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of <h1>High Court directs Assessing Officer to compute expenditure based on son's case method, restrict income by telescoping credits, and affirm individual share income assessment over HUF.</h1> <h3>Thiru S. Dhanapal (Smaller HUF), Thiru S. Dhanapal (Bigger HUF) (specified), Arni Versus The Assistant Commissioner of Income Tax</h3> Thiru S. Dhanapal (Smaller HUF), Thiru S. Dhanapal (Bigger HUF) (specified), Arni Versus The Assistant Commissioner of Income Tax - [2019] 410 ITR 230 ... Issues:- Interpretation of Income Tax Act, 1961 regarding expenditure allowance for bus operation and share income assessment.- Telescoping of credits in capital account for arriving at net income.- Assessment of share income from business in HUF vs. individual hands.Interpretation of Income Tax Act:The appeals involved a dispute regarding the interpretation of the Income Tax Act, 1961, specifically related to the allowance of expenditure for bus operation and the assessment of share income. The Tribunal's order was challenged by the appellants, arguing that the Tribunal failed to consider its earlier decision in a similar case involving the appellant's son. The main contention was that the Tribunal should have adopted the same method used in the son's case for computing expenses per bus per month. The High Court agreed with the appellants, directing the Assessing Officer to compute the expenditure based on the method used in the son's case.Telescoping of Credits in Capital Account:Another issue raised was whether the credits in the capital account offered as business income should be telescoped to arrive at the net income, thereby avoiding double addition under the head 'business.' The High Court referred to a previous decision involving the appellant's son, where the Tribunal allowed telescoping of credits to the extent of income added in the business account. The Court found this approach reasonable and directed the Assessing Officer to restrict the income to the extent it could not be telescoped with the addition made on account of income from business.Assessment of Share Income:The final issue concerned the assessment of share income from the transport business and a provisions store in the name of Dhanapal Maligai in the context of Hindu Undivided Family (HUF) vs. individual assessment. The Assessing Officer had held that the income should be assessed in the hands of the individual rather than the HUF. The High Court reviewed the findings and upheld the assessment, stating that the share income from the transport business and provisions store should be assessed in the hands of the individual, not the HUF. Consequently, the Court decided against the appellants on this issue.In conclusion, the High Court partially allowed the tax case appeals, directing the Assessing Officer to compute expenditure based on the son's case method, restrict income by telescoping credits, and affirming the assessment of share income in individual hands.
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