| Friday, May 20, 2011 |
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1. CIT VS. M/S SAMI LABS LIMITED, ITA NO. 231 OF 2009, DATED: 14 FEBRUARY 2011, KARNATAKA HIGH COURT Whether the TDS and pre-paid taxes should be set off against the total taxes payable and then only MAT credit should be allowed and on the MAT credit over which refund had been allowed, interest u/s. 244A has to be paid? That the MAT credit available to an assessee could be adjusted within a period of five years from the date of its accrual. The said credit should be set off while computing advance tax/self-assessment tax payable for the years two to six limited to the difference between the tax payable on income computed under the normal provisions and tax payable on book profits in each of those years, as per the assessee's own computation. That the MAT credit is to be set off first, thereafter TDS, then the advance tax paid and then the tax paid along with returns. However, no interest is claimable against the MAT credit. Therefore, it is clear that under no circumstances, MAT credit can become the subject matter of refund. It is only liable to be adjusted for five years and it does not carry any interest. (Please click here for judgment)
2. ACIT VS. M/S JINDAL EQUIPMENT LEASING & CONSULTANCY SERVICES LTD ITA NOS. 3808-3809/DEL/2010, ASSESSMENT YEARS: 1999-00 & 20001-2002, DATED: 21 APRIL 2011, ITAT – DELHI Whether where the disallowance is made for proportionate expenses claimed in respect of exempted income, no penalty can be levied u/s 271(1)(c) as prior to insertion of Rule 8D by the Finance Act 2008, the question of disallowance and its quantification was contentious. That prior to the insertion of section 14A, there was a genuine difference of opinion as to whether expenditure related to exempt-income could be disallowed if the same has been incurred for the purpose of the business of the assessee. The position in regard to assessments is different, namely, that the question of allowance or disallowance has to be decided on the basis of law existing at the time of making it. Therefore, even if the disallowance has been confirmed in appeal, which by itself does not lead to the charge of concealment of income or furnishing inaccurate particulars of income. Otherwise all the facts regarding incurring of expenditure have been disclosed by the assessee in the return or in the course of assessment proceedings. Therefore, there has been no suppression of facts. Thus, the levy of the penalty by the Assessing Officer was not justified. (Please click here for judgment)
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