| Tuesday, March 22, 2011 |
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1. M/S PINE PACKAGING PVT LTD Vs. INCOME TAX OFFICER, ITA NO.4084 (DEL) OF 2010, DATE OF DECISION : JANUARY 14, 2011 ITAT (DELHI) The contention of the assessee is that standing charges received are in the nature of first degree income and, therefore, in view of decision of Supreme Court in the case of Liberty India the assessee is eligible for deduction under section 80-IC of the Act. There is no dispute that the assessee is eligible for deduction under section 80-IC. The only dispute is whether the standing charges have been derived from any business referred to in sub section (2) of section 80-IC; in the case of assessee, the standing charges have been received as idle charges including return on capital. They represent the reimbursement of certain expenses which cannot be treated as derived from the manufacturing of or production of a article or thing. Therefore, the standing charges which are received by the assessee for compensation on account of idle charges cannot be treated as income derived from industrial undertaking from manufacture or production of a article or thing on simple reason that they are reimbursement of expenses, which the assessee has to incur being a captive unit of HLL and could not manufacture the products for others. (Please click here for judgment)
2. DEPUTY COMMISSIONER OF INCOME TAX CIRCLE-11(1), NEW DELHI Vs M/s ENERGY INFRASTRUCTURE INDIA LTD, ITA Nos.2337 & 4337/Del/2010, Dated: January 7, 2011 ITAT (DELHI) The interest received by the assessee on other deposits, which are not connected to the setting up of LPG Project Terminal, has been offered to tax as income from other sources. The interest of Rs 33,10,000/- was earned on the fixed deposit, which was kept in lien for obtaining bank guarantee furnished to Gujarat Maritime Board and Gail India Ltd. in connection with the setting up of LPG Project Terminal at Okha, Gujarat. Therefore, on the facts and circumstances of the case, the decisions of Supreme Court in the cases of CIT vs. Karnataka Power Corporation, CIT vs. Bokaro Steel Ltd. and CIT vs. Bongaigaon Refinery and Petrochemicals Ltd. are applicable to the present case; in the case of Bokaro Steel Ltd. it was a case of Government company which during the period of construction of the plant, had advanced the moneys to the contractors on which it was earning interest, received rent from quarters let out to employees, received hire charges on plant let out to contractors and received royalty on stones removed from the assessee’s lands. The Supreme Court considered all these activities to be instricably connected with the construction activity and accordingly held that interest received, rent received, hire charges and royalty, etc. would be reduced from the cost of the assets and it would not be treated as income. (Please click here for judgment)
3. [Contribution by CA. Amarpal and contributor is available at email-id : amar.p.ca1@gmail.com ] The brief of "Circular on CENVAT Credit wrongly taken"
4. [Contribution by CA. Manoj Gupta, and contributor is available on Mobile No. 9350760606 / email-id: mgupta2803@gmail.com ] A Useful Article on "Investment in Property is Safe or Dangerous" What's New
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