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TMI Blog2014 (1) TMI 242X X X X Extracts X X X X X X X X Extracts X X X X ..... - There is nothing to restrict the word 'payable' to the sum outstanding as at the year-end, so that the provision would stand to be attracted where the principal sum was payable at any time during the year - Decided against assessee. - I.T.A. No. 6449/Mum/2011, C.O. No. 157/Mum/2012 - - - Dated:- 3-1-2014 - Shri B. R. Mittal, JM And Shri Sanjay Arora, AM,JJ. For the Petitioner : Shri Sanjeev Jain For the Respondent : Shri C. N. Vaze ORDER Per Sanjay Arora, A. M. This is an Appeal by the Revenue and the Cross Objection (C.O.) by the Assessee, arising out of the Order by the Commissioner of Income Tax (Appeals)-33, Mumbai ('CIT(A)' for short) dated 07.07.2011, partly allowing the assessee's appeal contesting its assessment u/s.143(3) of the Income Tax Act, 1961 ('the Act' hereinafter) dated 29.12.2010 for the assessment year (A.Y.) 2008-09. 2.1 It would be relevant, before we proceed to take up the issues raised by the rival parties, to recount the background facts of the case. The assessee, an individual, in the business of civil construction, under the trade name 'M/s. Raviraj Engineering Construction', filed his return of income for the year on 15. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ffected on the basis of and in view of the revised figures, filed suo motu by the assessee, could yet only be in respect of the comparable figures. Accordingly, only the increase in the amount of the opening capital as per the two sets of accounts, i.e., Rs.27,00,172/- (Rs.41,12,069 - Rs.14,11,897) was held by him as valid. With regard to the profit estimation, again, the assessee found favour with him. The assessee had admitted to the unexplained addition to its capital account. However, apart there-from, there was no basis for any further enhancement to the disclosed income. The addition on account of profit estimation was, accordingly, deleted. Aggrieved, the Revenue is in appeal, with the assessee, making a claim in respect of disallowance u/s.40(a)(ia) with reference to the decision in the case of Merilyn Shipping Transports vs. Addl. CIT [2012] 136 ITD 23 (Vishk) (SB) [also 16 ITR (Trib) 1], per his C.O. 3. We have heard the parties, and perused the material on record and the case law cited. 3.1 The addition of Rs.2,38,47,906/- by the A.O. i.e., the difference between the total of the assets per the revised balance-sheet (as at 31/3/2008) and the opening capital as on 0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng anything to the contrary in sections 30 to 38, the following amounts shall not be deducted in computing the income chargeable under the head "Profits and gains of business or profession",-- (a) in the case of any assessee-- (i) ........ (ia) any interest, commission or brokerage, rent, royalty, fees for professional services or fees for technical services payable to a resident, or amounts payable to a contractor or sub-contractor, being resident, for carrying out any work (including supply of labour for carrying out any work), on which tax is deductible at source under Chapter XVII-B and such tax has not been deducted or, after deduction, has not been paid,-- (A) in a case where the tax was deductible and was so deducted during the last month of the previous year, on or before the due date specified in sub-section (1) of section 139; or (B) in any other case, on or before the last day of the previous year: Provided that where in respect of any such sum, tax has been deducted in any subsequent year, or has been deducted (A) during the last month of the previous year but paid after the said due date; or (B) during any other month of the previous year but paid afte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... during the year. The same, it may be appreciated, would only be on the amount becoming 'payable' at any time during the year. There is, as such, no basis to suggest of the amount, since paid, though subject to tax deduction at source, and which has admittedly not been deducted, for being excluded from the ambit of the provision, which is unambiguously worded. A payment would, in fact, not impact either the deductibility of the tax at source in its respect, which we have explained to be the starting point for the invocation of section, or the deduction of the amount (i.e., on which tax becomes deductible) in computing the business income u/s.28, and toward which the disallowance u/s.40(a)(ia) would apply. This is as it is only the amount payable that is relevant. We say so as where an amount is paid without it being payable, the same would only be in the nature of an advance. Accordingly, the same would not be admissible for deduction in the first place. The question of applicability or otherwise of section 40(a)(ia) would therefore not arise, which is applicable only to sums otherwise deductible. This would also at once clarify the use of the word 'payable' in the provision as a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng so, it supplied casus omissus, which was not permissible, adverting to the decision in the case of Bhuwalka Steel Industries vs. Bombay Iron Steel Labour Board [2010] 2 SCC 273. In the said case, as in the instant case, it was the language of the Act, as opposed to that of the Bill that was relevant, and is to be interpreted. That is, the language of the provision, as finally enacted, is unambiguously clear, so that the intention of the Legislature has to be gathered there-from. The hon'ble court in fact also compared the pre-amended and post-amended law with a view to ascertaining the mischief sought to the rectified or the object sought to be achieved by the amendment, discounting the argument that two reasonable views were possible, so that one favour to the assessee ought to be adopted. In fact, the provision, as interpreted by the tribunal, would make it otiose. That a provision may operate to be harsh, as it indeed was, was no reason to strike down or read down the provision, which is to be interpreted in terms of the intention and the will of the Legislature. The same view stands expressed by the hon'ble Gujarat high court in Tunvar's case (supra), emphasizing on the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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