TaxTMI 
TaxTMI 
2005 (9) TMI 54
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....nnuation fund in respect of liability as on the last day of the accounting year in respect of the entire service of the employees of the company, who were for the first time admitted to the benefits of the superannuation fund, as representing the assessee's liability for the assessment year 1977-78? 3. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the donation for Rs. 1,25,777 to an education society was allowable as an expenditure wholly and exclusively for the purpose of the business? 4. Whether, on the facts and in the circumstances of the case, the expenditure of Rs. 38,100 towards supply of tea, soft drinks is entertainment expenditure under section 37(2B) of the Income-tax Act, 1961? 5. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the road constructed by the company constituted 'plant' within the meaning of section 43(3) of the Income-tax Act, 1961, and is eligible for depreciation allowance? 6. Whether on the facts and in the circumstances of the case, the interest under section 216 could be levied on the advance tax payable itself was not underestimated bei....
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....in Mahindra and Mahindra Ltd. v. CIT [2003] 261 ITR 501 had occasion to answer a similar question, wherein this court, relying upon the judgment of the apex court in the case of CIT v. Gwalior Rayon Silk Manufacturing Co. Ltd. [1992] 196 ITR 149, has held that the road constructed within the factory premises of the company is not a plant but is a building. In this view of the matter question No. 5 herein is answered in the negative, i.e., in favour of the Revenue and against the assessee. Question No. 6: So far as question No. 6 is concerned, it pertains to interest under section 216 of the Act. The Income-tax Officer ("the ITO" for short) had levied interest under section 216 without recording any finding that the assessee had underestimated its income while filing the estimate under section 212 of the Act. Appeal was filed before the Commissioner of Income-tax (Appeals). The said appellate authority in its order observed as under: "... Section 216 provides that interest under that section is chargeable only when the advance tax payable has been underestimated and the assessee has thereby reduced the amount payable in either of the two instalments. The Income-tax Officer ....
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....erned, none of the High Courts have taken any view contrary to the view taken in the case of Vazir Sultan [1980] 122 ITR 251 (AP) on this count. He submits that in the case on hand, no finding as required under section 216 has been recorded by the Income-tax Officer in the assessment order dated September 5, 1980. Based on this he submits that no fault can be found with the finding recorded by the Tribunal in this behalf. Accordingly, he prayed that this question be answered in favour of the assessee. In rejoinder, when Mr. Kotangale, learned counsel for the Revenue was called upon to react to the above submission made by Mr. Dastur, he could not point out any adverse judgment of any court nor could he demolish the submission advanced by Mr. Dastur. Mere reading of section 216 of the Act brings out the necessity of recording a finding by the Income-tax Officer as canvassed by Mr. Dastur. In this view of the matter, no fault can be found with the view taken by the Tribunal. Thus, question No. 6 is answered in favour of the assessee and against the Revenue. Question No. 7: So far as question No. 7 is concerned, the facts found by the Tribunal are as under: "On Septembe....
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....etired on January 1, 1976 amounting to Rs. 30,57,740, and in respect of 8 officers whose services were terminated during the accounting year, the liability of which was in the sum of Rs. 8,52,913. Learned counsel for the Revenue submitted that the amount has not been actually paid and, therefore, the respondent-assessee was not entitled to claim deduction on actuarial basis unless the liability was actually discharged. Per contra, Mr. Dastur tried to support the findings recorded by the Tribunal. He reiterated the submissions which were made before the Tribunal, reproduction of which is not necessary since the same are to be found in the order of the authorities below. Mr. Dastur relying upon the decision of the Calcutta High Court in National Insurance Co. of India [1981] 127 ITR 54 submitted that since the persons, in respect of whom provision for pension was made, had already retired, there was an existing liability in terms of their employment as such the existing liability was actuarially computed and the provision for the same was made as such the amount of deduction represented an accrued liability and was an admissible deduction in computing the profits of the assesse....