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TMI Blog2011 (1) TMI 127X X X X Extracts X X X X X X X X Extracts X X X X ..... r not. We are of the opinion that this is a debatable issue which could not be undertaken in the proceedings under section 154. This is a debatable issue which could not be undertaken in the proceedings under section 154 Accordingly ground No. 1 of the assessee is allowed - Addition to be deleted. Regarding deletion of levy of interest under sections 234B, 234C & 234D - as the entire income was subjected to TDS assessee was not eligible to pay advance tax - the issue is in favour of the assessee by the judgment of the Hon’ble Bombay High Court in the case of M/s. NGC Network Asia LLC (2009 -TMI - 33839 - BOMBAY HIGH COURT) - Decided in favor of assessee - deletion of interest upheld. X X X X Extracts X X X X X X X X Extracts X X X X ..... siduary articles or provisions. Relying of the principles laid down by the above said judgment it is his argument that once the provisions of section 44BB are invoked and gross receipts are taxed there is no need for invoking the provisions of section 43B. He also relied on the judgment of the Hon'ble Madras High Court in the case of S. Mohammad Dhurabudeen 4 DTR (Madras) 218 wherein on disallowance of section 40A(3) the Hon'ble High Court held that the disallowance is not warranted. The learned counsel also submitted that the question of disallowance under section 43B arises only if there is a claim for deduction and as assessee is not entitled for any deduction under section 43BB the question of disallowance does not arise. It was his submission that the A.O. was wrong in invoking the provisions of section 44BB on the issue which is not a mistake apparent from record. 6. The learned D.R. submitted that provisions of section 44BB exclude application of provisions from sections 28 to 43A and accordingly provisions of section 43B are not excluded. Consequently the A.O. was correct in disallowing the amount under section 43B. He distinguished the judgement of the Hon'ble Madras High ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 44AA and gets his accounts audited and furnishes a report of such audit as required under section 44AB, and thereupon the Assessing Officer shall proceed to make an assessment of the total income or loss of the assessee under sub-section (3) of section 143 and determine the sum payable by, or refundable to, the assessee.] Explanation.--For the purposes of this section,-- (i) "plant" includes ships, aircraft, vehicles, drilling units, scientific apparatus and equipment, used for the purposes of the said business; (ii) "mineral oil" includes petroleum and natural gas.]" 8. Invoking the above provisions, the A.O. vide his assessment order dated 29.12.2008 determined the income at Rs. 30,86,12,920/- as against the loss claimed at Rs. 16,19,54,339/-. During the assessment proceedings the assessee moved an application under section 144A to the Additional Director of Income Tax (International Taxation), Range I, Mumbai and his directions were received vide letters dated 19.12.2008 and 26.12.2008. Thereafter the A.O. concluded the assessment vide order dated 29.12.2008 after elaborately discussing why the provisions of section 44BB are applicable and the gross receipts are t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turn. Explanation 1--For the removal of doubts, it is hereby declared that where a deduction in respect of any sum referred to in clause (a) or clause (b) of this section is allowed in computing the income referred to in section 28 of the previous year (being a previous year relevant to the assessment year commencing on the 1st day of April, 1983, or any earlier assessment year) in which the liability to pay such sum was incurred by the assessee, the assessee shall not be entitled to any deduction under this section in respect of such sum in computing the income of the previous year in which the sum is actually paid by him. Explanation 2--For the purposes of clause (a), as in force at all material times, "any sum payable" means a sum for which the assessee incurred liability in the previous year even though such sum might not have been payable within that year under the relevant law. Explanation 3 --For the removal of doubts it is hereby declared that where a deduction in respect of any sum referred to in clause (c) [or clause (d)] of this section is allowed in computing the income referred to in section 28 of the previous year (being a previous year relevant to the assessment y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 4A of the Companies Act, 1956 (1 of 1956); (aa) "scheduled bank" shall have the meaning assigned to it in the Explanation to clause (in) of sub-section (5) of section 11; (b) "State financial corporation" means a financial corporation established under section 3 or section 3A or an institution notified under section 46 of the State Financial Corporations Act, 1951 (63 of 1951); (c) "State industrial investment corporation" means a Government company within the meaning of section 617 of the Companies Act, 1956 (1 of 1956), engaged in the business of providing long-term finance for industrial projects and [eligible for deduction under clause (viii) of sub-section (1) of section 36].]" 9. Before invoking the provisions, a deduction otherwise allowable under this Act is necessary for considering the disallowance under section 43B. As rightly submitted by the learned counsel, since assessee's claims are not considered either under section 37(1) or under section 28 or any of the provisions in determining the profits from the head 'Business or Profession', no amount which is not allowed while computing the income, can be considered for deduction under section 43B. Since the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... debatable issue which could not be undertaken in the proceedings under section 154. Accordingly ground No. 1 of the assessee is allowed. A.O. is directed to delete the disallowance so made. 11. Ground No. 2 is consequential in nature on levy of interest under section 220(2) and ground No. 3 becomes academic in nature as it is about merits of additions so made under section 143(3) which does not arise out of the order under section 154. Accordingly ground No. 1 is considered allowed and ground Nos. 2 & 3 are considered infructuous. Appeal is partly allowed. 12. The issue in Revenue's appeal is with reference to the deletion of levy of interest under sections 234B, 234C & 234D. The A.O., while passing the order under section 154, levied interest under sections 234B, 234C & 234D on the disallowance made and charged an amount of Rs. 3,31,82,773/- and Rs. 43,12,099/- under sections 234B and 220(2) respectively. The CIT(A) deleted the addition stating as under: - "6.2 I have considered submissions. Interest u/s 234B is chargeable provided the assessee, who is liable to pay advanced tax u/s 208, has failed to pay such tax. The appellant is a non-resident hence its income was subjected ..... X X X X Extracts X X X X X X X X Extracts X X X X
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