TaxTMI 
TaxTMI 
2007 (7) TMI 238
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.... for the year ending on March 31, 1994, showing a loss of Rs. 4,52,09,221 and in the tax audit report filed in Form No. 3CD with the return of income, bonus of Rs. 33,35,994 was provided for, which had not been paid till September 23, 1994. 3. Challenging the said adjustment and levy of additional tax thereon, the assessee preferred an appeal before the Commissioner of Income-tax (Appeals) contending that the bonus payable to the employees was an expenditure incurred and laid down wholly and exclusively for the purpose of and in the course of the business carried on. It was also contended that the balance-sheet prepared for the said assessment year was true and correct. The Commissioner, by order dated August 2, 1995, held that the provisions of section 43B of the Act override the provisions of section 36(1) of the Act and accordingly, the disallowance was properly made and it was a prima facie adjustment made under section 143(1) of the Act. 4. Aggrieved by the said order dated August 2, 1995, the assessee again preferred an appeal before the Tribunal, which, by order dated July 3, 2006, held that the Assessing Officer had rightly added back the bonus provision of Rs. 33,35,....
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....nd, or (b) is subject to or suffers from a permanent physical disability (other than blindness) which has the effect of reducing substantially his capacity to engage in a gainful employment or occupation : Provided that the assessee produces before the Assessing Officer, in respect of the first assessment year for which deduction is claimed in relation to each such employee under this clause,— (i) in a case referred to in sub-clause (a), a certificate as to his total blindness from a registered medical practitioner being an oculist ; and (ii) in a case referred to in sub-clause (b), a certificate as to the permanent physical disability referred to in the said sub-clause from a registered medical practitioner : Provided further that nothing contained in this clause shall apply in the case of an employee whose income in the previous year chargeable under the head 'Salaries' exceeds twenty thousand rupees. Explanation 1.—In this clause, 'salary' includes the pay, allowances, bonus or commission payable monthly or otherwise ; Explanation 2.—For the removal of doubts, it is hereby declared that where a deduction under this clause is allowed for any assessment ....
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....of any bad debt or part thereof, which is written off as irrecoverable in the accounts of the assessee for the previous year : Provided that in the case of an assessee to which clause (viia) applies, the amount of the deduction relating to any such debt or part thereof shall be limited to the amount by which such debt or part thereof exceeds the credit balance in the provision for bad and doubtful debts account made under that clause ; Explanation.—For the purposes of this clause, any bad debt or part thereof written off as . . . (viia) in respect of any provision for bad and doubtful debts made by- (a) a scheduled bank not being a bank approved by the Central Government for the purposes of clause (viiia) or a bank incorporated by or under the laws of a country outside India or a non-scheduled bank, an amount not exceeding five per cent. of the total income (computed before making any deduction under this clause and Chapter VI-A) and an amount not exceeding two per cent. of the aggregate average advances made by the rural branches of such bank computed in the prescribed manner ; (b) a bank, being a bank incorporated by or under the laws of a country outside India, ....
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....ormed and registered in India with the main object of carrying on the business of providing long-term finance for construction or purchase of houses in India for residential purposes, an amount not exceeding forty per cent. of the total income (computed before making any deduction under this clause and Chapter VI-A) carried to such reserve account : Provided that the corporation or, as the case may be, the company is for the time being approved by the Central Government for the purposes of this clause : Provided further that where the aggregate of the amounts carried to such reserve account from time to time exceeds twice the amount of the paid-up share capital (excluding the amounts capitalised from reserves) of the corporation, or, as the case may be, the company no allowance under this clause shall be made in respect of such excess ; Explanation.—In this clause,— (a) 'financial corporation' shall include a public company and a Government company ; (b) 'public company' shall have the meaning assigned to it in section 3 of the Companies Act, 1956 (1 of 1956) ; (c) 'Government company' shall have the meaning assigned to it in section 617 of the Companies Act, ....
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.... any other provision of this Act, a deduction otherwise allowable under this Act in respect of— (a) any sum payable by the assessee by way of tax, duty, cess or fee, by whatever name called, under any law for the time being in force, or (b) 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 employee, or (c) any sum referred to in clause (ii) of sub-section (1) of section 36, or (d) any sum payable by the assessee as interest on any loan or borrowing from any public financial institution or a State financial corporation or a State industrial investment corporation, in accordance with the terms and conditions of the agreement governing such loan or borrowing,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 : Provided that nothing contained in this section shall apply in relation to any sum referred to....
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.... section,— (a) 'public financial institutions' shall have the meaning assigned to it in section 4A of the Companies Act, 1956 (1 of 1956) ; (b) 'State financial corporation' means a financial corporation established under section 3 or section 3A or an institution notified under section 46 of the State Financial Corporations Act, 1951 (63 of 1951) ; (c) 'State industrial investment corporation' means a Government company within the meaning of section 617 of the Companies Act, 1956 (1 of 1956), engaged in the business of providing long-term finance for industrial projects and approved by the Central Government under clause (viii) of sub-section (1) of section 36." 7. There is no dispute as to the position that section 43B of the Act overrides section 36(1) of the Act, in view of the non obstante clause employed in section 43B of the Act. If that be so, to decide as to the power of the respondent for making a prima facie adjustment in the computation of taxable total income while passing order under section 143(1) of the Act, it is apt to refer section 143(1) of the Act, which reads as under : "143. Assessment.—(1)(a) Where a return has been made under section 139, ....