TaxTMI 
TaxTMI 
2006 (12) TMI 194
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....--------------------------- 1. Paid to sales-tax authorities against penalty 100 imposed by them under s. 36(4A) --------------------------------------------------------- 2. Paid to Consumer Forum against the notice 3,050 issued by Kakinada Consumer Redressal Forum --------------------------------------------------------- 3. Paid to Dy. Inspector of Registration & Dy. 21,810 Controller of Stamps for non-compliance of stamping to be done in H.P Agreement with hirers --------------------------------------------------------- Total 24,960 --------------------------------------------------------- 5. Shri K.R. Kamdar the learned Authorised Representative did not press the ground so far as it related to the items Nos. 1 and 2 above and therefore, the disallowance. 6. The item No. 3 represents penalty levied under the Stamp Act. The assessee was found to have made a short payment of Rs. 3,84,150 in relation to as many as 4,362 hire purchase instruments and therefore the Dy. Inspector General of Registration Bombay, vide his order dt. 22nd Dec., 1994 levied a minimum penalty of Rs. 5 for each such document aggregating to Rs. 21,810. It was contended by the learned Autho....
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....been made by the assessee before the due date of filing of return prescribed in his case. (iii) in case of employees contribution, the deduction is to be allowed if the payment is made within the grace period of the due date as specified in s. 36(1)(va). 9. We respectfully follow the precedent and remit this matter back to the file of the AO for being examined in the light of the decision of the Tribunal. He will pass a fresh order on this point after giving adequate opportunity of being heard to the assessee. The ground No. 4 is decided accordingly. Ground Nos. 5 and 10: "5.1 On the facts and in the circumstances of the case and in law, the CIT(A) erred in upholding the action of the Dy. CIT and treating the entire amount of Rs. 2,55,07,817 incurred in connection with the public issue of shares as capital expenditure. 5.2 The CIT(A) further erred in holding that interest earned on share application money, amounting to Rs. 1,67,70,691 ought not to be reduced from the expenditure incurred on public issue of shares while computing the disallowance in respect of public issue expenses. 5.3 Without prejudice to the above grounds of appeal and in the alternative, the CIT(A) erred i....
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....ery and courier charges 16,29,535 ------------------------------------------------------------ 7. Stamp duty 6,02,721 ------------------------------------------------------------ 8. Expenses 13,04,049 ------------------------------------------------------------ 9. Other Expenses 9,19,338 ------------------------------------------------------------ Total 2,55,07,817 ------------------------------------------------------------ 11. During the assessment proceeding before the AO, the assessee made an alternative plea saying that the disallowance be restricted to Rs. 87,37,126 (Rs. 2,55,07,817-Rs. 1,67,70,691). The AO relying on the decision of the Supreme Court in the case of Brooke Bond India Ltd vs. CIT (1997) 140 CTR (SC) 598 : (1997) 225 ITR 798 (SC), treated the expenditure of Rs. 2,55,07,817 as capital expenditure. He also rejected the alternative plea, relying on the decision of the Supreme Court in the case of Tuticorin Alkali Chemicals & Fertilizers Ltd. vs. CIT (1997) 141 CTR (SC) 387. 12. We find that the issue, raised through ground No. 5.1, whether the expenses aggregating to Rs. 2,55,07,817 have to be treated as expenses of revenue nature or of capital nature,....
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.... permit set-off of a capital expenditure against a revenue receipt. The total income of an assessee is chargeable to tax under s. 4 and the total income has to be computed in accordance with the provisions of the Act. Sec. 14 of the Act lays down that for the purpose of computation, income of an assessee has to be classified under five heads: (i) Salaries (ii) Income from house property (iii) Profits and gains of business or profession (iv) Capital gains (v) Income from other sources 14.2 The computation of income under each of the five heads of income has to be made independently and separately. There are specific rules of deduction and allowances under each head. No deduction, adjustment or set off of any income or expenditure, one against another, can be made except as provided by the Act. 14.3 The Supreme Court in the case of Tuticorin Alkali Chemicals & Fertilizers Ltd. vs. CIT (1997) 141 CTR 387 (SC), (1997) 227 ITR 172 (SC) after taking into consideration the provisions of the IT Act 1961. the interpretation of the term 'income' given in a large number of decisions of the High Courts, the Privy council and of the apex Court observed that income attracts tax as soon as....
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....rom those in the case of Bokaro Steel Ltd. Therefore for the reasons discussed in the above paras the ground No. 5.2 is rejected. 15. The grounds Nos. 5.3 and 5.4 raise yet another alternative plea saying that the expenditure be considered for deduction under s. 35D. The CIT(A) has mentioned this ground in para 24 of his order, but while dismissing this ground in para 25 of his order he did not give any reason. The order of CIT(A), on this point, is not a speaking order. 16. In ground No. 10 the assessee has raised yet another alternative plea challenging the AO's action of taxing the interest receipts of Rs. 1,67,70,691 under the head 'Income from other sources'. The CIT(A) has noted in para 49 of his order that no arguments were placed before him in relation to this ground and, hence, he dismissed the ground. 17. For the reasons discussed in paras 15 and 16 above, we consider it appropriate, in the interest of justice, to remit this matter back to the file of the CIT(A) for a fresh examination of the issues raised through ground Nos. 5.3, 5.4, and 10. The CIT(A) will pass a fresh speaking order after giving adequate opportunity of being heard to the assessee and the AO. The gr....