The main claim in the present year is a sum of Rs. 14,50,123 which represents interest expenses on the loans used for construction of the building and which according to assessee deserves to be allowed under section 24(b) of the Income-tax Act, 1961 against the rental income.
Employees’ contribution towards PF paid by the assessee before the due date of filing of return u/s 139(1) of the Act for the assessment year under consideration is admissible.
In determining whether there has been diversion of income by overriding title, it is the nature of the obligation which is the decisive fact. There is a difference between an amount which a person is obliged to apply out of this income and an amount which by the nature of the obligation cannot be said to be a part of the income of the assessee.
Ld.Counsel for the assessee Mr.Sandeep Sadra on the other hand pointed out that the assessee has made a fresh claim before the Commissioner of Income Tax (Appeals) and as all the facts are on record and as the Assessing Officer has himself recorded that the claim is correct, the Commissioner of Income Tax (Appeals) was right in allowing the claim.
In ‘Hero Honda Finlease Ltd.’ (supra), the assessee had claimed higher depreciation @ 40% during the assessment proceedings, as against @ 20% in the tax audit report. The Tribunal held that the claim of higher depreciation in the assessment proceedings could not be termed as a new claim and that Goetze (India) Ltd. (supra) was only in respect of a new claim made in the assessment proceedings and not modification of claim.
It is an accepted position of law that the re-valuation of assets in the books of the assessee does not lead to generation of income as no transaction has been taken up with an outside party. In other words, a person cannot make profit from himself by merely making some entries in the books of account.
The question is as to whether interest under section 234B and 234C of the Act can be charged for default in payment of advance tax and for deferment of advance tax, respectively, where the payment of tax became due only because of the amendment by way of insertion of Explanation 1(h) to s. 115JB (2) of the Act, the amendment having been made operative retrospectively. It was due to the filing of the revised statement of assessable income,
Assessee entered into a collaboration agreement with ‘D’ for purchase of land on its behalf and development thereof by ‘D’. ‘D’ purchased land from farmers on behalf of the assessee through its agent ‘J’. In lieu of the consideration paid by ‘D’ for purchase of land, its account was credited by way of journal entries. ‘J’ had made payments in cash to the farmers in order to effect purchases.
ombay High Court in the case of CIT vs. Reliance Utility and Power Ltd. 178 Taxman 135 Bombay held that in such situations the presumption would be that interest free funds were used for the purpose of giving interest free advances.
Now coming to the issue in question about the head of taxability, the provisions of Section 28(va) have been narrated above. Except from raising general argument about colourable device, lower authorities have not disputed the arguments of the assessee about applicability of Section 28(va),
