Responsibility Of Centre To Design Convenient Tax System: Supreme Court
NDTV
The top court said that if proper balance is achieved, unnecessary litigation can be avoided without compromising on generation of revenue.
The Supreme Court on Thursday said that in a taxation regime there is no room for presumption and it is the responsibility of the government to design a tax system which is convenient and simple so that an individual or a corporate can budget and plan. The top court, which allowed a batch of appeals filed by banks against an order of the Kerala High Court, held that the proportionate disallowance of interest is not warranted under Section 14A of Income Tax Act for investments made in tax free bonds/securities which yield tax free dividend and interest to assessee Banks in those situations where, interest free own funds available with them, exceeded their investments. Section 14A of Income Tax Act deals with expenditure incurred in relation to income not includible in total income. A bench of Justices Sanjay Kishan Kaul and Hrishikesh Roy said "With this conclusion, we unhesitatingly agree with the view taken by the ITAT favouring the assessees." Referring to the work of 18th century economist Adam Smith in 'The Wealth of Nations'', the bench said it needs to be observed here that "in taxation regime, there is no room for presumption and nothing can be taken to be implied".More Related News