Tax on Deposits + S. 80HH/ 80-I separate unit accounts + s. 234A to 234C interest
Sundaram Finance Ltd vs. ACIT (Supreme Court)
"Contingent deposits" received from customers is "income"
It
is now well settled that in determining whether a receipt is liable to
be taxed, the taxing authorities cannot ignore the legal character of
the transaction which is the source of the receipt. The taxing
authorities are bound to determine the true legal character of the
transaction. "Contingent deposits" received from leasing/hire purchase
customers with a view to protect from potential sales tax liability,
which is credited to turnover, is assessable to income-tax (Bazpur
Co-operative Sugar Factory (1988) 3 SCC 533 distinguished).
CIT vs. Bongaigaon Refinery and Petrochemical Ltd (Supreme Court)
S. 80HH & 80-I do not require maintenance of seperate books
S.
80HH & 80-I do not require maintenance of accounts unit wise and
deduction can be claimed on the basis of consolidated accounts. To avoid
litigation, the assessee should get the working of unit wise net
profits certified by the Chartered Accountant.
Note: This impliedly
approves Indian Aluminum 88 ITR 257 (Cal) & Mahindra Sintered 177
ITR 111 (Bom). Contrast with Arisudana Spinning Mills Ltd (SC)
Karanvir Singh Gossal vs. CIT (Supreme Court)
S. 234A to 234C is mandatory & can be levied even if assessment order is silent
As
held in Anjum M.H. Ghaswala 252 ITR 1 (SC), interest u/s 234A to 234C
is mandatory and interest under Section 234B/234C is mandatory in nature
and there is no need for the AO to specifically recite in the
assessment order that the said interest shall be levied. The Tribunal
should consider whether the assessee is eligible for waiver of interest
as per Notification No.F.No.400/234/95-IT(B), dated May 23, 1996
Note:
This impliedly reverses CIT vs. Awadh Hotels (P) Ltd (All) &
Dehradun Club(Utt) where it was held that despite Anjum Ghaswala, a
specific direction in the assmt order is necessary. Also, the Tribunal
was asked to consider waiver even though under the Notification, the
CCIT/DGIT has the power to waive & not the Tribunal.