IT : Payment of interest at rate of 18 per cent to creditors on basis of resolutions passed by executive committee of assessee-society was found reasonable
IT : Without rejecting books of account, addition cannot be made on basis of DVO's report
IT : 100 per cent depreciation is allowable on library books
■■■
[2015] 55 taxmann.com 188 (Allahabad)
HIGH COURT OF ALLAHABAD
Commissioner of Income-tax-I, Kanpur
v.
Indus Technical Education Society*
TARUN AGARWALA AND DR. SATISH CHANDRA, JJ.
IT APPEAL NOS. 281, 288, 289 & 290 OF 2013†
AUGUST 25, 2014
I. Section 40A(2) of the Income-tax Act, 1961 - Business disallowance - Excessive or unreasonable payments (Interest) - Assessment years 2005-06 to 2008-09 - Assessee-society had borrowed loan from various sources - In earlier years, assessee paid interest at rate of 10 per cent but during relevant assessment year interest was paid at rate of 18 per cent on basis of resolution passed by executive committee of society - Whether expediency, legitimacy and business need will have to be examined from assessee's point of view and not certainly, from department's view - Held, yes - Whether on facts payment of interest at rate of 18 per cent was reasonable - Held, yes [Para 7] [In favour of assessee]
II. Section 142A of the Income-tax Act, 1961 - Valuation Officer, estimate by (Rejection of books of account) - Assessment years 2005-06 to 2008-09 - Whether where books of account were maintained properly and were never rejected, addition could not be made on basis of DVO's report - Held, yes [Para 10] [In favour of assessee]
III. Section 32 of the Income-tax Act, 1961 - Depreciation - Allowance/Rate of (Books) - Assessment years 2005-06 to 2008-09 - Whether 100 per cent depreciation was allowable on library books which were given to students by taking library charges - Held, yes [Para 11] [In favour of assessee]
IT : Without rejecting books of account, addition cannot be made on basis of DVO's report
IT : 100 per cent depreciation is allowable on library books
■■■
[2015] 55 taxmann.com 188 (Allahabad)
HIGH COURT OF ALLAHABAD
Commissioner of Income-tax-I, Kanpur
v.
Indus Technical Education Society*
TARUN AGARWALA AND DR. SATISH CHANDRA, JJ.
IT APPEAL NOS. 281, 288, 289 & 290 OF 2013†
AUGUST 25, 2014
I. Section 40A(2) of the Income-tax Act, 1961 - Business disallowance - Excessive or unreasonable payments (Interest) - Assessment years 2005-06 to 2008-09 - Assessee-society had borrowed loan from various sources - In earlier years, assessee paid interest at rate of 10 per cent but during relevant assessment year interest was paid at rate of 18 per cent on basis of resolution passed by executive committee of society - Whether expediency, legitimacy and business need will have to be examined from assessee's point of view and not certainly, from department's view - Held, yes - Whether on facts payment of interest at rate of 18 per cent was reasonable - Held, yes [Para 7] [In favour of assessee]
II. Section 142A of the Income-tax Act, 1961 - Valuation Officer, estimate by (Rejection of books of account) - Assessment years 2005-06 to 2008-09 - Whether where books of account were maintained properly and were never rejected, addition could not be made on basis of DVO's report - Held, yes [Para 10] [In favour of assessee]
III. Section 32 of the Income-tax Act, 1961 - Depreciation - Allowance/Rate of (Books) - Assessment years 2005-06 to 2008-09 - Whether 100 per cent depreciation was allowable on library books which were given to students by taking library charges - Held, yes [Para 11] [In favour of assessee]
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