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TMI Blog2015 (9) TMI 1165X X X X Extracts X X X X X X X X Extracts X X X X ..... t from record, liable to be rectified u/s. 154. This, quite simply, is the only issue relevant and, in any case, represents the core of the matter; the various aspects discussed being only to address the various arguments/contentions raised, and which again clarify an undisputed state of affairs, both on facts and in law. The deduction, therefore, could only be claimed in the year of payment. As clarified in Mysore Spg. & Mfg. Co. Ltd. v. CIT [1966 (2) TMI 82 - BOMBAY HIGH COURT], we may further add, it is not necessary that the particular business, to which the deduction (in computing its business income) relates, is carried out by the assessee during the relevant year. We decide accordingly. - Decided against assessee. - IT APPEAL NO. 5584 (MUM.) OF 2013 - - - Dated:- 26-6-2015 - SANJAY ARORA AND SANJAY GARG, JJ. For The Appellant : M.C. Naniwadekar For The Respondent : Premanand J. ORDER Sanjay Arora, Accountant Member This is an Appeal by the Assessee directed against the Order by the Commissioner of Income Tax (Appeals)-13, Mumbai ('CIT(A)' for short) dated 22.05.2013, partly allowing the assessee's appeal contesting the rectification of its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (AO) being thus confirmed, the assessee is in second appeal. 4. Like contentions were raised before us. The assessment order u/s. 143(3) had been passed after considering all the details and information, so that it was a case of change of opinion, impermissible u/s. 154. The transfer of liabilities, along with assets, on the sale of the Undertaking on 'as is where is basis', as a going concern, would amount to an effective discharge of the relevant liability as far as the assessee is concerned. Even if another view of the matter is possible, the same lends a debatable character to the assessee's claim, taking it outside the ambit of section 154. As regards the claim qua leave salary, covered u/s. 43B(f), the hon'ble Calcutta High Court has in Exide Industries Ltd. v. Union of India [2007] 292 ITR 470 struck down section 43B(f) as unconstitutional. Though appeal there-against has since been admitted, and its operation stayed, by the Apex Court, an appeal on the issue has also been admitted by the hon'ble jurisdictional High Court. The Mumbai Benches of the tribunal have in this view of the matter been restoring the issue of the allowability of deduction qua le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the mandate of section 43B, which would only be upon payment to the concerned employees. Keeping aside moneys for payment would not, after all, amount to an actual payment. The section, which a non obstante provision, provides a condition (of payment) for the deduction of the liabilities specified therein, so that the deduction is deferred to the year of payment. The only exception is the year in which the liability accrues or arises, for which the time for payment gets extended to the due date for furnishing the return of income for that year. The liabilities under reference pertain to a year prior to the current year, so that the payment date, for the allowability of deduction in their respect, must fall within the relevant previous year, i.e., f.y. 2003-04. The payment would, again, even as emphasized by the ld. CIT(A), imply payment to the concerned employees, and there is no concept of deemed payment. This in fact is the crux of the matter, and represents the fundamental fallacy in the assessee's argument. There is nothing on record to show that the payment qua the impugned liabilities stands made to the concerned employees, much less during the year, which alone is re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der in Pembril India Industrial Engg. Co. (P.) Ltd. dated 26.03.2014 (PB pages 22-25), wherein a similar action u/s. 154 by the Revenue was struck down by the first appellate authority. The basis of the said decision is that it was not clear if the liability/s under reference had been claimed or allowed in the hands of the transferee. It was not even clear as to in whose hands the liability/s is to be allowed. In the facts of the present case, there is, as aforesaid, no transfer of liability/s, which is abundantly clarified to be of the assessee-company, besides its transfer being impermissible in law. The liability is of the assessee-company, in whose books alone it stands debited and claimed as expenditure, so that the only condition for deduction, in view of section 43B, is of its payment, and which has not been shown to be, by either party. There is therefore no question of the said decision as being applicable in the facts of the case. The same, even otherwise, does not appear to be the correct view. This is as the liability, even where assumed by the transferee, would be on capital account, as part of the purchase consideration of the undertaking. Where, then, is the questi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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