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TMI Blog1986 (8) TMI 137X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 25,298. Since the said liability was not paid during this year, the ITO disallowed the same under section 43B of the Income-tax Act, 1961 ('the Act'). On appeal, the Commissioner (Appeals) held that it is a fee but not tax and so section 43B cannot be applied. The payment of fee can be on mercantile basis. Thus, he deleted the disallowance of Rs. 25,298. Against the same the revenue has prefer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Commissioner, Hindu Religious Endowments v. Sri Lakshmindra Thirtha Swamiar of Shri Shirur Mutt AIR 1954 SC 282, the Supreme Court held that the levy of tax is for the purpose of general revenue and there is no element of quid pro quo between the taxpayer and the public authority whereas a fee is generally defined to be a charge for a special service rendered to individuals by some, governmental ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... td. v. State of Orissa AIR 1961 SC 459, the Supreme Court held that if specific services are rendered to a specific area or to a specific class of persons or trade or business in any local area, and as a condition precedent for the said services or in return for them cess is levied against the said area or the said class of persons or trade or business the cess is distinguishable from a tax and is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h (Agricultural Produce and Livestock) Markets Act, 1966. It was held therein that the distinction between a tax and a fee lies primarily in the fact that a tax is levied as part of a common burden while a fee is for payment of a specific benefit or privilege. In regard to fees there is, and always be, correlation between the fee collected and the service intended to be rendered. 4. The ratio lai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... already referred to that decision. The distinction between tax and fee has been clearly brought out in the above cases. In the instant case what is levied is fee but not tax. Hence, section 43B cannot be applied, Hence, the disallowance made of Rs. 25,298 under section 43B is not justified. The Commissioner (Appeals) was right in deleting the sum of Rs. 25,298. We uphold his order. 5. In the res ..... X X X X Extracts X X X X X X X X Extracts X X X X
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