Tribunal partially allows appeal, dismisses deduction & interest grounds, allows disallowance of contributions

The Tribunal partially allowed the appeal, dismissing grounds related to the deduction under different provisions and the charging of interest, while allowing the disallowance of contributions to Provident Fund and Superannuation Fund for statistical purposes.

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Issues Involved:
1. Deduction u/s 80HHC under normal provisions and on book profit u/s 115JB.
2. Disallowance of contributions to Provident Fund and Superannuation Fund.
3. Charging of interest u/s 234B on taxes levied u/s 115JB.

Summary:

Issue 1: Deduction u/s 80HHC

The assessee challenged the CIT(A)'s decision confirming the Assessing Officer's action of not granting deduction u/s 80HHC under normal provisions and on book profit computed u/s 115JB. The Tribunal noted that the issue under ground 1.1 was covered against the assessee by the Supreme Court judgment in CIT v. Shirke Construction Equipment Ltd. [2007] 291 ITR 380 (SC), while the issue under ground 1.2 was in favor of the assessee as per the Special Bench decision in Dy. CIT v. Syncome Formulations (I) Ltd. [2007] 106 ITD 193 (Mum.) (SB). Consequently, ground 1.1 was dismissed, and ground 1.2 was allowed.

Issue 2: Disallowance of Contributions to Provident Fund and Superannuation Fund

The assessee contested the disallowance of employees' and employer's contributions to the Provident Fund and Superannuation Fund on the grounds of late payment. The Tribunal, relying on the Supreme Court judgment in CIT v. Vinay Cement Ltd. [2007] 166 Taxman 62, held that employer's contributions paid before the due date for filing the return were not hit by section 43B. For employees' contributions, the Tribunal referred to IMP Power Ltd. v. ITO [2007] 107 TTJ (Mum.) 522, stating that such contributions must be credited to the employees' account before the due date prescribed under the relevant law. The Tribunal directed the Assessing Officer to allow/disallow the claims based on these principles, treating ground 2 as allowed for statistical purposes.

Issue 3: Charging of Interest u/s 234B

The assessee argued against the charging of interest u/s 234B on taxes levied u/s 115JB, citing the Supreme Court decision in CIT v. Kwality Biscuits [2006] 284 ITR 434. The Tribunal, however, noted that section 115JB(5) specifies that all other provisions of the Income-tax Act apply to companies covered under this section. The Tribunal held that the total income computed u/s 115JB is liable for advance tax and interest u/s 234B, supported by the Karnataka High Court decision in Jindal Thermal Power Co. Ltd. v. Dy. CIT [2006] 286 ITR 182. The Tribunal confirmed the Assessing Officer's action in charging interest u/s 234B, dismissing ground 3.

Conclusion:

The appeal was partly allowed, with ground 1.2 and ground 2 allowed for statistical purposes, while grounds 1.1 and 3 were dismissed.

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