TaxTMI 
TaxTMI 
2010 (11) TMI 766
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....estment made u/s 54EC of IT Act amounting to Rs.57,50,000 stating that the investment has not been made within the statutory period of six months which is incorrect. 3. That the Appellant craves leave to alter, modify or otherwise amend the grounds of appeal hereinbefore stated should this become necessary." 3. In respect of ground no. 1 of the appeal we have heard the learned representatives of the parties and have perused the orders of the authorities below. We have observed that the assessee claimed weighted deduction u/s 35(1)(ii) of the Income Tax Act for contribution to approved institution for scientific research expenditure. AO denied the claim of the assessee on the ground that the deduction u/s 35 could not be allowed until the approval is extended by the prescribed authority. Since the research centre is yet to be approved by the Central Government by Notification in official gazette, AO rejected the claim of deduction of Rs.14,76,223. C.I.T(A) has also confirmed the action of the AO and has held that mere recommendation of CBDT does not amount to extension of approval as required u/s 35(1) of the Act. 4. During the course of hearing before ....
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....sions of the learned D.R. We also observe that no details are placed on record as to when the assessee received the sale proceeds in respect of the Mumbai property and when the sale proceeds were made by the assessee company to claim benefit of section 54EC of the Act. Considering the above facts and in the interest of justice we consider it prudent that the above issue be restored to the AO with a direction that the assessee will furnish the requisite details to the AO of the receipt of sale proceeds and the date of investment. If the AO is satisfied that the said investment had been made within a period of 6 months from the date of the receipt of the sale proceeds, assessee will get the deduction u/s 54EC of the Act. We may state that if the assessee fails to furnish requisite details to the satisfaction of the AO, AO will be at liberty to decide the same as per provisions of law on the basis of the material before him. Hence ground no. 2 of the appeal taken by the assessee is allowed for statistical purposes. ITA No. 1721(Kol)/2008 9. Now we take up the appeal of the revenue. The department has disputed the above order of the C.I.T(A) on the following grounds....
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.... expenditure. C.I.T(A) has also placed reliance on the decision of the Apex Court in the case of India Cables AIR (1972) (SC) 2195. Hence, department is in further appeal before the Tribunal. 12. During the course of hearing the learned D.R. relied on the order of the AO whereas the learned AR of the assessee submitted that similar issue in the case of the assessee was considered by the I.T.A.T., Kolkata Bench in the assessee's own case for the assessment year 2001-02 in ITA No.448(Kol)/2005 vide order dated 21.04.06 (copy placed on record) and the Tribunal directed the AO to allow deduction in accordance with the provisions of section 35DDA at 20% instead of the entire amount with a direction to allow the balance of 20% each in four succeeding years and the department had agreed with the direction of the ITAT and did not dispute the same in further appeal. Learned D.R. has not disputed the above contention of the learned A.R. 13. In view of the above submissions of the learned representatives of the parties and respectfully following the earlier order of the Tribunal dated 21.04.2006 (supra), we modify the orders of the auithorities below and direct that the cl....
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....ducted by the appellant. The AO is directed to allow depreciation as per law." Hence the department is in further appeal before the Tribunal. 16. During the course of hearing, the learned D.R. placed reliance on the order of the AO whereas the learned A.R. submitted that the above issue is covered in the assessee's case for the assessment year 1994-95 reported in (2008), 23 SOT 58, copy placed on record and also in the assessee's own case for assessment year 1997-98 in ITA No.2900(Kol)/2003 vide order dated 20th July, 2007. Learned D.R. has not disputed the above contention of the assessee. 17. In view of the above, we do not find any reason to interfere with the order of the learned C.I.T(A) and accordingly reject ground no. 2 of the appeal taken by the department. 18. In respect of ground no. 3 of the appeal, the AO has stated that the assessee deposited Rs.3,53,727 towards employees' contribution to provident fund after the due date as provided u/s 36(1)(va) of the Act. Therefore, the AO in terms of the provisions of section 2(24)(x) of the Act treated the said amount as income of the assessee. Being aggrieved, the assessee filed appeal be....
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....urt in the case of C.I.T. vs AIMIL Ltd. dated 23.12.09 (2010) 1 TAXMANN.Com 73 (Delhi). Hence department is in further appeal before the Tribunal. 5. During the course of hearing, the learned D.R. submitted that section 36(1)(va) read with section 2(24)(x) of the Act provides that due date of payment of employees' contribution to provident fund and if it is not paid within due date, the same cannot be allowed as deduction if it is paid belatedly. Learned D.R. submitted that Special Bench ITAT in the case of ITC Ltd. (supra) has held that the provisions of section 43B of the Act will not apply in respect of payment of employees' contribution to provident fund. Learned D.R. further submitted that the decision of the Hon'ble Apex Court in the case of Vinay Cement Ltd. (supra) deals with the provisions of section 43B of the Act and in respect of employees' contribution to provident fund, the provisions of section 43B does not apply. He further submitted that the decision of the Hon'ble Delhi High Court in the case of AIMIL Ltd. (supra) has also been decided by following the decision of Vinay Cement Ltd. (supra). He further submitted that the only issue decided on those appeal....
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.... standing order, award, contract of service or otherwise." 43B. Notwithstanding anything contained in any other provision of this Act, a deduction otherwise allowable under this Act in respect of - a. ............... b. Any sum payable by the assessee as an employer by way of contribution to any provident fund or superannuation fund or gratuity fund or any other fund for the welfare of employees, or c. ............... d. e. ................ f. ................ shall be allowed (irrespective of the previous year in which the liability to pay such sum was incurred by the assessee according to the method of accounting regularly employed by him) only in computing the income referred to in section 28 of that previous year in which such sum is actually paid by him: Provided that nothing contained in this section shall apply in relation to any sum which is actually paid by the assessee on or before the due date applicable in his case for furnishing the return of income under sub-section (1) of section 139 in respect of the previous year in which the liability to pay such sum was incurred as aforesaid....
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.... and apply only when a deduction is otherwise allowable under the Income-tax Act. In other words, the very applicability of the non-obstante clause would come into play only when a deduction is otherwise allowable under the Incometax Act. Thus section 43B cannot be pressed into service to allow a deduction which is otherwise not allowable under the Income-tax Act including section 36(1)/(va) thereof. In order to avail the beneflt of section 43B upon actual payment, the assessee must show that the deduction claimed by it u/s 43B is otherwise allowable under the provisions of the Income-tax Act including section 36(1)/(va) thereof. (iii) Section 43B bars deduction, which is otherwise allowable under the Income-tax Act, of any sum referred to in clauses (a) to (f) unless it is actually paid. Thus the factum of actual payment of any sum referred to in clauses (a) to (f) is relevant only when the deduction is otherwise allowable under the Income-tax Act. There are several provisions in the Income-tax Act, which set out the conditions for the allowability of deductions of those very sums which are referred to in section 43B. Those provisions would be rendered otiose if a view w....
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....eas provisions of section 36(1)(va) specifically deal with deduction in respect of payment of employees contribution to the Provident Fund. Therefore, the provisions of section 36(1)(va), being special provisions enacted to deal with specific matter would, in our view, prevail over the general provisions of section 43B on the principle that a general clause does not explain to those things that have been previously provided for specifically. 10. We have gone through the decisions (cited supra) in which it is held that employees' contribution to provident fund would be eligible for deduction if it is paid before due date prescribed u/s 139(1) for filing the return of income. However, we do not find any such observation in the said cases (cited supra) that deduction u/s 43B would have to be allowed even if the deductions in respect of which payments have been made in terms of section 43B are otherwise not allowable under the Income Tax Act. In fact it has not even the question raised in those decisions as to whether deduction which is not otherwise allowable under the Income Tax Act, could at all be allowed on payment basis u/s 43B. It is well-settled principle that a judgm....
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....the assessee could not furnish the requisite details in support of the claims made towards transaction cost. 26. On the other hand, learned A.R. supported the order of the learned C.I.T(A) and he referred to pages 6 and 7 of the order of the learned C.I.T(A). He further submitted that the assessee claimed for transfer of the above business assets, the transaction cost aggregating Rs.11.65 crores and the assessee has expended till 31.03.2010 Rs.9.98 crores and, therefore, the contention of the department that the assessee merely made the provisions towards transaction cost is not justified. Learned A.R. referred to page 11 of the paper book which is in respect of claim of Rs.8.70 crores for sale of I.E.L. shares. However, learned A.R. conceded that the assessee in the assessment year under consideration made the provision and out of which a sum of Rs.4,34,48,000 was the payment to be made to M/s Ensign Brick Ford Co., U.S.A. and referred to page 13 of the paper book which is a copy of the approval given by the Reserve Bank of India vide letter dated 13.12.2003. However, the learned A.R. could not establish as to when the exact payment of the said amount of Rs.4,34,48,000 w....