Karnataka High Court
The Commissioner Of Income Tax vs M/S Ace Manufacturing Systems Ltd on 5 April, 2011
Bench: N.Kumar, Ravi Malimath
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2.. The Asst. VCf0"nf:r}:issi;oa't':er af Income-Tax, Circie -?-v3V;t{~»s,.}.'-- ' __§C.R;.BuifdErsg_._ _ Qu..een3.Road; " """ "
1' a N Msavngazore " ...APPELLANTS {uS§zE§.;fiA i<i';'§3°f_"_;Egré;~:§i;$.?'i'§;:§ far Sri. MN. Seshacha£a, Advccate) Emu;
Aw Manufacturing Systemg Lté, V-fwéa'. 46?~459, 3.2"' Crass, 143?' Qhase, Peenya Enéustriai fizraa, \.
4. A3 :38!' Sectécrz 145A any tax, duty, cess, fee payabie actuafiy or ifscurreé fly éihe assessea to briV{»2:.Ig?*.Ttf:e goods to the pface of its Eocation and conditior.2A~~é[s' date 3f the vaiuatéon is E3 be inciuded for the Enceme chargeabie urader the heéd '»"_ P'r'Qfi"E:'$ busine$s or profession". Once _sue::hvaI t;«.e is ¥n.C'Eu:<:i'ed at the purchase vaiue, the assessee 'i§ é:.i*a£"it'led 'fie.V_C{ee;ucf¥g3ffVVVunder the debit side and 0nv%g:{'~~t'he is taken into Consideration. the Qrofét from expert; '::z£r}: :'*."er ' is concerned, subsequenffo'-fiirofikigiéé a formuia. It is in that formuFég_the 'q:_; e sE'E:r>.Vr:i'+is"'wf}iethe"r the excise duty and sales tax is to be Vesy;<:ViVL;<_:f.éci: the totaf turnover. The Apex Cou,,r*£ ié9a the cénsebif' Commissioner of Income Tax vs. L§§ksh}7jf«.fl?aCf§:'h@~.4:W9fks reported in (2007) 290 m2 66.7"
(SC) heia' while interpreting Section 7::_80/~«'HC as'."L.'nc?'£,:=f.'?« . " ",,,VTf?erefore, just as commission " . fs=§Cez'ved by an assesgee is reiaiable to experts yea': it cannot form gart of "£"umover'j, 'f3eeen?;r'e,__ '~;%nwerk_ebie. This reasoning is excise duty end seies-zfex eise Cennei: form part of fine "turnover". Just' as interest}.---._ commission, etc. did net emanate from "turnover", so also excise duty and sa[es'~fe;; did not emanate from such turnover} ""~._Sir2fcje excise duty and se/es~rax c.:f:7d"'n--et ;'r;i_,v0{\re'V:3r.=;} such turnover, such taxes bed t;.jo'V.§*=e e;><c/need. Commission, interest,' .rent,"'.ef<':« dd' 'yield profits, but they do parfek_e"'~§;::f '}'j/7e Character of turnesrer an;-f--,---- if.'/'7_e.réi2-'7r,>_re, the,«. were not includible in ''t.fVie.,''i£iota§f :, If so, then excise duty,,,_e,nd, canrzei"
form per£"'A..Qf~ the under 5.
80HHC('3;)k'V i'19,f?1;er§f:e ""._for_rnu/a becomes unworkable. Se/e:sV--"feTX"en,Lj!, alsnno not have any elernenfi of is the position even " the _ '4Cese,'::_".."'of rent, commission, interest ._:ft"is Vfmportant to bear in:.'}n'ri:.(/ e;.>'a<:i$e.. duty éeVn'n'ésales--tex are indirect faxes; _ recovered by the es'sessee en .'~bene'!r' .. of V V 3 the Ge vernm ent:
Tnerfefere, if "five;-.{" are made re/atab/e to expu.~fs;'««___é:*h.e fo/rnznfe under s,80i~/HC wouid / é./ E '3 ....
cmfirrefi is me warkabiiizy 32' the formula in s.8OHHC (3) as if stood at the materzai time.
5. Ir': View of the aforesaid authoritative pronouncement ef the Apex Court, we do not see-..>any merit in the ciaim of the revenue. AccordingEy{.é.t§§é"é4§'pé'ai is rejected as no substantiai question of Eami ajrivséé fir consideration.