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TMI Blog2015 (2) TMI 547X X X X Extracts X X X X X X X X Extracts X X X X ..... f section 40(a)(ia) are not applicable. Alternatively, learned counsel submitted that the assessee has paid the amount in the subsequent year, therefore, in view of the provisos to section 40(a)(ia) and the proviso to section 40(a)(i) the same has to be allowed in the previous year in which the tax has been paid. Since admittedly, the assessee has paid tax in subsequent financial year, according to learned counsel, the same has to be allowed in the subsequent assessment year. 3. We heard Shri K. K. John, the learned Departmental representative also. The learned Departmental representative very fairly conceded that if the assessee paid the tax in the subsequent assessment year the same has to be allowed in the year in which it was actually paid. Therefore, the Department may not have any objection to allow the claim of the assessee in the subsequent year provided the assessee actually paid the tax. 4. We have considered the rival submissions on either side and also perused the material available on record. The issue whether the amount paid by the assessee has to be disallowed or the amount remains to be paid as on the last day of the financial year has to be allowed was the issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eved by an amendment. This is precisely what was done by the apex court in the case of CIT v. Kelvinator of India Ltd. [2010] 320 ITR 561 (SC). But the same com parison between the draft and the enacted law is not permissible. Nor can the draft or the bill be used for the purpose of regulating the meaning and purport of the enacted law. It is the finally enacted law which is the will of the Legislature. The learned Tribunal fell into an error in not realizing this aspect of the matter. The learned Tribunal held 'that where language is clear the inten tion of the Legislature is to be gathered from the language used'. Having held so, it was not open to seek to interpret the section on the basis of any comparison between the draft and the section actually enacted nor was it open to speculate as to the effect of the so-called representations made by the professional bodies. The learned Tribunal held that "section 40(a)(ia) of the Act cre ates a legal fiction by virtue of which even the genuine and admissible expenses claimed by an assessee under the head 'Income from business and profession': if the assessee does not deduct TDS on such expenses are disallowed. Havin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellants are asking was to read in that definition, these precise words, which were consciously and deliberately omitted from the definition. That would amount to supplying the casus omissus and we do not think that it is possible, particularly, in this case. The law of supplying the casus omissus by the courts is extremely clear and settled that though this court may supply the casus omissus, it would be in the rarest of the rare case and thus supplying of this casus omissus would be extremely necessary due to the inadvertent omission on the part of the Legislature. But, that is certainly not the case here. We shall now endeavour to show that no other interpretation is possible. The key words used in section 40(a)(ia), according to us, are 'on which tax is deductible at source under Chapter XVII-B'. If the ques tion is 'which expenses are sought to be disallowed'? The answer is bound to be 'those expenses on which tax is deductible at source under Chapter XVII-B. Once this is realized nothing turns on the basis of the fact that the Legislature used the word 'payable' and not 'paid or credited'. Unless any amount is payable, it can neither b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this narrow interpretation of section 40(a)(ia), the question still survives if the Tribunal in case of Merilyn Shipping and Transports v. Addl. CIT was accurate in its opinion. In this context, we would like to examine two aspects. Firstly, what would be the correct interpretation of the said provision. Secondly, whether our such understanding of the language used by the Legislature should waver on the premise that as propounded by the Tribunal, this was a case of conscious omission on the part of Parliament. Both these aspects we would address one after another. If one looks closely at the provision, in question, adverse consequences of not being able to claim deduction on certain payments irrespective of the provisions contained in sections 30 to 38 of the Act would flow if the following requirements are satisfied : (a) There is interest, commission or brokerage, rent, royalty, fees for professional services or fees for technical services payable to resident or amounts payable to a contractor or sub-contractor being resident for carrying out any work. (b) These amounts are such on which tax is deductible at source under Chapter XVII-B. (c) Such tax has not been deducted or a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n adopting such an interpretation. We only highlight that we would not readily accept that the Legislature desired to bring about an incongruous and seemingly irreconcilable consequences. The decision of the Supreme Court in the case of CIT v. Ashokbhai Chimanbhai [1965] 56 ITR 42 (SC), would not alter this situation. The said decision, of course, recognises the concept of ascertaining the profit and loss from the business or profession with reference to a certain period i.e., the accounting year. In this context, last date of such accounting period would assume considerable significance. However, this decision nowhere indicates that the events which take place during the accounting period should be ignored and the ascertainment of fulfilling a certain condition provided under the statute must be judged with reference to last date of the accounting period. Particularly, in the context of requirements of section 40(a)(ia) of the Act, we see no warrant in the said decision of the Supreme Court to apply the test of payability only as on March 31 of the year under consideration. Merely because, accounts are closed on that date and the computation of profit and loss is to be judged with ..... 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