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1 - 10 of 22 (0.47 seconds)Section 234B in The Income Tax Act, 1961 [Entire Act]
Bajaj Tempo Ltd. Bombay vs Commissioner Of Income Tax,Bombay ... on 24 April, 1992
18. If we examine the relevant provisions of section 80-IA.(4A) of the Act and the object of its insertion to the tax statute in the light of the budget speech of the Hon'ble Finance Minister and the abovesaid judicial pronouncements, we would find that the legislature has given a fillip of deductions to those enterprises who engage themselves in developing, maintaining and operating any infrastructure facilities for economic growth of the nation as it was felt by the legislature that inadequate infrastructure was a key constraint of our economic progress. As held by the Apex Court in the case of Bajaj Tempo Ltd. v. CIT (supra), the provisions of promoting economic growth should be interpreted liberally and the restriction on it too has to be construed so as to advance the objective of the provisions and not to frustrate it. If we put the facts of the case with the parameter laid down by the Apex Court and the various High Courts, we would find that the assessee though not entered into an agreement with the State Government at the initial stage but has obtained the tender/contract by virtue of a valid assignment, which was duly recognised by the State Government, should be deemed to have entered into an agreement with the State Government for construction of the impugned bridge on BOT basis. It is not the case of the revenue that the entire expenditure incurred in the construction of the aforesaid bridge was not borne by the assessee but by M/s Ajay Constructions, the main tenderer. The revenue has rejected the claim of the assessee for the simple reason that the assessee had never entered into any contract with the State Government and the assessee- company is nothing but a colourable device to evade tax. It is a settled position of law that the company is a juristic entity and it should be considered independent from the shareholders or the directors. Admittedly, M/s Ajay Construction, the original tenderer, have assigned the remaining work of the contract/tender along with the expenditure incurred by it to Smt. Usha Agrawal, the promoter of the assessee-company though an agreement dated 1-4-1995 and thereafter the construction work was undertaken by the promoter of the assessee-company till its incorporation. When the permission of the assignment was granted by the State Government, fresh agreement was executed between the assessee-company and the main tenderer, M/s Ajay Constructions, in which the assessee- company has ratified all the deeds and acts of its promoter. Smt. Usha Agrawal, and owned/taken over all the assets and liabilities of its promoter. The action of assigning and the work of construction undertaken by the assessee was recognised by the State Government and a tripartite agreement was executed between the assessee, M/s Ajay Constructions and the State Government through which the State Government have recognised that the assessee has stepped into the shoes of M/s Ajay Constructions and notified authorising the assessee to collect the toll tax for a particular period. A copy of the letter dated 22-5-2000, to this effect is also placed before us. The assessee has also placed various correspondence entered into between the assessee and the State Government and the letter dated 26-8-1995. through which the assessee was informed about the notification in his favour to collect the toll tax. A copy of the letter placed at page 140 of the compilation of the assessee. Copies of the notification and various receipts of toll tax are also placed on record for our perusal. It is also revealed from various correspondence of the assessee with the State Government that the assignment of contract was duly recognised by the State Government and it was admitted by them that the actual construction work was undertaken by the assessee only.
Commissioner Of Income-Tax, Central-I vs Jayashree Charity Trust on 11 December, 1984
Following the rule of interpretation of the taxing statutes laid down by the Hon'ble Apex Court, their Lordships of the Calcutta High Court have held in the case of CIT v. Jayashree Charity Trust (supra) that the words of a statute must be construed so as to give a sensible meaning to them. The words ought to be construed ut res magis valeat quam pereat.
K.P. Varghese vs The Income Tax Officer,Ernakulam, And ... on 4 September, 1981
In the case of K.P. Varghese v. Income Tax Officer (supra) their Lordships of the Apex Court have held that the speeches made by the members of the legislature on the floor of the house when the bill is being debated are inadmissible for the purpose of interpreting the statutory provision but the speech made by the mover of the bill explaining the reason for its introduction can certainly be referred to for the purpose of ascertaining the mischief sought to be remedied by the legislation and the object and purpose for which legislation is enacted. This is in accord with the recent trend in juristic thought not only in western countries but also in India, that the interpretation of a statute being an exercise in the ascertainment of meaning every thing which is logically relevant should be admissible. Their Lordships have further held that a statutory provision must be so construed, if possible, that absurdity and mischief may be avoided. Where the plain literal interpretation of a statutory provision produces a manifestly absurd and unjust result which could never have been intended by the legislature, the court may modify the language used by the legislature or even do some violance to it, so as to achieve the obvious intention of the legislature and produce a rational construction.
Juggilal Kamlapat, Kanpur vs Commissioner Of Income-Tax, Lucknow on 31 July, 1969
19. From a careful perusal of the text and tenor of the tender we are of the view that the tender can be duly assigned with the approval of the Chief Engineer of PWD in favour of any person and the assignee would step into the shoes of the tenderer on the same terms and conditions. Since the assessee- company has ratified all acts and deeds of its promoter, Smt. Usha Agrawal, and owned all the assets and liabilities of its promoter through an agreement of assignment dated 21-7-1995, executed between the assessee and M/s Ajay Constructions after obtaining approval from the State Government, the assessee shall be deemed to have undertaken the construction work since 1-4-1995. We have also carefully perused the statements of accounts in the light of various judgments referred to by the parties and find that though the financial assistance and the machineries were provided by M/s Ajay Constructions to the assessee-company in which the proprietor of M/s Ajay Constructions and his wife are the sole directors but this fact cannot be ignored that ultimately the contract was executed by the assessee- company and the act of assignment was duly recognised by the State Government. No doubt, it is true that in view of the judgment of the Apex Court in the case of Juggilal Kamlapat v. CIT and McDowell & Co. v. CTO (supra), the judicial authorities are competent enough to pierce the corporate veil and to ascertain the real state of affairs. If we look, into the real state of affairs, we would find that Ajay Agrawal has obtained the tender through its proprietorship concern, M/s Ajay Constructions from the State Government and later on it assigned the contract to the assessee-company i.e. Ayush Ajay Constructions in which Mr. Ajay Agrawal and his wife Smt. Usha Agrawal, were the sole directors, to avail the tax deductions under section 80-IA(4A) of the Act inasmuch as the deductions are only given to those enterprises which are owned by the companies registered in India or by a consortium of such companies. Since the Government has provided this deduction in order to encourage economic growth of the country, the plentitude of exemption should not be whittled down by laying stress on ambiguity here and there. If it is proved that the assessee-company has obtained the status of a tenderer by virtue of a valid assignment, it should not be denied from the benefit of deduction provided by the Central Government through introduction of sub-section (4A) of section 80-IA of the Act.
Section 156 in The Income Tax Act, 1961 [Entire Act]
Section 234A in The Income Tax Act, 1961 [Entire Act]
Finance Act, 1999
Commissioner Of Income Tax, Karnataka, ... vs M/S. Shaan Finance (P) Ltd., Bangalore on 20 March, 1998
Reiterating the same view, the Apex Court in the case of CIT v. Shaan Finance (P) Ltd. (1998) 231 ITR 308 (SC) has held that in interpreting a fiscal statute, the court cannot proceed to make good the deficiencies if there be any. The court must interpret the statute as it stands and in case of doubt, in a manner favourable to the taxpayer.