9911796707
TMI Blog2011 (5) TMI 1081X X X X Extracts X X X X X X X X Extracts X X X X ..... ties. However, since assessee did not file any evidence, he disallowed the amount of ₹ 13,03,74,047/- u/s 43B of the Act. 3. On appeal, it was submitted that the statutory dues payable on 31.3.2006 at ₹ 13,03,74,047 were paid before furnishing/filing of income-tax return for assessment year 2006-07. The amount as well as subsequent dates of deposits of these payments have been verified and certified by the tax auditors. The CIT(A) deleted the addition on the ground that AO was required to allow the deduction u/s 43B on the basis of verification and certification of tax auditors as filed in form 3CD along with the return of income. 4. Before us, Ld. CIT(DR) supported the order of the AO. On the other hand, Ld. AR of the assessee relied on the order of the CIT(A). 5. We have heard both the parties. The assessee is a multi state cooperative Society having its sales office spread all over India and its accounts are decentralized. The tax audit report in form 3CD is compiled on the basis of tax audit reports received from various branch auditors in form 3CD. On identical issue, for assessment year 2004-05, the AO disallowed the payment u/s 43B, but the same was allo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e expenditure u/s 37 of the Act. However, the assessing officer examined the provisions of section 63 of Multi State Coop. Society Act. As per the provision of this section a Multi State Coop. Society shall out of its net profit in any year: (a) transfer an amount not less than 25% to reserve fund; (b) credit 1% to Coop. Education Fund, maintained by the National Coop. Union of India Ltd., New Delhi, in the manner as may be prescribed; and (c) transfer of amount not less than 10% to a reserve fund for meeting unforeseen losses. 7. The AO also examined Rule 25 of Multi State Coop. Society Rules, 2002, according to which 1% of its net profit shall be credited as contribution to Coop. Education Fund and maintained by National Coop. Union of India Ltd., New Delhi. The Coop. Education Fund shall be administered by a Committee constituted by the Central Govt. for this purpose. The AO, therefore, observed that Rule 25, provides as to how the Coop. Education Fund is to be administered. But, these provisions do not make the claim of assessee allowable u/s 37 of the Act. The provisions of section 63 read with Rule 25 of the Multi State Coop. Societies Rules clearly state that 1% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me has been claimed. Ld. AR of the assessee has further submitted that in earlier years, similar claims have been allowed. For the first time, the AO has treated the expenditure as appropriation of income. On the principle of consistency, the contribution to Coop. Education Fund has to be allowed. 10. We have heard both the parties. There is no dispute that in earlier years identical claim of the assessee has been allowed. For assessment years 1991-92 and 92-93, the issue of allowability of contribution to Coop. Education Fund, traveled up to Hon ble Delhi High Court. Hon ble Delhi High Court in their order dated 14.12.04 held as under: According to the assessee, this contribution is not a cess, tax, duty or fee and therefore, section 43B would not be applicable. However, before the Tribunal, the question has not been specifically raised by the revenue or by the assessee. It was submitted that in terms of section 37, the amount of contribution to the said fund is an allowable deduction. The issue is that if section 43B is applicable then it will be allowed on actual payment basis only. If not, then it may be allowed on accrual basis. The key question is whether the contribut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it, what is decided in one year may not apply in the following year, but where fundamental aspect permeating through the different assessment year has been found as a fact one way or other and parties have allowed, that position to be sustained by not challenging the order, it would not be appropriate to allow the position to be changed in a subsequent year. In the case before us, the AO had allowed the claim of the assessee for last several years. For assessment year 2006-07 is the fist year where Revenue has disallowed the amount on the ground that it is appropriation of income and not business expenditure incurred wholly and exclusively for the purpose of business. Since the AO has allowed deduction in respect of Coop. Education Fund in earlier years, respectfully following the decision of Hon ble Supreme Court in the case Radhasoami Satsang(supra), it is held that Revenue is not permitted to take a different stand in the year under consideration. Accordingly, we do not find any infirmity in the order of the CIT(A) deleting the addition. 14. In the result, the grounds raised in this appeal by the Revenue are dismissed. I.T.A. No.3350/Del./2009 15. The first issue for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the assessee that disallowance to the extent of ₹ 1,82,00,000/- could be made subject to verification by the AO while giving the appeal effect. 18. Before us, Ld. CIT(DR) supported the order of AO. However Ld. AR of the assessee submitted that the assessee has no objection to the extent of disallowance made under Rule 8D of the Act. 19. We have heard both the parties and have gone through the material available on record. We find that Hon ble Bombay High Court in the case of Godrej Boyace Mfg. Co. ltd. vs. DCIT 234 CTR 01, has held that provisions of Rule 8D of the I.T. Rules are prospective in nature and will be applicable from assessment year 2008-09. It has also been held that disallowance to the extent incurred for earning the exempt income can be disallowed. In the instant case, the assessee itself has given the disallowance as per Rule 8D at ₹ 1,82,00,000/-. Since the assessee has not filed appeal against the order passed by the CIT(A), the order passed by the CIT(A), qua the assessee becomes final. Since the disallowance has been restricted by the CIT(A) as per Rule 8D, we do not find any infirmity in the order passed by the CIT(A). restricting the disall ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
