9911796707
TMI Blog2011 (4) TMI 730X X X X Extracts X X X X X X X X Extracts X X X X ..... sue in this appeal of the revenue is against the order of CIT(A) in allowing deduction under section 80-IB of the Act on delayed payment of employee's contribution of Provident Fund and contract payments on which payment of TDS was delayed, consequently, Assessing Officer disallowed by invoking provisions of section 4o(a)(ia) of the Act. For this, revenue has raised the following two grounds: "1. That on the facts and circumstances of the case and in law, the Ld. CIT(Appeals)-VIII, Kolkata, has erred in allowing the deduction under section 80-IB on disallowance of Rs. 1,58,844 on delayed payment of employees' contribution to the Provident Fund and Rs. 23,93,016 under section 40(a)(ia) for delayed payment of TDS. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed and added back to the returned income of the assessee amounting to Rs.1,58,844. Similarly, in respect to the contract payment, the assessee filed details of TDS deducted as under: Date of TDS Amount paid Amount of TDS Due date of payment Actual date of payment 31-1-2006 28-2-2006 15,43,919 8,49,097 23,93,016 34,586 19.021 7-2-2006 7-3-2006 10-7-2006 10-7-2006 The Assessing Officer noted that TDS payments in terms of section 200(1) of the Act from contract payments were deducted under section 194C of the Act but payment made belatedly to the Government Account. Accordingly, Assessing Officer by invoking provisions of section 40(a)(ia) of the Act, disallowed the contract payments and added back to the returned income of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the assessment order its gross total income has increased. Perusal of the wording of the Sec. 80-IB of the Income-tax Act reveals that the deduction is to be worked out at a percentage of profits and gains derived by the appellant in business which is eligible for deduction under Sec. 80-IB of the Income-tax Act. The addition made in the assessment order has effectively enhanced such profits and gains. In my opinion, therefore, the appellant is eligible for the statutory deduction on this enhanced figures of profits and gains as computed by the A.O. The A.O. is accordingly directed to do so. This ground of appeal is allowed." Aggrieved, revenue is in appeal before us. 5. We have heard rival contentions and gone through facts and circu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and contract payments disallowed by invoking the provisions of section 40(a)(ia) of the Act. She stated that CIT(A) has rightly allowed the claim of the assessee by directing the Assessing Officer to compute deduction under section 80-IB of the Act on enhanced total income, which is resulting into addition made in the assessment to its gross total income. According to Ld. Counsel, by making addition the Assessing Officer has effectively enhanced business profits and deduction should have been computed on enhanced figures and CIT(A) has rightly directed the Assessing Officer accordingly. 7. We find that the undisputed facts are that the assessee has not challenged the additions in respect to employees' contribution to PF not deposited withi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction from such profits and gains of an amount equal to such percentage and for such number of assessment years as specified in this section." We find from the above section that deduction under section 80-IB of the Act is available to an assessee whose gross total income includes any profits and gains derived from eligible business as specified in the section. Here the assessee is claiming deduction on an item of disallowance made by the Assessing Officer on account of employees' contribution to PF, which was not deposited within the due date. This is neither an item of profit or gain of eligible ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Officer nor CIT(A) has discussed why this item is not eligible for deduction under section 80-IB or why it is eligible. But seeing dates of payments of TDS, it seems that these are paid within due date of filing of return of income, the assessee even otherwise is eligible for deduction and the Assessing Officer cannot invoke the provisions of section 40(a)(ia) of the Act for making disallowance. We are of the view that, let the Assessing Officer consider this issue in the light of the allowance of deduction of this expenditure as the assessee has made payment of this TDS within the due date of filing of return of income and in case, the assessee is not allowed deduction of this expenditure by invoking the provisions of section 40(a)(ia) ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
