TMI Blog2010 (11) TMI 555X X X X Extracts X X X X X X X X Extracts X X X X ..... tors or subcontractors on which tax is deductible at source as per the provisions of the Act, section 40(a)(ia) be attracted. Since assessee has not deducted TDS as per provisions of section 194C of the Act, held that the C.I.T.(A) has rightly confirmed the action of the AO in disallowing the said sum of Rs.1,15,983. - ITA No. 1255/Kol/2010 - - - Dated:- 19-11-2010 - B.R. Mittal, C.D. Rao, JJ. P.K. Mishra for the Appellant S.M. Surana for the Respondent ORDER B.R. Mittal: The Department has filed this appeal for the assessment year 2007-08 against the order of the learned C.I.T(A) dated 09.04.2010 on the following grounds: "1. That on the facts and in the circumstances of the case ld. Commissioner of Income-tax (Appeals) has erred in deleting the addition of Rs.89,319/- made in the assessment order u/s 36(1)(va) read with section 2(24)(x) on account of employees' contribution to PF which was not paid within the 'due date' specified in the relevant Act without considering the ratio of the decision of the ITAT (Special Bench) Kolkata in the case of Jt. CIT vs ITC Ltd. [299 ITR (AT) 341] 2. That on the facts and in the circumstances of the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowable. In this respect, the learned C.I.T(A) has relied on the decisions of the Hon'ble Apex Court in the case of C.I.T vs Vinay Cement Ltd. 231 ITR 268 and the decision of the Delhi High Court in the case of C.I.T. vs AIMIL Ltd. dated 23.12.09 (2010) 1 TAXMANN.Com 73 (Delhi). Hence department is in further appeal before the Tribunal. 5. During the course of hearing, the learned D.R. submitted that section 36(1)(va) read with section 2(24)(x) of the Act provides that due date of payment of employees' contribution to provident fund and if it is not paid within due date, the same cannot be allowed as deduction if it is paid belatedly. Learned D.R. submitted that Special Bench ITAT in the case of ITC Ltd. (supra) has held that the provisions of section 43B of the Act will not apply in respect of payment of employees' contribution to provident fund. Learned D.R. further submitted that the decision of the Hon'ble Apex Court in the case of Vinay Cement Ltd. (supra) deals with the provisions of section 43B of the Act and in respect of employees' contribution to provident fund, the provisions of section 43B does not apply. He further submitted that the decision of the Hon'ble Delhi H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the employee's account in the relevant fund under any Act, rule, order or notification issued there under or under any standing order, award, contract of service or otherwise." 43B. Notwithstanding anything contained in any other provision of this Act, a deduction otherwise allowable under this Act in respect of- a ............... 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 employees, or c. ............... d. ............... e. ............... f. ............... 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 which is actually paid by the assessee on or before the due date applicable in his case for furnishing the return of income under sub-section (1) of section 139 in respect of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e it clear that the said section would have overriding effect and apply only when a deduction is otherwise allowable under the Income-tax Act. In other words, the very applicability of the non-obstante clause would come into play only when a deduction is otherwise allowable under the Income tax Act. Thus section 43B cannot be pressed into service to allow a deduction which is otherwise not allowable under the Income-tax Act including section 36(1)/(va) thereof. In order to avail the benefit of section 43B upon actual payment, the assessee must show that the deduction claimed by it u/s 43B is otherwise allowable under the provisions of the Income-tax Act including section 36(1)/(va) thereof. (iii) Section 43B bars deduction, which is otherwise allowable under the Income-tax Act, of any sum referred to in clauses (a) to (f) unless it is actually paid. Thus the factum of actual payment of any sum referred to in clauses (a) to (f) is relevant only when the deduction is otherwise allowable under the Income-tax Act. There are several provisions in the Income-tax Act, which set out the conditions for the allowability of deductions of those very sums which are referred to in section 43 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ms unless they are actually paid and whereas provisions of section 36(1)(va) specifically deal with deduction in respect of payment of employees contribution to the Provident Fund. Therefore, the provisions of section 36(1)(va), being special provisions enacted to deal with specific matter would, in our view, prevail over the general provisions of section 43B on the principle that a general clause does not explain to those things that have been previously provided for specifically. 10. We have gone through the decisions (cited supra) in which it is held that employees' contribution to provident fund would be eligible for deduction if it is paid before due date prescribed u/s 139(1) for filing the return of income. However, we do not find any such observation in the said cases (cited supra) that deduction u/s 43B would have to be allowed even if the deductions in respect of which payments have been made in terms of section 43B are otherwise not allowable under the Income Tax Act. In fact it has not even the question raised in those decisions as to whether deduction which is not otherwise allowable under the Income Tax Act, could at all be allowed on payment basis u/s 43B. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C.I.T(A). 15. We have carefully considered the orders of the authorities below and the submissions of the learned representatives of the parties. We agree with the learned A.R. that once there is a net surplus from the share dealing of capita market segment and future options segments taken together and there is a net profit therefrom, the assessee is entitled for rebate of entire STT as per section 88E of the Act. We agree with the learned A.R. that section 88E of the Act does not provide for such restrictions as made by the AO while granting rebate u/s 88E of the Act. We uphold the order of the learned C.I.T(A) and reject ground no. 2 of the appeal taken by the department. 16. In respect of ground of C.O., the relevant facts are that the AO observed from tax audit report that the assessee made payments of Rs.22,551, Rs.30,002 and Rs.63,429 totalling Rs.1,15,982 to contractors without making any TDS. Assessee has not disputed the above fact before the AO but submitted that the said amount could not be disallowed u/s 40(a)(ia) of the Act because the said section is applicable only if the amount is payable and not if the amount had already been paid. AO did not agree with t ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
