×Latest Case Laws on Income Tax by Supreme Court of India
These are the latest case laws decided by Supreme Court of India on Income Tax which have been published recently. The case laws are open for discussion and we invite expert comments from our members on its applicability and effect on relevant issues.
These six appeals by the assessee are directed against the order of Commissioner of Income Tax (Appeals)-11, Pune dated 30-01-2015 common for the assessment years 2005-06 to 2009-10 and 2011-12.
The Revenue has filed cross appeals against the aforesaid order of Commissioner of Income Tax (Appeals) for the assessment years 2005-06, 2008-09 and 2011-12. Since, the issues raised in all these appeals are common, these appeals are taken up together for adjudication and are disposed of vide this single order.
2. The facts common for all these appeals are : The assessee company is a joint venture between Plastro, Plasson Israel and Finolex Group India. The assessee is engaged in the business of design, manufacture, supply and installation of drip irrigation system and components thereof. A search and seizure action u/s. 132 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) was carried out in the case of Finolex Group on 18-11-2010. Subsequently, notices u/s. 153A were issued to the assessee on 06-07-2011 for the assessment years 2005-06 to 2010-11. The assessments were framed for the assessment years 2005-06 to 2010- 11 u/s. 143(3) r.w.s. 153A of the Act and for assessment year 2011-12 the assessment order was passed u/s. 143(3) of the Act. Various additions were made during assessment proceedings. Aggrieved by assessment orders for the respective assessment years, the assessee filed appeals before the Commissioner of Income Tax (Appeals). The Commissioner of Income Tax (Appeals) granted part relief to the assessee and confirmed the additions/disallowances in respect of charging of interest u/s. 234C, Disallowance of bad debts written off, Disallowance of prior period expenses and Valuation of closing stock, etc. Against the findings of Commissioner of Income Tax (Appeals), the assessee is in appeal before the Tribunal.
The additions which are subject matter of dispute in the impugned assessment years before the Tribunal are as under : The Department in appeals has assailed the order of Commissioner of Income Tax (Appeals) on solitary issue of allowing „Bad Debts Written off‟ below Rs.1,00,000/- in assessment years 2005-06 (Rs.18,33,117/-), 2008-09 (Rs.7,96,767/-) and 2011-12 (Rs.1,22,97,502/-).
3. The issue wise findings on the grounds raised in the appeals for the impugned assessment years are as under : Charging of Interest u/s. 234C of the Act.
4. Shri Jayant G. Pendse appearing on behalf of the assessee submitted that the authorities below have erred in charging interest u/s. 234C on income assessed in proceedings u/s. 153A r.w.s. 143(3). The provisions of section 234C clearly indicate that the interest has to be charged on returned income, whether the return of income is filed u/s. 139 or in response to notice u/s. 153A of the Act. The ld. AR pointed that the legal provision was explained before the Commissioner of Income Tax (Appeals), however, the Commissioner of Income Tax (Appeals) mechanically upheld the findings of Assessing Officer without appreciating the legal provisions with respect to charging of interest u/s. 234C of the Act. To support his submissions the ld. AR placed reliance on the decision of Mumbai Bench of the Tribunal in the case of Morgan Stanley Investment Management (P) Ltd. Vs. Deputy Commissioner of Income Tax reported as 160 DTR 19.
5. On the other hand Shri Ajay Modi representing the Department vehemently supported the findings of Commissioner of Income Tax (Appeals) and prayed for rejecting the ground raised by the assessee in respect of charging of interest u/s. 234C of the Act.
6. We have heard the submissions made by representatives of rival sides and have perused the orders of authorities below. The contention of the assessee is that the assessee has already paid advanced tax as per Income Tax return under the provisions of section 139 of the Act. No tax amount is outstanding in respect of income returned. Interest u/s. 234C is to be charged if the assessee has failed to pay advanced tax as per returned income. The authorities below have charged interest u/s. 234C in respect of income assessed.