TaxTMI 
TaxTMI 
2018 (2) TMI 1456
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....en as well as from bought leaves and also trading of tea. The return of income for the Asst Year 2012-13 was electronically filed by the assessee company on 27.9.2012 declaring income of Rs. 5,96,64,870/-. The ld AO observed from the Tax Audit Report of the assessee wherein the tax auditor had reported that there was unutilized amount out of withdrawals from NABARD deposit account to the tune of Rs. 15,71,331/- which was not utilized before 31.3.2012 for its intended purpose. Accordingly, the ld AO added the same as deemed income of the assessee u/s 33AB(7) of the Act. The assessee submitted that it had withdrawn an amount of Rs. 2,78,73,174/- from NABARD during the previous year ended 31.3.2012 relevant to Asst Year 2012-13 as under:- 22.6.2011 1,20,24,400 4.8.2011 68,82,300 22.11.2011 59,47,074 7.2.2012 30,19,400 2,78,73,174 The assessee submitted that the said amount was made use of it in the same financial year on the basis of placing the orders within the financial year and an aggregate sum of Rs. 2,63,01,843/- was also paid before 31.3.2012. The orders for procurement of various machineries such as conveyor, boiler, dryer mout....
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....tances of the case, and in particular the amount of disallowance made by the Assessing Officer was the amount shown by the auditors in their audit report u/s 33AB(2), the Ld. CIT(A) failed to consider the meaning of the words 'not utilized within that previous year' and thereby erred in confirming Rs. 15,71,331/- disallowed by the Assessing Officer as the auditors took the view that the expression "utilized" means 'paid'. 1.2. That on the facts and circumstances of the case, the section 33AB being a beneficial section to promote the growth and development of tea industry and in view of the payment of Rs. 9,86,370/- in the subsequent years out of said amount, the Ld. CIT(A) ought to have held that section 33AB is a beneficial section, the disallowance u/s 33AB(7) should be restricted to Rs. 6,318/- as the disallowance of Rs. 15,71,331/- was made by an erroneous interpretation of section 33AB by the auditors. 2. That the appellant craves leave to add, alter, amend, cancel, supplement or otherwise modify the grounds stated above, before or at the hearing of the appeal as it may deem fit. 4. We have heard the rival submissions. We find that the assessee had been gi....
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....n dispute that the unutilized portion of Rs. 15,71,331/- has been utilized by the assessee before the due date of filing the return of income u/s 139(1) of the Act. Though there is no relevance for the due date of filing the return of income u/s 139(1) of the Act as far as the utilization of withdrawn amounts are concerned, the same is mentioned here only to drive home the fact that the unutilized portion has been duly utilized by the assessee within a reasonable period after the end of the previous year. It is not in dispute that the entire utilization has been made in accordance with the Tea Development Scheme, 2007. Hence there is no diversion of funds for non-business purposes or for purposes other than those mentioned in the Tea Development Scheme, 2007. The revenue had taxed the unuitlised portion of Rs. 15,71,331/- as deemed income of the assessee by strictly interpreting the provisions of section 33AB(7) of the Act. This would lead to a situation where, the assessee having been given deduction in earlier year at the time of making deposit in NABARD, and had withdrawn the amounts thereon in subsequent years from NABARD deposit and utilized the same in the manner provided in ....
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....ee from his account with the Development Bank but not utilised in accordance with the scheme during the previous year will be treated as income of the year during which the withdrawal was made. There may be a situation where an assessee withdraws the amount and utilises the same in accordance with the scheme for specified purposes within the period permitted by the scheme but a part of such period may fall in the next accounting year. In such cases, the effect of the existing provisions is that though an assessee has utilised the amount in accordance with the scheme, the amount will be added to the assessee's income in the year in which the withdrawal is made. To remove this anomaly, the Amending Act, 1987 has clarified [section 32AB(6)] that in a case where the amount withdrawn has been utilised for the specified purpose within the period specified in the scheme, such amount would not form part of the income of the assessee in the previous year in which the amount has been withdrawn. (Underlining provided by us) FINANCE ACT, 1987 20.8 The utilisation of the amount withdrawn is permitted in accordance with the provisions of section 32AB and the scheme fra....
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....and by linking the same to the facts of the case before us, since the assessee had actually utilized the withdrawn amounts for intended purposes with a slight delay which got spread over next accounting year, the entire spirit of the requirements of the section 33AB(7) of the Act has been fulfilled by the assessee. 4.3. It is trite law that an incentive provision should be construed liberally. Reliance in this regard is placed on the decision of Hon'ble Supreme Court in the case of Bajaj Tempo Ltd vs CIT reported in 196 ITR 189 (SC) wherein it was held that :- " A provision in a taxing statute granting incentives for promoting growth and development should be construed liberally; and since a provision for promoting economic growth has to be interpreted liberally,the restriction on it too has to be construed so as to advance the objective of the provision and not to frustrate it." 4.3.1. Similarly the Hon'ble Supreme Court in the case of CIT vs Gwalior Rayon Silk Manufacturing Co. Ltd reported in 196 ITR 149 (SC) wherein it was held :- It is equally settled law that if the language is plain and unambiguous one can only look fairly at the language used and int....