Section 40(a)(i) [Disallowance for non deduction of TDS ]is not applicable to depreciation. SAB Miller India LtdJULY 3, 2015 [2015] 63 taxmann.com 341 (Mumbai - Trib.) following SKOL Breweries (Mum Trib). Punjab and Haryana High Court in Mark Auto Industries 57/2012 dtd 08-10-12 has pronounced that 40(a)(i) is not applicable to capital expenditure.

Admission fee paid to clubs is revenue in nature .[ Delhi High Court in Samtel Color Ltd [2009] [IT Appeal No.1152 of 2008, dated 20-1-2009] followed by Mum Trib in SAB Miller 63 taxmann.com 341

ITAT Mumbai in Sunshield Chemicals held that inclusive method of valuation u/s 145A introduced by Finance Bill 1998 wef AY 1999-2000 is not relevant under present regime of indirect taxes and under likely roll out of GST. ITAT also held that only basic customs duty and central sales tax on which credit is not allowed can be said to paid or incurred to bring the inventory to its present location and condition. All other indirect taxes including Vat are more of in nature of current assets to be set off against excise duty/vat payable can be again added to inventories because Supreme Court in Eicher Tractors has held that credit of duty once awarded can not be effaced. Further ITAT following SC in Indo Nippon 261 ITR 275 has said that trading results both for inclusive and exclusive methods shall be same. Comments : Punjab and Haryana High Court in Avery Cycle Indus Ltd. [07-01-2015] has upheld the same view.

The Hon'ble Supreme Court in the case of Eicher Motors v. UOI, 1999(106) E.L.T. 3 (S.C.) has observed that”……… when on the strength of the Rules available, certain acts have been done by the parties concerned, incidents following thereto must take place in accordance with the Scheme under which the duty had been paid on the manufactured products and if such a situation is sought to be altered, necessarily it follows that the right, which had accrued to a party such as the availability of a scheme, is affected and, in particular, it loses sight of the fact that the provision for facility of credit is as good as tax paid till tax is adjusted on future goods on the basis of the several commitments which would have been made by the assesses concerned. Therefore, the Scheme sought to be introduced cannot be made applicable to the goods which had already come into existence in respect of which the earlier Scheme was applied under which the assessees had availed of the credit facility for payment of taxes. It is on the basis of the earlier Scheme necessarily that the taxes have to be adjusted and payment made complete. Any manner or mode of application of the said Rule would result in affecting the rights of the assesses……………” Hence credit of taxes on stock, inputs sold/consumed and not lying in the stock can not be denied under Rule 21(4) which says that where goods as input or output lying in stock of a taxable person become tax free from a particular date, then from that date no ITC shall be admissible on sale of goods lying in stock or on using the goods as inputs for making such tax free goods.

Pending Appeals before ITAT where tax effect does not exceed Rs. 10 lacs (enhanced from 4 lacs) to be withdrawn/ not pressed w.e.f. 10-12-2015 retrospectively. Similar limit for HC is Rs. 25 lacs (enhanced from 10 lacs) to apply retrospectively. However for Supreme Court the monetary limit of Rs. 25 lacs (no change since 09-02-11) to apply prospectively for appeals filed before SC on or after 10-12-2015. [Circular 21/2015 dated 10-12-2015] Comments: Earlier SC in Suman Dhamija on 01-07-2015 had pronounced that earlier Instructions No. 3/2011 dtd 09-02-2011 on the subject applies prospectively . The SC decisions was equally applicable to subsequent instruction no 5/2014 dated 10-07-2014. Due to SC decisions CBDT earlier issued letter on 27-08-2015 to file review petitions/misc application where appeals were rejected before various courts due to retrospective application of instructions. Earlier Allahabad High Court in Shyam Bidi Works on 06-05-15, consolidating all the earlier high court judgments on the subject had held that instructions have to be read in light of National Litigation Policy 2009 which is a beneficial piece of legislation and hence instructions are applicable retrospectively.