ITAT DECISIONS

Issue: Notice U/s 143 (2)
Nulcon India Ltd. V/s ITO (ITAT Delhi Bench “C”)
In this case, Dept has picked up case for scrutiny on the
last day of the month in which notice can be issued. Dept
has sent notice u/s 143 (2) by speed post. The Bench
decided that if notice is sent by the speed post
authorities, the postal authorities act as agent of the AO.
Hence, the notice has to be served to the assessee within
the one year from the end of the month in which return
was filed. Mere issue of notice and dispatch thereto on the
last day will not make the notice legal one. If “A” receives
notice after the 12 month, it will make proceeding null
and void.
Issue: Accrual of Income
Rama Associates Ltd V/s DCIT Circle 15 (1) New Delhi
(ITAT Delhi Bench “G”)
The Bench decided that income can be brought to tax only
on the basis of its accrual or receipt and if income has
neither accrued nor received, the same can not be
brought to tax either on notional basis or on basis of
accounting entry being passed by the assessee.
Issue: Allowability of Interest expenses on share
investment.
Macimtosh Finance Estate Ltd V/s Addl CIT Spl. Range 36
The tribunal decided that interest paid on fund utilized for
the purpose of investment in shares will not be allowed as
revenue expenses. Further “A” can not add the interest
expenses to the cost of investment to claim deduction u/s
48 in the year of sale of investment. If it is allowed it
would defeat the purpose of introduction of provision of
section 14A of the Act.
Issue: Interest on short payment of TDS
SBI V/s ACIT Cir. TDS II (3)
In this case, AO passed order levying interest on short
deduction of TDS u/s 201 (1) & (1A) after the expiry of 4
years from the end of relevant financial years. The Dept
contended that order was passed pursuant to survey
conducted at the premises of “A” and the order was
passed within 4 years from the date of survey. Tribunal
decided that order passed u/s 201 (1) (1A) beyond 4
years will be legal one and date of survey would not alter
the legal position with regard to statutory time limit to
pass the order.