TaxTMI 
TaxTMI 
TaxTMI 
2015 (2) TMI 810
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....resenting tax, duty or cess, levied upon him or it, whether or not paid actually. Section 43B of the 1961 Act mandates that certain deductions can be effected only on actual payment. For the assessment year 1984-85, the respondent submitted a return claiming deduction of interest payable on the purchase tax, though it was not actually paid. The plea was that the requirement of actual payment to claim the benefit under section 43B of the 1961 Act is only in respect of tax; and deduction of interest payable thereon can be claimed even without making payment. The Assessing Officer did not allow the deduction. The respondent carried the matter in appeal to the Commissioner of Income- tax (Appeals). The appeal was allowed. Thereupon, the Depart....
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....ctual tax liability, and there does not exist any justification to treat the component of interest separately. Learned counsel further submits that the Tribunal rested its conclusions on the judgment of the Supreme Court in Mahalakshmi Sugar Mills Co. v. CIT [1980] 123 ITR 429 (SC), which is totally unrelated to the actual controversy. He submits that recently the Rajasthan High Court in Shree Pipes v. Deputy CIT (Assessment) [2007] 289 ITR 154 (Raj) dealt with the issue and held that the interest is part of the tax and it cannot be treated independently. Sri Challa Gunuranjan, learned counsel for the assessee, on the other hand, submits that section 43B of the 1961 Act dealt with specific amounts that can be claimed as deductions and sinc....
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....nbsp; (a) any sum payable by the assessee by way of tax, duty, cess or fee, by whatever name called, under any law for the time being in force, or (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) any sum referred to in clause (ii) of sub-section (1) of section 36, or (d) any sum payable by the assessee as interest on any loan or borrowing from any public financial institution or a State Financia....
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....as well as the Tribunal accepted their contention by placing reliance upon the judgment of the Supreme Court in Mahalakshmi Sugar Mills Co.'s case (supra). We have carefully gone through the judgment of the Supreme Court in Mahalakshmi Sugar Mills Co.'s case (supra). Basically, it was not with reference to section 43B(d) of the 1961 Act but it was only in relation to section 10(2)(xv) of the Indian Income-tax Act, 1922 (for short "the 1922 Act"). The point for discussion in that case was as to whether the deduction of the amount payable as interest levied under section 3 of the U. P. Sugarcane Cess Act, 1956, is permissible under section 10(2)(xv) of the 1922 Act. The distinction between levy of penalty under section 4, on the one ....
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....st on tax, duty or cess under section 43B of the 1961 Act partakes of the same character as the principal amount ; in Shree Pipes' case (supra). After taking into account, the principles of interpretation and the ratio in certain decided cases, their Lordships took the view that interest that becomes payable on tax, which is otherwise permissible for deduction under the provisions of the Income-tax Act, while computing the total income, is part of tax, within the meaning of section 43B of the 1961 Act. Learned counsel for the respondent sought to impress us by pleading that Parliament itself maintained a distinction between the component of the tax, duty or cess, on the one hand, and interest, on the other hand, and wherever it wanted ....