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TMI Blog2012 (2) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... nt Year 2000-01. 2. The Assessing Officer had imposed penalty under the said section on three accounts:- (i) Rs. 1,31,58,290/- on account of disallowance of expenses claimed respect of payment made to AT&T, Singapore; (ii) Rs.33,333/- being disallowance of expenses paid to the Registrar of Companies (ROC); and (iii) Rs.3,98,36,108/- being amount received from Birla AT&T. 3. At the outset, we may note that the third addition has been set aside for fresh adjudication by the Tribunal in the quantum appeal. The Revenue, therefore, has not raised this issue in the present appeal. The question therefore is whether the Tribunal was justified in deleting the penalty under Section 271(1)(c) of the Act in respe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... do not think that it will be appropriate to admit the present appeal on the said issue. 6. Rs. 1,31,58,290/- was disallowed under Section 40(a)(i). It is relevant to refer to certain facts and the explanation given by the assessee, which has been accepted. The aforesaid payment was for services rendered by AT&T Singapore. There is no dispute that the payment has been made and TDS on the said amount was paid to the Government on 23rd November, 2001 i.e. after the end of the previous year relevant to the assessment year 31st March, 2001. The respondent/assessee had received a bill from AT&T Singapore on 23rd November, 2001. Quantum and genuineness of the expenditure is not disputed. 7. The Tribunal in the quantum proceedings had exam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eration in terms of the agreement which was very much in force but even the quantification thereof was possible with reasonable certainty in that year. In our opinion, the said liability thus had crystallized during the year under consideration itself irrespective of the fact that the relevant bill was raised by AT&T Services in the month of November, 2001." (emphasis supplied) 8. Thereafter, the Tribunal examined the provisions of Section 40(a)(i) and referred to the decision relied upon by the respondent-assessee in CIT vs. Nestle India Ltd. (2005) 275 ITR 1 (Del) and decision dated 9th May, 2007 in ITA No. 641/2006 titled Oracle Software India Ltd. vs. CIT. However, it was held that the tax had been deposited only in November, 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t day of April, 1938), royalty, fees for technical services or other sum chargeable under this Act, which is payable outside India, on which tax has not been paid or deducted under Chapter XVII-B: Provided that where in respect of any such sum, tax has been paid or deducted under Chapter XVII-B in any subsequent year, such sum shall be allowed as a deduction in computing the income of the previous year in which such tax has been paid or deducted. Explanation.-For the purposes of this sub-clause,- (A) "royalty" shall have the same meaning as in Explanation 2 to clause (vi) of sub-section (1) of Section 9; (B) "fees for technical services" shall have the same meaning as in Explanation 2 to clause (vii) of sub-section (1) of Section 9;" The s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -section (1) of Section 9; (B) "fees for technical services" shall have the same meaning as in Explanation 2 to clause (vii) of sub-section (1) of Section 9;" 11. It is possible to submit that the amendment which came in 2004 was clarificatory in nature, but this is different from stating and holding that the assessee could not have raised the said plea or argued that the disallowance under the pre amended Section 40(a)(i) was not justified or mandatory. We may also note that in the present case TDS has been deducted and paid. The payment was made in the next assessment year. The question was whether the respondent-assessee can claim deduction of the amount paid to AT&T Singapore in the assessment year 2001-02 or in the assessment y ..... X X X X Extracts X X X X X X X X Extracts X X X X
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