TaxTMI 
TaxTMI 
2006 (7) TMI 106
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....bsp; The assessee claimed 100% depreciation with regard to certain assets leased out, namely, gas cylinders and spindles. The assessing officer refused to grant 100% depreciation in respect of those assets on the ground that they should be used collectively and cumulatively, and not individually and in isolation. On appeal, the said finding of the assessing officer was confirmed by the Commissioner of Income-tax (Appeals). 3. Similarly, the assessing officer also disallowed the contributions made by the assessee toward provident fund under section 43B of the Income Tax Act (for brevity "the Act") on the ground that the payments made by the assessee after the due date under the relevant statute, viz., the Provident Fund Act, even though they were made during the accounting year would not be deductible as per the second proviso to Section 43 B of the Act then in force. On appeal, the Commissioner of Income-tax (Appeals) sustained the said disallowance. ....
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....meaning of plant was explained as under : " .. in its ordinary sense the word includes whatever apparatus is used by a businessman for carrying on his business other than the stock-in-trade which he buys or makes for sale and that it includes all goods and chattels, fixed or movable, live or dead, which he keeps for permanent employment in his business". 10. In CIT v. Taj Mahal Hotel, [1971] 82 ITR 44 (SC), while deciding whether a sanitary and pipeline fittings installed in a hotel could be treated as plant, the Apex Court answering the question in affirmative held that the intention of the Legislature was to give the expression a very wide meaning. 11. The Gujarat High Court in CIT v. Elecon Engineering Co. Ltd., [1974] 96 ITR 672, held the word "plant" in its ordinary meaning is a word of wide import and it must be broadly construed having regard to the fact that articles like books and surgical instruments are expressly included in the definiti....
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....ion was allowable on gas cylinders at 100 per cent. 13. A Division Bench of this Court in First Leasing Co. of India Ltd. v. CIT, [2000] 164 CTR 179: [2000] 244 ITR 238, held that each bottle was an independent unit and was not dependent for its user on the availability of other bottles whether empty filled. The use of one bottle was not interconnected with the use of another bottles. Since each bottle was an individual unit and all bottles together did not constitute a single integrated unit, depreciation under the proviso to Section 32(1) (ii ) of the Act was allowable. 14. Another Division Bench of this Court in CIT Vs. Alagendran Finance Ltd, [2004] 186 CTR 102 : [2003] 264 ITR 269 considered the decision in First Leasing Co. of India Ltd. v. CIT, referred supra, and took the same view. 15. This Bench, after referring to the decisions in First Leasing Co. of India Ltd. v. CIT and CIT Vs. Alagendran Finance Ltd, referred supra, has also taken a similar view in CIT v. Upasana Finance Ltd., [2....
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....Provident Fund under section 43B of Act. Section 43B(b) of the Act provides that 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 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. 20. During the relevant assessment year, namely, 1994-95, the second proviso to section 43-B, as then in force, of course, which stands omitted by the Finance Act, 2003 with effect from 1.4.2004, imposed a further condition that no deduction shall, respect of any sum referred to in clause (b), be allowed unless such sum has actually been paid in cash or by issue of a cheque or draft or by any other mode on or before the due date as defined in the Explanati....
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....: Gem Granites v. CIT [2004] 271 ITR 322, 328 (SC) ; [2005] 1 SCC 289, page 296). As a logical corollary of the general rule that retrospective operation is not taken to be intended unless that intention is manifested by express words or necessary implication, there is a subordinate rule to the effect that a statute or a section in it is not to be construed so as to have larger retrospective operation than its language renders necessary (vide: Shyam sunder v. Ram Kumar AIR 2001 SC 2472 pp.2481, 2482: (2001) 8 SCC 24). 25. Of course, it is always not necessary, as contended by Mr. Senthilkumar, learned counsel for the assessee, an express provision be made to make a statute retrospective and the presumption against the retrospective operation may be rebutted by necessary implication, especially in a case where a new law is made to cure an acknowledged evil for the benefit of the community as a whole (vide: Zile Singh v. State of Haryana (2004) 8 SCC 1,....
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....out a legislative declaration to that effect [vide: C.W.T. v. Varadharaja Theatres Pvt. Ltd. [2001] 250 ITR 523 (Mad)). 29. It is a settled law that the fiscal legislation imposing liability is generally governed by normal presumption that it is not retrospective (vide : Halsbury's Law of England (3rd Edn.) Vol.36, page 425, Union of India v. Madan Gopal AIR 1954 SC 1954 SCR 541). It is a cardinal principle of the tax law that the law to be applied is that in force in the assessment year unless otherwise provided expressly or by necessary implication (vide: Reliance Jute and Industries Ltd. v. CIT AIR 1980 SC 251, page 252: 1980 (1) SCC 139). The above rule is applicable not only to the charging section, but also other substantive provision such as, the provision imposing penalty and it does not apply to....
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....of second proviso to section 43B of the Act will have any retrospective effect. 31. Mr. Senthilkumar, learned counsel for the assessee took us through the Report of the Task Force on Direct Taxes, reported in [2003] 259 ITR (J) 1 ; [2003]179 CTR (St.) 5 whereunder it was recommended to delete the second proviso to section 43B of the Act, but, unless there is any material to show that the said recommendation in the report of the Task Force on Direct Taxes was accepted by the legislature, it will be difficult for us to come to the conclusion that the impugned deletion of second proviso to section 43B of the Act was intended to cure the acknowledged evil or to remove the hardship. In any event, it is trite law that a taxing Act cannot, however, be called retrospective if it taxes an event which is continuing and not complete when the Act comes into force. 32. In support of his submission that the deletion of second proviso to&nbs....
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.... [vide: CWT v. B.R. Theatres and Industrial Concerns P. Ltd. [2005] 272 ITR 177 (Mad)). 34. In the instant case, the unamended provision enables the assessee to pay contribution towards provident fund, superannuation fund, gratuity fund, etc. before the due date under the respective enactments, whereas the amended provision, due to omission of second proviso to section 43-B of the Act, enables the assessee to pay contribution to provident fund, superannuation fund, gratuity fund, etc. before the filing of the return. In other words, if the assessee fails to pay contribution to the provident fund, superannuation fund, gratuity fund, etc. before the due date under the relevant Act is not entitled to the deduction without the aid of subsequent amendment, because only by way of subsequent amendment, due to the omission of the second proviso to section 43-B of the Act, the assessee is able to get deduction of payments made to....