in allowing the deletion of the disallowance of the sales-tax deferment amount.

Issue 4: Deletion of disallowance by the CIT(A) based on Karnataka Government's deferment scheme:
The CIT(A) deleted the disallowance based on the Karnataka Government's deferment scheme, stating that the appellant had fulfilled the conditions for deferment, and Form No.D was not applicable to the unit in Karnataka.

Issue 5: Interpretation of Circular No.496 regarding sales-tax deferment schemes:
Circular No.496 highlighted that if State Governments amended Sales Tax Acts to treat deferred sales tax as paid, it would meet the requirements of Section 43B. The Tribunal referenced this circular to justify the deletion of the addition based on the Karnataka Government's deferment scheme.

Issue 6: Justification of the deletion of the addition by the CIT(A) and the Tribunal:
The Tribunal upheld the CIT(A)'s decision to delete the addition, emphasizing that the assessee had fulfilled all conditions for deferment as per the Karnataka Government's scheme. The Tribunal dismissed the Revenue Department's Misc. Application, concluding that the legal aspects and factual position had been adequately addressed and decided upon.

This detailed analysis of the judgment addresses the various issues involved, including the disallowance of sales-tax deferment, verification of claims, the Revenue Department's application for rectification, the Karnataka Government's deferment scheme, interpretation of Circular No.496, and the justification for deleting the addition by the CIT(A) and the Tribunal.

 

 

 

 

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