April 2008
Questions of Law — No interference made on findings — Questions of law left open.
By Kishor Karia, Chartered Accountant
Atul Jasani, Advocate
Reading Time 2 mins
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2 Questions of Law — No interference made on
findings — Questions of law left open.
[CIT v. Alfa Laval (India) Ltd., (2008) 295 ITR 451 (SC)]
The Bombay High Court in Alfa Laval (India) Ltd. v. Deputy
Commissioner of Income-tax, (266 ITR 418) had held as follows :
(1) the assessee is entitled to value the closing stock at
market value or at cost, whichever is lower and the Assessing Officer was not
justified in valuing the items in question at 50% of the cost without
disclosing the basis of such valuation as against valuation made by the
assessee at 10% of the cost based upon auditor’s certificate and which items
were in fact sold in the subsequent year at a price less than 10%.
(2) the depreciation written back as a result of change in
the basis of working out depreciation in compliance with the Circular of the
Company Law Board and credited to the profit and loss account should not be
reduced in working out the relief u/s.32AB(3) of the Act, as it could be said
that there was withdrawal of amount from reserve or provisions.
(3) the interest from customers and sales tax set-off
received by the assessee being assessed as the part of business profits under
head ‘Profits or gains of business or profession’, the same could not be
excluded while calculating deductions u/s.80HHC of the Act.
On an appeal against the aforesaid order by the Department to
the Supreme Court, the Supreme Court dismissed the appeal stating that it was
not the case which required interference and left the question of law open.
