2012 (5) TMI 320 - HC - Income Tax

Assessing Authority Must Consider Relevant Cases for Investment Allowance Entitlement

Commissioner of Income-Tax-II, Kanpur Versus M/s Deep Awadh Hotels (P.) Ltd., Kanpur

Commissioner of Income-Tax-II, Kanpur Versus M/s Deep Awadh Hotels (P.) Ltd., Kanpur - [2013] 350 ITR 185 (Allahbaad) Issues:1. Whether the assessee is entitled to investment allowance under section 32A of the Income Tax ActRs.2. Whether the machinery installed in a hotel is entitled to investment allowanceRs.3. Whether interest under section 234B of the Income Tax Act is mandatory for default in payment of advance taxRs.Analysis:1. The High Court noted that the Tribunal remanded the matter to be decided in accordance with the law. The Court emphasized that the assessing authority should consider all relevant cases cited before him, including the Supreme Court's decision on investment allowance. The Court highlighted that the assessing officer should not ignore any other view taken by the Supreme Court or any larger bench decision covering the issue. The appeal against the remand order was deemed not ordinarily maintainable unless it decides any question or raises any substantial question of law.2. Regarding the entitlement to investment allowance for machinery installed in a hotel, the Court referred to a Supreme Court case and emphasized that the assessing officer must consider all relevant cases cited before him. The Court noted the submission that interest under Section 234B cannot be charged unless it is included in the assessment order or related sheets. The Court discussed various judgments highlighting the mandatory nature of charging interest under specific sections of the Income Tax Act. The Court concluded that the charging of interest after the amendment of the statute is mandatory, and the liability falls automatically on the assessee in case of default.3. The Court discussed the mandatory nature of charging interest under specific sections of the Income Tax Act and cited various judgments to support this position. The Court emphasized that the assessing officer should make it clear in the assessment order that interest is being charged, and the mention of the law under which such interest is charged is essential. The Court rejected the argument that interest could be charged in the demand notice without being specified in the assessment order or computation sheets. The Court ruled in favor of the assessee on the issue of interest under section 234B, stating that the third question is decided against the department and in favor of the assessee. Consequently, both income tax appeals were dismissed.