TaxTMI 
TaxTMI 
1992 (8) TMI 45
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....ng that the rebate of central excise duty amounting to Rs. 22,85,565 and remission of cane purchase tax of Rs. 2,71,923 allowed to the assessee by the U. P. Government were taxable in the assessee's hands? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was legally justified in holding that the assessee had no right to agitate against the levy of interest under sections .139 and 217 in the course of an appeal against the assessment order on other grounds as well ? 3. Whether, on the facts and in the circumstances of the case, the Tribunal is justified in holding that interest to the extent of Rs. 40,000 was not laid out wholly and exclusively for the purpose of the assessee's business ? " We take up thes....
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....ing in the case. The view taken by the Tribunal is that a gift can be made only without consideration, but remission in this case had been made to the assessee on account of the declared policy of the Government of India, that rebate of central excise duty would be available on excess production of sugar and remission of the tax payable by the sugar factories under the U. P. Sugarcane ( Purchase Tax) Act would be available to those whose purchases of sugarcane exceed a prescribed limit. The Tribunal held that payment of remission was directly linked with the excess production of sugar and with the excess purchases of sugarcane and if they were not there, then such remission would not have been given to the assessee. It was held that remissi....
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.... consideration, the Tribunal concluded that they would be deemed to be the income of the instant previous year in the hands of the assessee and that they were rightly taxed. All the ingredients of section 41(1) of the Act are present in this case, inasmuch as it is not disputed that deduction had been made of such expenditure in a preceding year and that the receipt has come to the assessee's hands in the previous year relevant to the assessment year under consideration. Therefore, the Tribunal was right, that remissions in question would be deemed to be the profits of the business of the assessee in the previous year relevant to the assessment year 1974-75 and that they were liable to tax being trading receipts in the hands of the assessee....
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....s within the scope of section 41(1) and no exception can be taken to its taxability in this year. Coming to the second question, we are of the view that the Tribunal erred in holding that the assessee had no right to agitate against the levy of interest under sections 139 and 217 in the course of an appeal filed against the assessment order on other grounds as well. Admittedly, the appeal filed by the assessee was not confined to the question of interest alone. The appeal was filed by the assessee challenging the assessment on several counts. The question is whether the assessee can challenge the levy of interest in an appeal filed disputing the assessment on several grounds. This question is not res integra so far as this court is conce....