1. M/s MEPCO INDUSTRIES LTD Vs COMMISSIONER OF INCOME TAX & ANR

It is settled law that under Section 154 of the Act, rectification cannot be permissible on debatable issue. The nature of the subsidies is very critical to decide whether an income is revenue receipt or not. There is no straight-jacket principle of distinguishing a capital receipt from a revenue receipt. It depends upon the circumstances of each case. In Sahney Steel and Press Works Limited & Ors, the Supreme Court has observed that the production incentive scheme is different from the Scheme giving subsidy for setting up industries in backward areas. In the circumstances, the present case is an example of change of opinion which is not permissible. Revenue has clearly erred in invoking Section 154 of the Act. Rectifiable Mistake: It must be a patent mistake, which is obvious and whose discovery is not dependant on elaborate arguments. Decision on debatable point of law cannot be treated as "mistake apparent from the record".

(Click here for judgment)

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2. CIT, Hisar Vs Smt Shakuntala Dev- P&H High Court- Section 147, 143(2)

Income tax - Sec 147, 143(2) - AO invokes powers u/s 147 during pendency of assessment - CIT(A) and Tribunal hold that when the assessment was not done, the AO should have issued Sec 143(2) notice rather than Sec 148 notice during the pendency and hold the notice invalid - held, the lower appellate authorities have overlooked the amendment carried out in Sec 147 by way of Explanation 2(b) which imposes no bar on Revenue to initiate proceedings u/s 143(2) even if Sec 147 proceedings are not valid in this case.

(Click here for judgment)

  

3. CIT Vs Annamalai Finance Ltd.- Madras High Court

In this case following issues are decided:

(i) Whether on the facts and in the circumstances of the case, the Tribunal was right in law in holding that overdue charges on accrual basis not accounted the books of account is not to be brought to tax?

(ii) Whether on the facts and circumstances of the case, the Tribunal was right in holding that the additional financial charges (overdue charges) are not to be added as income of the assessee?"

(Click here for judgment)

   

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"Voice of CA"

CA. Kapil Goel, Moderator-Direct Taxes, Mob:9910272806, cakapilgoel@gmail.com

CA. Sidharth Jain, Co-Moderator, Mob: 9810418700, sidhjasso@yahoo.com

CA. Mukesh K Bansal, Co-Moderator-FEMA, mkak@rediffmail.com