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2018 (2) TMI 1456 - ITAT KOLKATAApplicability of section 33AB(7) against the assessee - deemed income of the assessee - utilizing the withdrawals from NABARD deposit accounts 0 assessee’s main business activity is cultivation of tea, manufacturing of tea from leaves procured from own garden as well as from bought leaves and also trading of tea - Held that:- A provision for deduction, exemption or relief should be construed reasonably and in favour of the assessee. Though equity and taxation are often strangers, attempts should be made that these do not remain always so and if a construction results in equity rather than in injustice, then such construction should be preferred to the literal construction. It is only elementary that a statutory provision is to be interpreted ut res magis valeat quam pereat, i.e to make it workable rather than redundant. Applying this legal maxim, it would be just and fair to hold that the assessee, having utilized the amounts withdrawn from NABARD deposit for its intended purposes within the time specified under the respective scheme, should not be fastened with tax liability on deemed income basis, merely because it had not utilized the entire amounts withdrawn before 31.3.2012 (i.e within that previous year). In case if the assessee is taxed on deemed income basis in this year for non-utilisation of withdrawals within that previous year, then the assessee would never get any deduction in subsequent years also for this utilization. This would in effect result in withdrawal of deduction in part earlier granted to the assessee at the time of making deposit with NABARD. The provisions of section 33AB (7) of the Act uses the expression ‘being utilised’. It is not in dispute that the assessee had placed orders for acquisition of various machineries that are required for setting up of new units to be engaged in growing and manufacturing of tea i.e acquisition for machineries for specified purposes. It is not in dispute that the assessee had paid substantial portion of the proforma invoice value as advance before 31.3.2012 and had included the same in the utilization statement before 31.3.2012 which clearly indicates its intention of utilizing the withdrawals from NABARD deposit accounts. Hence the spirit of the section had been satisfied by the assessee. In view of the reliance placed on the CBDT Circular No. 495 dated 22.9.87 explaining the scope and effect of section 32AB(6) of the Act which is pari materia with section 33AB(7) of the Act and in view of the judicial precedents relied upon hereinabove for interpretation of statutes, we hold that the action of the revenue in bringing to tax the deemed income in terms of section 33AB(7) of the Act deserves to be deleted. - Decided in favour of assessee.
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