In our considered opinion, exemption under Section 10(23C)(vi) of the Act can be claimed by an assessee without applying for registration under Section 12A of the Act as it is not required to fulfil the conditions mentioned under Section 11 of the Act while claiming exemption under Section 10(23C) (vi) of the Act.
Undoubtedly an order of assessment which has been passed for a subsequent assessment year may furnish a foundation to reopen an assessment for an earlier assessment year. However, there must be some new facts which come to light in the course of assessment for the subsequent assessment year which emerge in the order of assessment.
The Court took into consideration the definition of ‘interest’ under section 2(28A) of the Act and also analysed the contents of two circulars issued by the CBDT, being No. 65 dated 02.09.1971 and the subsequent one dated 22.03.1993 (Circular No. 647)(sic), and confirmed the reasoning of the Tribunal that discounting charges did not amount to interest and was not subject to tax.
Even though the parameter for considering the expenditure and income is not the same, yet the principle to be followed is that when the instrument concerned is certain as to its period of life and specifically points out to a particular interest amount to be paid on the maturity date, the question of assessing the entire interest in the first year itself does not arise.
If the assessee satisfies the assessing authority that the expenditure is not in violation of the regulations framed by the medical council then it may legitimately claim a deduction, but it is for the assessee to satisfy the assessing officer that the expense is not in violation of the Medical Council Regulations referred to above.
An assessee’s duty to establish that the amounts which the AO proposes to add back, under Section 68 are properly sourced, does not cease by merely furnishing the names, addresses and PAN particulars, or relying on entries in a Registrar of Companies website.
In the present case, the main business of the petitioner is manufacture and sale of pharmaceutical products and the vehicles are used by it in the course of business (as written by Respondent No.-2 in the impugned order (Annexure A-1)). This may lead to the inference that proceeds from the sales of such vehicles should have been included in the turnover and must be taxed accordingly.
In the facts of the present case also, it may be that if the Assessing Officer had made some efforts and examined the record of the previous assessment year, he may have come to know that this was a search and could have taken consequent action thereon. However, that by itself would not absolve the petitioner from the duty to disclose all primary facts before the Assessing Officer.
Tribunal in the penalty proceedings has by its order, independent of the findings in quantum proceedings, has reached a conclusion that various incriminating documents found during search established that the appellant’s were manipulating its accounts so as to reduce its profits. Consequently, penalty under section 271(1)(c) is imposable and has been rightly imposed by the authorities under the Act.
It is seen from the facts that the assessee does not claim its expenditure as replacement of whole machinery or repairing of machinery as such. The assessee contended that such expenditure incurred in replacing the rolls has not in any manner increased the production capacity. On the other hand, it maintained the production capacity, as such, the rolls used removed the friction between the two machines in its process.
