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2016 (6) TMI 1027 - CALCUTTA HIGH COURT

2016 (6) TMI 1027 - CALCUTTA HIGH COURT - TMI - Disallowance of payment of luxury tax - CIT (A) deleted the disallowance which was upheld by the learned Tribunal - Held that:- Both the CIT(A) and the learned Tribunal were of the opinion that payment of tax made in the relevant assessment year or before the filing of return for the relevant assessment year was deductible under section 43B irrespective of the year in which the liability might have been incurred. Correctness of the aforesaid view h .....

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TA No.368 (Kol) of 2006 and ITA No.661 (Kol) of 2006 both pertaining to the assessment year 2002- 03. The former appeal was an appeal of the assessee and the latter appeal was of the revenue. The appeal of the revenue was restricted to deletion of an order disallowing a sum of ₹ 1,37,03,258/- on account of payment of luxury tax. The assessing officer had disallowed the expenditure on the following grounds:- As the luxury tax demand also included penalty of ₹ 6,81,00,001/- and it is n .....

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cannot be said that the liability was incurred during the current previous year. In view of the above discussion, it is held that the payment made by the assessee is towards the penalty and also the liability has been incurred in the period prior to the commencement of the current previous year. Hence, ₹ 5,38,07,429/- is being disallowed. As the assessee has already disallowed ₹ 4,01,04,000/- in this respect the net disallowance amount to ₹ 1,37,03,258/-. In an appeal filed by .....

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or liability of any tax is allowable on payment basis. There is no dispute that during the accounting year under consideration, the assessee made payment of ₹ 9,95,280/- + ₹ 88,07,978/-. Another sum of ₹ 39,00,000/- was paid before due date for filing of return. The entire sum, i.e. ₹ 1,37,03,258/- was allowable as per Section 43B. In this view of the matter, we find no reason to interfere with the order of the C.I.T.(A) in deleting the addition made by the A.O. purely on .....

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