The Supreme Court has issued notice to Moser Baer India Ltd on a petition filed by the Income-Tax Department alleging that the computer hardware manufacturer had retracted its tax exemption claims only to avail of benefits from the depreciation of its units.
A bench headed by Justice S H Kapadia has issued notice to Delhi-based Moser Baer, the manufacturer of floppy discs, on a petition challenging the Delhi High Court ruling that held that the time-limit for filing declarations for withdrawing exemption claims was only in the nature of direction and not mandatory.
The High Court had held that the requirement under Section 10B (7) of the I-T Act whereby the assessee filed a declaration for withdrawing its exemption claim was mandatory.
However, it said that the time-limit prescribed for filing such declarations before the due date of filing of income-tax returns was only a matter of direction.
However, according to the department, it is not justified to say that the requirement was only procedural.
Moser Baer was retracting from the exemption claim only to avail of benefits of brought forward depreciation of the floppy unit against the income of the current year, it alleged.