TaxTMI 
TaxTMI 
2020 (1) TMI 1566
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....cally filed its return of income for A.Y. 2008-09 on 29.09.008 declaring total income at Rs. 98,41,65,289/-. Subsequently, assessee revised the return of income wherein the income was declared at Rs. 98,74,32,790/-. The case was selected for scrutiny and thereafter assessment was framed u/s 143(3) of the Act vide order dated 29.10.2012 and the total income was determined at Rs. 1,75,00,85,820/-. Aggrieved by the order of AO, assessee carried the matter before Ld.CIT(A) who vide order dated 14.03.2017 (in appeal No.CIT(A), Pune - 1/10725/2016-17) dismissed the appeal of the assessee. Aggrieved by the order of Ld.CIT(A), assessee is now in appeal before us and has raised the following effective ground : "Ground No.1 : Disallowance of Contr....
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....t of the appellant is that the above amount was collected under Public Liability Insurance Act 1991. As per sec. 23 of the PLI Act, Central Govt. was required to formulate Rules for the manner in which and the period within which the amount received was required to be remitted by the insurer u/s 4(2D) of the PLI Act. The manner in which the contribution so collected is required to be remitted was prescribed in December, 2008 and the appellant made the payment of accumulated balance on 2/01/2009. Till then the amount in question was shown as current liability. Considering the above provision it can well be seen that there was impossibility of paying the amount as no mechanism for the same was put in place. The appellant claims that the amoun....
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....7(supra), the issue of disallowance u/s 43B of the Act should be decided in assessee's favour. Ld. D.R. on the other hand, supported the order of AO. 4. We have heard the rival submissions and perused the material on record. The issue in the present case is with respect to disallowance u/s 43B of the Act. We find that identical issue arose in assessee's own case for A.Y. 2006-07 before the Tribunal. The Tribunal vide order dated 21.01.2019 in ITA No.1653/PUN/2015 (supra) held that no disallowance of amount can be made u/s 43B of the Act. The relevant findings of the Tribunal read as under : "10. We have heard the rival contentions and perused the record. The assessee was a joint venture between Bajaj Allianz General Insurance Company L....
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....ses before us is that the contribution so collected by the assessee which had to be remitted to the fund created under Public Liability Fund Act, in the absence of any such fund being created till the due date of filing of the return of income and, hence, not being contributed, whether can be added as income of the assessee under section 43B of the Act? 11. The relevant provisions of the Public Liability Fund Act, 1991 are as under:- "4(1) Every owner shall take out, before he starts handling any hazardous substance, one or more insurance policies providing for contracts of insurance thereby he is insured against liability to give relief under sub-section (1) of section 3;. xxxxxx 4(2C) Every owner shall also, together with the ....
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....the collection of the contribution to ERF account cannot be regarded as income of the assessee. At best it is governed by the principle of diversion of Income by overriding title. In this regard, we find support from the ratio laid down by the Hon‟ble Supreme Court in the case of Siddheshwar Sahakari Sakhar Karkhana Limited, 270 ITR 1(SC), wherein it has been laid down that in case the assessee acted as an agent in collecting the amounts and remitting the same to the Government and trustees, then the money collected by the assessee was not reaching the assessee as part of its income, but the collection was made "for and on behalf of the person to whom it is payable". We further find support from the decision of Hon‟ble Supreme C....
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.... provided for such deposit. 14. Before parting, we may also point out that there is no merit in the order of CIT(A) in holding the said payment to be in the nature of cess. The Ho'ble Supreme Court in the case of M/s Guruswamy & Co. Etc. (supra) has decided the said issue at para 21 of its judgment and has held that the word "cess‟ means tax and generally used when the levy is for such specifically administrative expenses which the name indicates i.e. health cess, education cess, road cess, etc. The said levy (i.e. cess) is an additional levy with tax and is within the powers of State Legislature to levy the same. Applying the said principle to the facts of the case, where the levy is prescribed under the PLI Act, cannot be said to....