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TMI Blog2013 (1) TMI 208X X X X Extracts X X X X X X X X Extracts X X X X ..... dition was not on account of disallowance of any expenditure but on account of infringement of law - Held that:- It is settled principle that the deeming fiction created under any provisions of the Act cannot be imported into a beneficial provisions of the Act. In this case, the addition made on account of disallowance of expenditure is due to the deeming fiction created by the penal section 40(a)(ia) thus, the effect of the same cannot be imported into a beneficial provision of section 80-IB(10) As decided in Executors & Trustees of Sir Cawasji Jehangir v. CIT [1958 (9) TMI 58 - BOMBAY HIGH COURT] unless it is clearly and expressly provided, it is not permissible to impose a supposition on a supposition of law. It is not permissible to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 06 declaring total income of Rs.8,86,240/-. Subsequently, the case was selected for scrutiny assessment and the assessment u/s 143(3) was completed on 26-12-2008 wherein the learned AO did not grant the assessee deduction u/s 80-IB(10) of the Act amounting to Rs.50,86,734/- and also invoking the provisions of section 40 (a)(ia) of the Act made addition of Rs.1,20,895/- against which the assessee went on appeal. Learned CIT(A) allowed the appeal of the assessee and now the Revenue is in appeal before us. 4. Ground No.1: Deduction u/s 80-IB (10) of the Act for Rs.50,86,734/-:- The learned AO determined the area of four shops of 78 sq. meters each aggregating to 312 sq. meters and calculated the total area to be 8.50% used for commercial pur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... without appreciating the fact that the addition was not on account of disallowance of any expenditure but on account of infringement of law:- It was observed by the learned AO that the assessee had deducted tax at source but deposited the same into government account after the due date for payment thereby attracting provisions of section 40(a)(ia) of the Act. Accordingly the learned AO made an addition of Rs.1,20,895/-. However, the learned CIT(A) deleted the addition and held as follows: "3.3 From the above submissions it is clear that the appellant agreed to the fact that he has not paid TDS within the prescribed time limit and therefore comes under the provisions of section 40(a)(ia). However, there is merit in the submissions that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion u/s 80-IB(10) of the Act. Section 80-IB(10) of the Act has to be applied only for the definite and limited purpose for which it is created. In the case of Executors Trustees of Sir Cawasji Jehangir v. CIT [1959] 35 ITR 537 (Bom), it has been explained that unless it is clearly and expressly provided, it is not permissible to impose a supposition on a supposition of law. It is not permissible to sub-join or track a fiction upon fiction. In the light of the above, it is apparent that as far as arriving at the deduction u/s 80 IB of the Act is concern one has to strictly follow the provisions of that section and compute the deduction accordingly without infusing any other provision of the Act which creates a legal fiction. 10. Keeping ..... X X X X Extracts X X X X X X X X Extracts X X X X
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