TaxTMI 
TaxTMI 
2014 (9) TMI 1020
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.... has to adjudicate the issue on merit. On a query from the bench whether the assessee admitted for the disallowance during the course of assessment proceedings before the assessing officer, the ld.representative for the assessee submitted that he is not aware of the exact thing. The assessee may by ignorance have admitted for disallowance. We heard Shri M. Anil Kumar, the ld.DR. 4. The assessing officer disallowed the claim of the assessee on the ground that the assessee could not offer any explanation for failure to deduct tax u/s 194J in respect of payment made for consumption testing fee. The CIT(A) found that the assessee agreed for disallowance and admitted that he would not prefer any appeal on that ground. Though the ld.counsel for the assessee claims that he could not confirm whether the assessee admitted for disallowance, he explained that even after it was admitted before the assessing officer because of ignorance that cannot be a reason to confirm the order of the assessing officer. It is well settled principles of law that once the assessee admitted for disallowance before the assessing officer on facts, the same cannot be reagitated before the appellate authorities. I....
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....men, who are known as Tharakans. According to the ld.DR, from the very same Tharakan the assessee purchased fish to the extent of Rs. 1,66,59,325 and made the payment by cheque during the year under consideration. Therefore, nothing prevented the assessee from paying this amount of Rs. 17,01,500 also through account payee cheque. The assessee also could not produce the party for examination to find out whether they were producers or traders or they were middlemen. From the explanation of the assessee, according to the ld.DR, the fish was purchased from middlemen / tharakan, therefore, the payment made to tharakan was rightly disallowed u/s 40A(3). 8. We have considered the rival submissions on either side and also perused the material available on record. Admittedly, the assessee purchased fish by paying cash exceeding Rs. 20,000. We have carefully gone through the circular issued by CBDT in circular No.10/2008 dated 05- -12-2008 which reads as follows: "CLARIFICATION REGARDING THE MEANING OF THE EXPRESSION 'FISH OR FISH PRODUCTS' USED IN SUBCLAUSE (iii) OF CLAUSE (f) OF RULE 6DD OF THE INCOME-TAX RULES, 1962 Circular no.10/2008, DATED 05-12-2008 Representations have been re....
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....r or a middleman who facilitate finalization of the price between the seller and purchaser. A tharakan also known as Agent who would act either on behalf of seller or purchaser as the case may be. However, headman of fishermen is part of fishermen who will sort the fish catch and sell the fish on behalf of fishermen. Therefore, it is necessary to find out the exact role played by the person to whom the payment was made by cash. Merely because the assessee has paid Rs. 1,66,59,325 by cheque to the very same person that cannot alone be a reason to disallow the claim of the assessee. When the assessee claims that the payment was made to a headman who sorts the fish catch, the assessing officer shall find out the exact role played by the person who received payment by cash. When the very same person received huge payment by cheque, it may not be difficult for the assessing officer to summon them and examine the actual role played by him. Had the assessee claimed that the fish or fish products are purchased from fisherman or producers the matter would stand on different footing. Since the fish was admittedly purchased from a person other than fisherman or producers the exact role of tha....
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....he only contention of the assessee is that the amount has already been paid and that provisions of section 40(a)(ia) is applicable only in respect of the amount remains to be paid. No doubt, in the case of Merlyn Shipping & Transports (supra), the Special Bench of this Tribunal found that the amount remains to be paid at the year end alone is hit by provisions of section 40(a)(ia) of the Act and in respect of the amount already paid the provisions of section 40(a)(ia) cannot be applied. 14. We have also carefully gone through the judgment of the Allahabad High Court in CIT vs M/s Vector Shipping Services (P) Ltd (supra), copy of which is filed by the assessee. The Allahabad High Court, after reproducing the relevant paragraph from the order of CIT(A) and referring to the decision of the Special Bench of this Tribunal in Merilyin Shipping & Transports (supra) found that the Tribunal has not committed an error. It is obvious that there is no discussion about the correctness or otherwise of the decision rendered by the Special Bench of this Tribunal in Merilyn Shipping & Transports (supra). However, we find that the Gujarat High Court in the case of CIT vs Sikandarkhan N Tunvar ITA N....
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....e. The main thrust of the majority view is based on the fact "that the Legislature has replaced the expression "amounts credited or paid" with the expression 'payable' in the final enactment. Comparison between the pre-amendment and post amendment law is permissible for the purpose of ascertaining the mischief sought to be remedied or the object sought to be achieved by an amendment. This is precisely what was done by the Apex Court in the case of CIT Vs. Kelvinator reported in 2010(2) SCC 723. But the same comparison between the draft and the enacted law is not permissible. Nor can the draft or the bill be used for the purpose of regulating the meaning and purport of the enacted law. It is the finally enacted law which is the will of the legislature. The Learned Tribunal fell into an error in not realizing this aspect of the matter. The Learned Tribunal held "that where language is clear the intention of the legislature is to be gathered from the language used". Having held so, it was not open to seek to interpret the section on the basis of any comparison between the draft and the section actually enacted nor was it open to speculate as to the effect of the so-called representa....
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....at the legislature being conscious of the fact and being armed with all the Committee reports and also being armed with the factual data, deliberately avoided those words. What the appellants are asking was to read in that definition, these precise words, which were consciously and deliberately omitted from the definition. That would amount to supplying the casus omissus and we do not think that it is possible, particularly, in this case. The law of supplying the casus omissus by the courts is extremely clear and settled that though this Court may supply the casus omissus, it would be in the rarest of the rate case and thus supplying of this casus omissus would be extremely necessary due to the inadvertent omission on the part of the legislature. But, that is certainly not the case here. We shall now endeavour to show that no other interpretation is possible. The key words used in Section 40(a)(ia), according to us, are "on which tax is deductible at source under Chapter XVII-B". If the question is "which expenses are sought to be disallowed?" The answer is bound to be "those expenses on which tax is deductible at source under Chapter XVII-B. Once this is realized nothing turns on....
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....interpretation of section 40(a)(ia), the question still survives if the Tribunal in case of M/s Merilyn Shipping & Transpors vs. ACIT (supra) was accurate in its opinion. In this context, we would like to examine two aspects. Firstly, what would be the correct interpretation of the said provision. Secondly, whether our such understanding of the language used by the legislature should waver on the premise that as propounded by the Tribunal, this was a case of conscious omission on the part of the Parliament. Both these aspects we would address one after another. If one looks closely to the provision, in question, adverse consequences of not being able to claim deduction on certain payments irrespective of the provisions contained in Sections 30 to 38 of the Act would flow if the following requirements are satisfied:- (a) There is interest, commission or brokerage, rent, royalty, fees for professional services or fees for technical services payable to resident or amounts payable to a contractor or sub-contractor being resident for carrying out any work. (b) These amounts are such on which tax is deductible at source under XVIII-B. (c) Such tax has not been deducted or after deduct....
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....t readily accept that the legislature desired to bring about an incongruous and seemingly irreconcilable consequences. The decision of he Supreme Court in the case of Commissioner of Income-Tax, Gujarat vs. Ashokbhai Chimanbhai (supra), would no6t alter this situation. The said decision, of course, recognizes the concept of ascertaining the profit and loss from the business or profession with reference to a certain period i.e. the accounting year. In this context, last date of such accounting period would assume considerable significance. However, this decision nowhere indicates that the events which take place during the accounting period should be ignored and the ascertainment of fulfilling a certain condition provided under the statute must be judged with reference to last date of the accounting period. Particularly, in the context of requirements f Section 40(a)(ia) of the Act, we see no warrant in the said decision of the Supreme Court to apply the test of payability only as on 31st March of the year under consideration. Merely because, accounts are closed on that date and the computation of profit and loss is to be judged with reference to such date, does not mean that whethe....