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Section 14A states that for the purpose of computing total income under Chapter IV, no deduction shall be allowed in respect of expenditure incurred in relation to the income which does not form part of the total income under this Act. It does not state that income which is entitled to deduction under Chapter VIA has to be excluded for the purpose of the said Section.
it is noticed that the assessment is an ex-parte assessment and also before the ld. CIT(A) there has been no representation. We are of the view that the assessee may be granted one more opportunity to substantiate its case before the ld. AO. It is also noticed that the ld. AR has specifically agreed that there would be no default on the part of assessee in de-novo setting aside assessment. In this situation the issue is restored to the file of AO for denovo assessment after granting the assessee adequate opportunity to substantiate its case.
In the instant case, it is found that the eligible new asset was not purchased within one year before the date on which the transfer of the original asset took place. Thus, the amount which is not utilized by the assessee for the purchase of new asset before the date of furnishing the return of income under section 139 was required to be deposited as per the provisions of sub-section (4) for availing deduction under section 54F in respect of those amounts also. In other words, as per the plain language employed in the above sub-section (4), only the amount which was actually utilized by the assessee for the purpose of purchase of the new residential house before the date of furnishing of the return of income under section 139 shall only be eligible for computation of deduction under section 54F(1).
. Given the fact that the assessee had not owned the property in her name only to the exclusion of anybody else including the husband, but in joint name with her husband, we agree with the submission of the learned senior counsel appearing for the assessee herein that unless and until there are materials to show that the assessee is the exclusive owner of the residential property, the harshness of the proviso cannot be applied to the facts herein. Apart from that, 50% ownership is with reference to the clinic situated in the ground floor. As such, the entire property is not an exclusive residential property. Hence, we are inclined to agree with the assessee’s contention that the joint ownership of the property would not stand in the way of claiming exemption under Section 54F.
Coming to the facts of the case, the assessee was afforded sufficient opportunities to furnish confirmations in respect of the impugned credits by the Assessing Officer (refer page 2 of the assessment order). A final show-cause notice was issued by him on 22/03/2006, stating the said fact, and by way of allowing a last opportunity to the assessee to substantiate its case, for 24/03/2006, and which (notice) again remained un-responded, even up to the date of passing of the assessment order, i.e., 29/03/2006 (refer page 3 of the assessment order).
Hon’ble Kerala High Court in the case of Girnar Industries (supra) and Tata Tea Limited (supra), we hold that the assessee is entitled for exemption under Section 10B of the Act on account of blending of tea. Similarly, in our view, the industrial units engaged in the very same activity i.e. blending, packing and export of tea in the free trade zone shall also be entitled to enjoy tax exemption under Section 10A of the Act.
A perusal of the reasons recorded by the AO in the present case shows that there was no rational or intelligible nexus between the reasons recorded by him and the belief entertained about the escapement of income of the assessee company. There was nothing in the said reasons to show existence of any positive income arising to the assessee company which was assessable in his hands and the belief entertained by the AO was based merely on assumption and surmises.
The assessee has not advanced any arguments with regard to the proposition that on interest income deduction under sec. 80-IC is admissible, therefore, there is no idea to examine the provisions of sec. 80-IC and in what condition the computation for such deduction has to be made. According to the judgment of Hon’ble Delhi High Court in the case of CIT vs. Sri Ram Honda, interest income has to be assessed as a income from other sources. In paragraph 26 of the judgment, Hon’ble Court has observed that interest income on fixed deposit for the purpose of availing of credit facility from the bank does not have an immediate nexus with the export business and, therefore, it has to necessarily be treated as income from other sources and not business income.
An assessment order passed by an Assessing Officer can be rectified or amended under Section 154 or Section 155 or reopened under Section 148 only by him, and by no other income-tax authority. Similarly, an assessment by way of settlement of a case, which is made by the (Income Tax Settlement Commission) ITSC, can be reopened only by the ITSC and that too only in certain circumstances. Applying this general principle that runs through the Act, an assessment by way of a settlement order passed by the ITSC cannot be reopened by a different authority, viz., the Assessing Officer.
On the issue of expenditure of 66.82 lakhs towards the issue of shares to the Employees Stock Option is concerned, the Tribunal pointed out that the shares were issued to the employees only for the interest of the business of the assessee to induce employees to work in the best interest of the assessee. The allotment of shares was done by the assessee in strict compliance of SEBI regulations, which mandate that the difference between the market prices and the price at which the option is exercised by the employees is to be debited to the Profit and Loss Account as an expenditure. The Tribunal pointed out that what had been adopted was not notional or contingent as had been submitted by the Revenue.
