TaxTMI 
TaxTMI 
2009 (5) TMI 28
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....f the case, the ITAT was justified in deleting the addition of Rs.61,412 made by the Assessing Officer on account of disallowance of landscaping expenses not recovered u/s Section 35(1)(iv) of the Income Tax Act by wrongly relying on the decision in ITA No.1546/JP95 dtd. 30.03.2001?" 2. Subsequently a third question was framed which reads as follows: 3. "Whether, in the facts and circumstances of the case, bottling fees chargeable from the assessee under the Rules framed under the Rajasthan Excise Act, 1950 and interest chargeable on late payment of bottling fees, amounts to tax, duty, cess or fees within the meaning of Section 43B of IT Act, 1961, so as to attract the said provisions while considering allowability of deduction of such expenses." 3. The first dispute in essence related to the applicability of Section 43B of the Income Tax Act, 1961 (in short the `Act') The High Court held that the said provision has no application. 4. The second question was decided in favour of the revenue so far as it relates landscaping expenses. That has become final. 5. The dispute relates to assessment year 1988-89. The question arose in the background of the view Assessing Off....
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....happening and that cannot be actual payment as required under Section 43B of Act for allowance as deduction in the computation of profits. Section 43B after amendment w.e.f. 1.4.1989 refers to any sum payable by assessee by way of tax, duty or fee by whatever name called under any law for the time being in force. The basic requirement, therefore, is that the amount payable must be by way of tax, duty and cess under any law for the time being in force. The bottling fees for acquiring a right of bottling of IMFL which is determined under the Excise Act and Rule 69 of the Rules is payable by the assessee as consideration for acquiring the exclusive privilege. It is neither fee nor tax but the consideration for grant of approval by the Government as terms of contract in exercise of its rights to enter a contract in respect of the exclusive right to deal in bottling liquor in all its manifestations. 9. Section 43B as it stood on 1.4.1989 reads as follows: "43B. Certain deductions to be only on actual payment - Notwithstanding anything contained in any other provision of this Act, a deduction otherwise allowable under this Act in respect of - (a) any sum payable by the assessee ....
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....n the exercise of State's power of taxation where levy and collection is duly authorised by law as distinct from amount chargeable on principle as consideration payable under contract. 11. The principle of statutory interpretation is well known and well settled that when particular words pertaining to a class, category or genus are followed by general words, the general words are construed as limited to things of the same kind as those specified. This rule is known as the rule of ejusdem generic. It applies when: (1) the statute contains an enumeration of specific words; (2) the subjects of enumeration constitute a class or category; (3) that class or category is not exhausted by the enumeration; (4) the general terms follow the enumeration; and (5) there is no indication of a different legislative intent. 12. Reference in this connection may be made to Amar Chandra v. Collector of Excise, Tripura (AIR 1972 SC 1863) and Housing Board of Haryana v. Haryana (AIR 1996 SC 434) 13. The 'Tax', 'Duty', 'Cess' or 'fee' constituting a class denotes to various kinds of imposts by State in its sovereign power of taxation to raise revenue for the State....
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....on was re-iterated in Har Shankar v. Dy. Excise and Taxation Commissioner (AIR 1975 SC 1121) and State of U.P. v. Sheopat Rai (AIR 1994 SC 813). 17. In Ahmedabad Urban Development Authority v. Sharad Kumar Jayantgi Kumar Pasawalla (AIR 1992 SC 2038) it was held that the crucial expression in Section 43B is "by way of". Therefore, it was the duty of revenue authorities to ascertain whether the deduction which is to be tested on the touchstone of Section 43B(a) is the amount payable is by way of tax or duty or fee or cess. The High Court was justified in holding that the amount does not fall within the purview of Section 43B. The High Court's view is correct. 18. The appeal is dismissed. IN THE SUPREME COURT OF INDIA Commissioner of Income Tax, Udaipur Rajasthan Versus Mcdowell & Co. Ltd. Dr. ARIJIT PASAYAT and Dr. MUKUNDAKAM SHARMA, JJ. CIVIL APPEAL NO. 3472 OF 2007 May 08, 2009 JUDGMENT Dr. ARIJIT PASAYAT, J. - Questioning correctness of the judgment rendered by a Division Bench of the Rajasthan High Court at Jodhpur this appeal has been filed. The questions r....