TMI Blog2018 (9) TMI 1411X X X X Extracts X X X X X X X X Extracts X X X X ..... imation of the employer. Thus, deduction claimed on account of wage revision was held to be permissible. What is important is not the date of signing the agreement nor the later approval granted by the Government, but the effective date of commencement of the wage revision under the agreement and it was held that the liability for wage increase really accrued for the assessee would be the effective date. In the instant case, on the advise given by the Consultant, the assessee estimated the liability, which became payable with retrospective effect, i.e., from April 1998. - Decided in favour of assessee Levy of interest under section 234D of the Act, the assessee does not dispute the fact that the decision in the case of Infrastructure Development Finance Company Ltd.[2011 (9) TMI 591 - MADRAS HIGH COURT] has answered the question in favour of the Revenue and against the assessee. - T.C.A. No.958 of 2008 - - - Dated:- 28-8-2018 - Mr. T. S. Sivagnanam And Mrs. V. Bhavani Subbaroyan JJ. For the Appellant : Mr.Karthik Ranganathan Senior Standing Counsel For the Respondent : Mr.Vijayaraghavan for M/s.Subbaraya Aiyar Padmanaban JUDGMENT T.S.SIVAGNANAM, J. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... / calculation was undertaken by M/s.SAM Consultancy from 14.10.1998. 5. The Wage Board vide notification dated 21.12.1999 submitted a tentative proposal to the Government in which it was mentioned that the arrears were to be paid for the period covered during the Assessment Year 1999-2000 onwards. This tentative proposal was notified in the Government Gazette dated 30.12.1999 and an opportunity was afforded to newspapers to make their comments as they may think fit. On 31.03.2000, when the assessee filed the return of income, they estimated the liability at ₹ 12 Crores based on the recommendations of the Consultant appointed by the Indian Newspapers Society. The final findings of the Wage Board was rendered on 25.07.2000 and the total amount payable towards the revised wages was ₹ 13.56 Crores. 6. On 30.11.2000, the appellant filed original return of income based on the estimate and claimed ₹ 12 Crores as deduction in the Profit and Loss Account for the Assessment Year 2000-01, of which ₹ 4 crores was claimed for the Assessment Year 1999-2000 and ₹ 8 crores was claimed for the Assessment Year 2000-2001. After the Central Government accepted the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claimed could have been made only in the year in which the expenditure had incurred. 11. On the third substantial question of law is concerned, learned Senior Standing Counsel submitted that the issue has been decided in favour of the Revenue in the decision of Commissioner of Income Tax Vs. Infrastructure Development Finance Company Ltd., (2012) 21 taxmann.com 48 (Madras) . 12. Mr. Vijayaragavan, learned counsel for the respondent/assessee, while seeking to sustain the impugned order, has drawn the attention of this Court to the notification issued by the Central Government in Board's Notification No.S.O.69(E) dated 25.01.1996 with regard to the Accounting Standard I relating to disclosure of accounting policies, wherein, it is stated that the provisions should be made for all known liabilities and losses even though the amount cannot be determined with certainity and represents only a best estimate in the light of the available information. Therefore, it is submitted that the provision has been made based on an estimation, which was with certainity in the light of the recommendations of the Wage Board. Reliance was placed on the decision in the case of CIT Vs. Bharat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITAT on this aspect . 15. The above decision is a clear answer to the contentions advanced before us by the Revenue. The learned counsel for the Revenue sought to place reliance on section 43B(b) of the Act to say that any sum payable by the assessee as an employer by way of contribution to any Provident Fund or Superannuation Fund, Gratuity Fund or any other Fund for the welfare of the employees is not allowable as deduction. As pointed out by us earlier, in Hindusthan Times (cited supra), the very same Wage Board award was considered and the Court held that having regard to the facts of the case, the Tribunal was justified in holding that the liability arising out of the Monesana Wage Board were justifiably deductable as expenditure and not covered under section 43B of the Act. 16. Thus, the very same award having been interpreted by the Court and having held that it is not covered under section 43B, in the absence of any material placed before us to distinguish the said decision, on facts, we are not inclined to accept the stand taken by the Revenue. Useful reference can be made to the decision in the case of Bharat Heavy Electrical Limited (cited supra), wherein ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evenue to claim refund. In this case, the assessment was completed only on March 30, 2004, the date on which the order of assessment came to be passed. But, the amended provision of section 234D came into force with effect from June 1, 2003. When once the regular assessment is completed after the amended provision of law came into operation, we have no hesitation to hold that the assessee is liable to pay interest on the refunded amount, as contemplated under section 234D. It is not the year of assessment that falls for consideration in such circumstances, but the date on which the regular assessment order has been passed. In the case on hand, though the assessment year is 2001-02, the regular assessment was made on March 30, 2004, by which time, the amended provision of law, having into operation on and from June 1, 2003, is in force. Therefore, the order passed by the Assessing Officer, levying interest on the amount of refund, is well within the parameters of law and the contra orders passed by the Commissioner of Income-tax (Appeals) and the Income-tax Appellate Tribunal, to the effect of ignoring this principle of law, are illegal and they are accordingly set aside . ..... X X X X Extracts X X X X X X X X Extracts X X X X
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