TaxTMI 
TaxTMI 
2017 (5) TMI 5
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....ed Assessing Officer has erred in invoking the provision of section 145(3) of the I.T. Act and in rejecting the books of Accounts of the appellant and the Hon'ble CIT ( Appeals) has further erred in confirming the invocation of the provisions of 145(3) and the rejection of the books of accounts of the appellant. 2. That under the facts and circumstances of the case, the learned Assessing Officer was erred in considering the Sales-tax refund separately from the operating profit and further erred in adding the same over & above estimated income of the appellant. The Hon'ble CIT (Appeals) has further erred in confirming that the sales tax refund was taxable u/s 41 of the Income Tax Act and has no bearing on the computation of income a....
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.... to the sales tax a/c. The collection of the sales tax was made by the awarder i.e. the Irrigation Department and was deposited on our behalf with the sales tax authorities. The same was debited in the sales tax a/c. It is only the net amount which was taken to the P&L a/c of Rs. 13,87,241/-. The entire gross receipts' including Sales Tax has been considered in the P& L a/c. Thus, it is not a correct fact that the sales tax or its refund is not considered at all. 3.2 It was further submitted that section 41(1) is not applicable in the instant case. A bare reading of the provision suggests that to invoke sec. 41(1), the assessee must have been allowed any deduction in particular/specific year. However, the AO has not even whispered anythi....
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....n of income and the return of income filed for the subject assessment year. Hence, the said decision does not support the case of the assessee. Here, the question that arises for consideration what is exact nature of the sales tax refund and how the same should be treated for tax purposes and under which head of income. The sales tax is payable on the sales affected by the assessee and the same is considered as deemed business receipts and the same is eligible as a business deduction in the year of payment in terms of section 43B of the Act. Where the sales tax which was paid earlier is refunded to the assessee in a subsequent financial year, it will therefore form part of the business receipts which is assessable under the head "profit and....
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....ch were necessarily required to be furnished to the various awarders/ government departments. As per their requirement, the appellant was bound to furnish performance security/guarantee. In absence, the assessee could not have begged contracts therefore, the interest income should be treated as income from business. The ld. CIT (A) however rejected the assessee's contention and treated interest receipt of 52,09,524/- as income from other sources". Hence this ground. 5.2. The ld. Counsel for the assessee has submitted that the Government Department who awarded the various subjected contracts, as a matter of standard practice requirement the contractor to furnish them the bank guarantee as security. The contractor-assessee, in turn had to ....
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.... acquisition of fixed assets of Rs. 5.97 Cr. As per Audited Balance Sheet. (PB 17). The FDR's so pledged came out of the secured and unsecured loans of Rs. 7.3 Cr. and Rs. 1.02 Cr. respectively. 5.4. Further, the assessee has relied on decision of M/s Maya Construction in ITA No. 510/JU/2013 dated 18.07.2014 and in ITA No. 442/JU/2014 dated 23.12.2015. Further, the assessee has relied on Hon'ble Delhi High Court in case of CIT Vs. Jaypee DSC Ventures Ltd (2011) 53 DTR 305 (Del) and CIT vs. K & Co. 88 DTR 166 (Del). 5.5 It was further submitted even in the past, the Department has been assessing such income as business income and there is no justification for the departure which has been made this year. 5.6 We have heard the rival c....