The power vested in the Commissioner to grant or not to grant approval is coupled with a duty. The Commissioner is required to apply his mind to the proposal put up to him for approval in the light of the material relied upon by the Assessing Officer.
In this case reasons recorded for reopening indicate is that cash deposits aggregating to Rs 10,24,100 have been made in the bank account of the assessee, but the mere fact that these deposits have been made in a bank account does not indicate that these deposits constitute an income which has escaped assessment.
In exercising legislative power, the legislature by mere declaration, without anything more, cannot directly overrule, revise or override a judicial decision. It can render judicial decision ineffective by enacting valid law on the topic within its legislative field fundamentally altering or changing its character retrospectively.
Calcutta High Court held In the case of CIT vs. M/s Britannia Industries Ltd. that bank charges claimed by the assessee are not relatable to the fixed assets. Bank charges are payable in consideration of the risk undertaken by the bank.
The Second issue relates to additional depreciation of Rs. 4,98,859/-. Assessing officer has disallowed the balance additional depreciation claimed by assessee on the machinery installed in the second half of the previous year relevant to the A.Y. 2007-08.
There is no restriction on allowing balance of one time incentive in the subsequent year if the provisions are constructed reasonably, liberally and purposive. One has to notice that additional benefit was intended to give impetus to industrialisation and in that direction the assessee deserves to get the benefit in full when there is no restriction in the statute to deny the benefit of balance 50% when the new plant and machinery was acquired and put to use for less than 180 days in the immediately preceding year.
Punjab & Haryana High Court held In the case of CIT vs. M/s Freedom Board & Paper Mills that it is not open to the AO to refer the case to DVO without rejecting books of accounts on the basis of rejection of the books of account on some legal or justified basis.
In the case of The Commissioner of Income Tax vs. M/s. Salgaonkar Mining Industries Pvt. Ltd High Court of Goa has held that provision for doubtful debt is not required to add back while arriving book profit u/s 115JA.
Himachal Pradesh High Court in the case of CIT vs. M/s Shree Triveni Foods held that the claim of depreciation for assessment years under dispute was not mandatory and therefore, the assessee could not be compelled to exercise the option as an obligation.
In the case of V. M. Salgaocar & Brother Pvt. Ltd vs. The Asst. Commissioner of Income Tax, Goa High Court has held that deduction u/s 80HHC is to be allowed to the extent of gross total income and not to the extent of business profit only.
