TaxTMI 
TaxTMI 
2009 (5) TMI 123
X X X X Extracts X X X X
X X X X Extracts X X X X
....ion 143(3) of the Income-tax Act, 1961. First we will consider the appeal filed by the assessee for the assessment year 2003-04 in I.T.A. No. 331/Coch/2008. The first ground raised by the assessee is that the Commissioner of Income-tax (Appeals) has erred in confirming the disallowance of interest amounting to Rs. 18,88,690 treating it as expenditure incurred in relation to exempted income under section 14A of the income-tax Act, 1961. The learned chartered accountant appearing for the assessee has produced a copy of the order passed by the Income-tax Appellate Tribunal, Cochin Bench, in the case of Asst. CIT v. Veega Holidays & Parks (P) Ltd. in I.T.A. No. 281/Coch/2008, wherein the Tribunal has held that the disallowance under se....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ion of the Special Bench holding that section 14A is retrospective was also not available before the Tribunal while passing the said order in the case of Veega Holidays & Parks (P.) Ltd. Therefore, the decision relied on by the learned chartered accountant is clearly distinguishable. As far as the present case is concerned, the judgment of the Special Bench is available before us and we are bound to follow the same. Therefore, we remit the issue back to the Assessing Officer with a direction to reconsider the issue of section 14A in the light of the rules framed. If the Assessing Officer comes to a finding that the assessee has incurred direct or indirect expenditure in earning exempted income, the assessing authority shall proceed to make ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....g of the return have to be allowed as a deduction irrespective of the fact whether the contributions related to the employer or employee. Regarding the amendment brought in respect of employer's contribution, the Supreme Court has held that the amendment was retrospective as held in Allied Motors P. Ltd. v. CIT [1997] 224 ITR 677. In the said decision, the Supreme Court has held that the amendment is retrospective and in the later decision of the Supreme Court in the case of CIT v. Vinay Cement Ltd. [2009] 313 ITR (St.) 1 it has held that the payments should be allowed as a deduction if they were made before the due date of filing of the return. In view of the above decisions, the decision of the jurisdictional High Court in the case of CIT....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e circumstances, satisfaction or dissatisfaction under section 43B is paramount. In the case of employees' contribution if payments are not made within the time allowed so as to get the benefit of section 43B, then the provisions of sections 36(1)(va)/2(24)(x) will apply and the consequence will follow. Where the payment is found to be deductible under section 43B, no further consequence follows. Therefore, the contention of the Revenue that this issue has to be considered independent of section 43B is not acceptable. Therefore, we accept the contention of the assessee and direct the Assessing Officer to give deduction for the amount of Rs. 16,20,040 while computing the taxable income of the assessee. The assessee is partly successful in....