TaxTMI 
TaxTMI 
2010 (10) TMI 668
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....revious year relevant to the assessment year 2005-06 but since the assessee had not paid the taxes by 31.3.2005, the Assessing Officer disallowed the payments made amounting to Rs.8,44,613 for the assessment year 2005-06. In accordance with the provisions of law, as it is stood at the relevant point of time, the assessee had claimed deduction for the year, in which, the payment was made i.e. the year before us. In other words, payments made during the previous year relevant to the assessment year 2006-07, i.e. the year before us, were to be allowed as deduction in the assessment year 2006-07 even though these payments pertained to the preceding year. However, in the meantime, section 40(a)(ia) was amended and, accordingly, payments made before the due date were taken into account out of the ambit of disallowance under section 40(a)(ia) of the Act. As a result, even if payments were not made in the relevant previous year itself, but within the dues dates even after the end of the previous year, the payments so made were to be allowed as deduction. That is the legal backdrop in which present controversy arises, about assessee's claim of deduction for Rs.8,44,613 being payment relatab....
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....egorical finding that the claim of deduction is allowable in the assessment year 2005-06 and for this reason, the claim has not been allowed in the current year. In other words, the CIT (A) has categorically observed that the denial of deduction in the current year is on account of admissibility of the said deduction, in view of the legal position, as it is stood now, in the immediately preceding year. Let us now take a look at section 153(3) which provides that time limits for assessments, reassessments and recomputations do not apply, inter alia, in the cases where "such assessment, reassessment or recomputation is made on the assessee or on any person in consequence of, or to give effect to, any finding or direction contained in an order under section 250....". The effect of this provision is that notwithstanding any time limits contained in section 153, any orders to give effect to, or in consequence to, findings or directions contained in an order passed by the CIT(A) can be passed at any time. As to what is the nature of 'finding or direction' under section 153(3), Hon'ble Supreme Court's following observations in the case of Rajinder Nath v. CIT [1979] 120 ITR 14 (SC) provid....
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....t clear that this Tribunal does not have any powers to specifically give any directions for the year which is not in appeal before us. The only issue before us is whether the impugned disallowance was rightly made by the Assessing Officer in this year or not, and, therefore, it is not open to us to give specific direction to Assessing Officer to allow that deduction for the next year. That is not a ground of appeal before us. We may, in this regard, refer to the following observations of Hon'ble Gauhati High Court in the case of Jeypore Timber and Veneer Mills (P.) Ltd. v. CIT [1982] 137 ITR 415: "The provision of section 254 of the Act is an enabling as well as disabling provision. A passing glance creates an impression that the Tribunal has been endowed with plenary power under section 254 of the Act to pass any order as it thinks fit. However, it is not so, as it will appear in the expression "such orders thereon as it thinks fit", in section 254. The word "thereon" in the expression is a serious constriction on the exercise of power by the Tribunal. It can decide only the points or grounds raised before it whereas the Income Tax authorities can travel beyond the groun....
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....plots are finally transferred to the workers, the Assessing Officer has the power, and therefore the inherent corresponding duty, under section 153(3) of the Act to recompute the income of that subsequent year to give effect to Tribunal's finding. It is open to the assessee to approach the Assessing Officer for that purpose, or, we may further add at the cost of stating the obvious, to approach the Commissioner, along with the requisite petition for condonation of delay, for revision under section 264 of the Act. 10. In view of the above discussions, while we agree with the authorities below to the extent that merely because the amount is not allowed as deduction in the assessment year even though it was admissible, it cannot be allowed as deduction in the present year, we are also of the views that the assessee cannot be disallowed deduction in both the years. With these observations and having noted that the appropriate remedy is indeed available at other forums and that the assessee is at liberty to approach these forums, we dismiss the grievance raised by the assessee before us. 11. Subject to the observations above, the first ground of appeal is dismissed. ....
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....he impugned disallowance. The assessee gets the relief accordingly. 19. Ground no. 3 is thus allowed. 20. In Ground no. 4, the assessee is aggrieved against CIT(A)'s upholding the disallowance of 1/10th on account of motor car expenses and telephone expenses. 21. Before us, no specific arguments were raised in regard to this disallowance, therefore, this ground is dismissed as not pressed. 22. Ground No. 4 is thus dismissed. 23. In the result, appeal filed by the assessee stands partly allowed in the terms indicated above. 24. We now take up the appeal of the Assessing Officer. 25. In Ground No.1, the revenue is aggrieved in deleting the addition of Rs.42,87,133 made by the AO on account of commission. 26. The representatives agree that the issue is covered by the Third Member decision of this Tribunal in the case of Smt. Varsha G. Salunke v DCIT, 98 ITD 147(Mumbai), copy of which is placed before us, even as learned Departmental Representative simply relied on the order of the Assessing officer. Learned Departmental Representative did not dispute the issue being covered by the aforesaid Third Member or....