TMI Blog2012 (8) TMI 240X X X X Extracts X X X X X X X X Extracts X X X X ..... eemed payment that would be relevant for considering the deduction - against assessee. - Tax Case (Appeal) No.635 of 2006 - - - Dated:- 19-7-2012 - Mrs.JUSTICE CHITRA VENKATARAMAN, Mr.JUSTICE K.RAVICHANDRA BAABU, JJ. For Appellant : Mr.P.J.Rishikesh For Respondent: Mr.T.Ravikumar J U D G M E N T CHITRA VENKATARAMAN, J. This Tax Case (Appeal), filed at the instance of the assessee as against the order of the Income Tax Appellate Tribunal relating to the assessment year 1997-98, was admitted by this Court on the following substantial questions of law: "1. Whether in the facts and circumstances of the case, the Tribunal ought to have considered the fact that the act of depositing the bonus amounts payable to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... actually paid before the due date for filing the return. Since the amount was paid long after the due date for filing the return, mere depositing it in a bank account would not entitle the assessee for deduction. Accordingly, the claim was rejected. 3. Aggrieved by this, the assessee went on appeal before the Commissioner of Income Tax (Appeals), who agreed with the assessee following the earlier order passed in the assessee's own case for the year 1994-95. Accepting the case of the assessee that the reasons for belated payment was on account of the workers going on strike and not accepting the payment of bonus, which compelled the assessee to deposit the said amount in a separate account maintained by the asssessee, the Commissioner of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee had not dealt with the money for any of its business purpose; thus the conduct of the assessee would prove that the amount had in fact been set apart and the same should be treated as a deemed payment for the purpose of granting deduction. Referring to the decision of the Supreme Court reported in (2009) 319 ITR 306 (Commissioner of Income Tax Kolkata III V. Alom Extrusions Limited), wherein the Supreme Court had considered the effect of the omission of the second proviso to Section 43 B of the Income Tax Act under Finance Act, 2003, as having retrospective effect from 1.4.1988, he submitted that going by the deposit made in the separate account, which cannot be in any manner used by the asssessee, the deduction has to be granted. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion claimed by the assessee was to be tested on the touchstone of Section 43 B(a) of the Income Tax Act as to whether there had been an actual payment of duty or not. Pointing out to the provisions of Section 43 B of the Income Tax Act, the Apex Court observed as follows: "The requirement of section 43B of the Act is actual payment and not deemed payment as condition precedent for making the claim for deduction in respect of any of the expenditure incurred by the assessee during the relevant previous year specified in section 43B. The furnishing of bank guarantee cannot be equated with actual payment which requires that money must flow from the assessee to the public exchequer as required under section 43B. By no stretch of imagination ca ..... X X X X Extracts X X X X X X X X Extracts X X X X
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