9911796707
TMI Blog2020 (4) TMI 841X X X X Extracts X X X X X X X X Extracts X X X X ..... usal of records shows that the assessee had filed ROI for assessment year 2009-10 in the office of ITO, Ward 19(2), New Delhi; wherein claim for long term capital loss to be carry forward has been made. Therefore, the basis on which the assessee s claim for brought forward capital loss had been rejected by the Assessing Officer is incorrect. Further, if the date of filing of ROI is not clearly visible in the stamp; it is not the fault of the assessee. The assessee does not bring its own acknowledgement stamp to be fixed on ROI; and the assessee does not himself fix the stamp. It is a stamp of Income Tax Department, and the stamp is fixed by officials of Income Tax Department. If the date of acknowledgement is not clearly visible in the ROI; it is the mistake of Revenue officials. Even when the date of receipt of ROI in Income Tax Department is not clearly visible in the acknowledgement; it is easy for Revenue officials to ascertain date of receipt from reference to records of Income Tax Department. We record our displeasure that no effort was made during appellate proceedings before Ld. CIT(A) to ascertain this date. -direct AO to allow the assessee s claim for long term capital ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is entitled to benefit under 3rd proviso to Section 50C(1) - HELD THAT:- In the case before us the value as per Stamp Valuation Authority is more than 105 percent of the sale consideration as per sale deed . For the purposes of third proviso to S. 50C(1) of I.T.Act; the valuation of the property by DVO has no relevance; and what is material is the valuation by Stamp Valuation Authority. When the value as per Stamp Valuation Authority is more than 105 percent of sale consideration as per sale deed; the assessee is not eligible for benefit under third proviso to S. 50C(1) of I.T.Act, even when valuation by DVO is less than 105 percent of sale consideration as per sale deed - we decline to interfere with impugned order of the Ld. CIT(A) on this issue. - SHRI AMIT SHUKLA, JUDICIAL MEMBER AND SHRI ANADEE NATH MISSHRA, ACCOUNTANT MEMBER Assessee by: Sh. C.S. Anand, C.A. Revenue by: Ms. Rakhi Vimal, Sr. DR ORDER PER ANADEE NATH MISSHRA, A.M.: (A) This appeal filed by the assessee is against impugned appellate order dated 04.07.2016 passed by the Ld. CIT (Appeals)-12, New Delhi for assessment year 2010-11. Following grounds of appeal have been raised : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from House Property (v) addition of ₹ 4,60,000/- u/s 69 of Income Tax Act addition of ₹ 34,00,000/- u/s 50C of Income Tax Act. (B.1) Relevant portion of the assessment order is reproduced as under for the ease of reference: 2. Further, it is seen that the assessee has not shown rental income the following three properties: l. Shop No. 4, Kamla Nagar 2, Shop No. 5, Kamla Nagar 3. T-14/301, LA Tropicma, Mall Road, Delhi The assessee was specifically asked to show cause as to why the notional rent is not added to his income in respect of the properties owned by assessee which will be considered deemed to be let out. The assessee submitted that the Property mentioned at S.NO. 3 above i.e. T-14/301, LA Tropicana. Mall Road, Delhi is under construction and has not yet get the possession of the property. The issue raised above was discussed with the assessee in detail. As regards to the Property No. T-14/301, LA Tropicana, Mall Road, Delhi, this property being under Construction and not under possession of the assessee, hence is outside the purview of the property owned by assessee which will be considered deemed to be let cut. As regards to the Pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1,000/-. Hence, an amount of ₹ 49,000/- is added back to the total income of the assessee under the head 'Income from House Property'. Since the assessee has furnished inaccurate particulars of his income resulting escapement of Income, penalty proceedings u/s 271(1)(c) are to be initiated separately (Addition ₹ 49,000/-) 3. During the course of assessment proceedings, it was seen that the assessee had taken loans from various persons. In this regard, vide order sheet entry dated 04.12.2012, the assessee was asked to furnish Details of loans given arid taken, alongwith confirmations . Vide the same order sheet entry. The assessee was also asked to provide details of firms/Companies/HUFs, in which the assessee is partner/director, karta or member alongwith ITR of the entity, it computation of income, Balance Sheet, P L A/c and copy of capital account of the assessee in the entity. The assessee vide letter dated 30.01.2013 submitted the details of loans giver/taken during the year in the form of ledger accounts of the parties in his books of accounts. No confirmations were submitted despite repealed reminders vide order sheet entries dated 28.01.2013 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shares entitled to a fixed rate of dividend whether with or without a right to participate in profits) holding not less than ten per cent of voting power, or to any concern in which such shareholder is a member or a partner and in which he has a substantial interest or any payment by any such company on behalf, or for the individual benefit, of any such shareholder, to the extent to which the company in either case possesses accumulated profits. In view of the above discussions, amount of and ₹ 50,000/-and ₹ 18,42,000/- are treated as deemed dividend u/s 2(22)(e) in the hands of the assessee. Since the assessee has furnished inaccurate particulars of his income resulting escapement of Income, penalty proceedings u/s 271(1)(c) are to be initiated separately. 4. Vide letter dated 30.01.2013, the assessee submitted the details of loans given/taken during the year in the form of ledger accounts of the parties in his books. On perusal of the ledger accounts, it was found that the assessee had taken loans to the tune of ₹ 1,60,000/- and ₹ 3,00,000/- from his minor children i.e. Ms Khushi Mittal and Master Sidharth Mittil. Vide notice u/s 142(1) dated 12.02. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The above details clearly shows that the asseseee has routed his own money and shown it as loans from his children. The assessee has failed to prove the creditworthiness of his children, especially due to the fact his minor children do not have any independent source of income. Also, as per section 69 of the Income Tax Act wherein the financial year immediately preceding the assessment year the assessee has made investments which are not recorded in the books of account, if any maintained by him for any source of income, and the assessee offer an explanation, which in the opinion of the assessing officer not satisfactory, the value of the investments may be deemed to be the income of the assessee of such financial year. Thus, from this section, it is found that as the creditworthiness of the assessee's children can not be established, u/s 69, the amount of ₹ 1,60,000/- and ₹ 3,00,000/- will be deemed to be income of the minors for A.Y.2010-11. Also, as per Section 64 (1A) - In computing the total income of any individual, there shall be included all such income as arises or accrues to his minor child. Thus, the income of ₹ 1,60,000/- and ₹ 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that Assessee had not shown rental income from 3 progenies mainly at Shop No. 4, Kamla Nagar, Shop No. 5, Kamla Nagar and Property at La Tropizana. Assessee submitted that he had got possession of the property at La Tropicana, however, Assessing Officer determined the annual value in respect of property at Shop No. 4, Kamla Nagar and Shop No. 5 at Kamla Nagar at ₹ 35,000/- each on the basis of annual value determined by Municipal Corporation of Delhi (MCD). Appellant has submitted that he had taken these 2 properties from the lessee and, therefore, he was not the owner of this property and he had also not got possession of this property and, therefore, there was no basis to determine the annual value from this property. Appellant has submitted a lease deed dated 07.01.1993 between Sh. Naresh Mohar Mittal, s/o Sh. Satya Prakash Mittal and Sh. Manoj Mittal, the Appellant. In this, it is mentioned that executant Sh. Naresh Mohan Mittal is lessee of Sh. Kanshi Ram, Smt. Saroop Devi, Sh. Vijender and Sh. Sujan Singh who had taken the lease from the said 4 parties vide lease deed dated 09.01.1989. It is also seen that Sh. Naresh Mohan Mittal is also the attorney helder of the les ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . During the course of appellate proceedings, Appellant has not submitted anything in support of his ground that the advances were made in the regular course of business. Further, it is seen that current profits are to be included in accumulated profit tor the purpose of Section 2(22)(e) of the Act. The expression accumulated profits is defined in the Income Tax Act, 1961 so as to include current profit upto the date of distribution or payment. In order to neutralise the decisions holding that accumulated profits in Section 2(6A) of the 1922 Act do not include current profits , the expression 'accumulated profits was defined in the 1961 Act so as to include current profit upto date of distribution or payment. Explanation 2 to Section 2(22) of the Income Tax Act reads as : The expression accumulated profits in sub-clauses a,b,c,d and e, shall include all profits of the company up to the date of distribution or payment referred to in those sub-clauses. and in sub-clause c shall include all profits of the company up to the date of liquidation....... 9.6 Thus it is imperative for the company to calculate its profit and losses upto the date of payment of loan o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t there are various cash deposits in the bank account of Master Siddharth Mittal and during the year there is cash deposit of ₹ 99,000/-. It is also seen that children have no separate sources of income. Assessing Officer has stated that during the year the loan raised from Master Siddharth Mittal is of ₹ 1,15,000/- and of Miss Khushi Mittal is ₹ 1,00,000/-. Appellant has not stated anything on the source of the same. Therefore, I am in agreement with Assessing Officer ₹ 2,15,000/- is not established by the Appellant and it is his own money which has routed through the bank account of his children and as such, addition to the extent of ₹ 2,15,000/- is sustained and balance amount of ₹ 2,45,000/- is deleted. However, Assessing Officer may take necessary action for the year pertaining in which the deposits have been made by the Appellant in the account of his minor children. 9.9 Ground No. 7 relates to disallowance of claim of set off of brought forward capital loss amounting to ₹ 3,61,646/- on the basis that Assessee has not filed the return of income for A.Y. 2009-10. Appellant has stated that he had duly submitted copy of acknowledgemen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 71,83,000/- and, therefore, submitted that the difference be ignored. 9.11 I have considered the observations of the Assessing Officer and submissions of the Appellant. In view of the report of the DVO, sale consideration is adopted at ₹ 71,83,000/- as against the sale consideration of ₹ 1,04,00,000/- adopted by Assessing Officer as per the circle rate and the balance addition of ₹ 32,62,000/- is deleted. (D) This present appeal has been filed by the assessee against the aforesaid impugned appellate order dated 04.07.2016 of Ld. CIT(A). In the course of appellate proceedings in Income Tax Appellate Tribunal two paper books containing the following particulars were filed from the assessee side :- S. No. Particulars 1. ITR Ack. For A.Y. 2010-11 with Audited Balance Sheet as at 31.03.2010 of M/s. Mittal Construction and Real Estate Pvt. Ltd. 2. ITR Ack. for A.Y.2010-11 with Audited Balance Sheet as at 31.03.2010 of M/s Alumni Management Company Pvt. Ltd. 3. Assessee s letter dt. 29.11.2012, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Vs. DCIT ITA no. 1932/Ahd/2013 ITAT Ahmedabad 21. Copy of judgement in the case of CIT Vs. Ansal land Mark Township P. Ltd. 377 ITR 635 (Del) Delhi High Court 22. Copy of judgement in the case of CIT Vs. Calcutta Export Company 404 ITR 654 (SC) Supreme Court of India (D.1) In addition, copy of order of Income Tax Appellate Tribunal, dated 09.08.2019, in the case of Chandra Prakash Jhunjhunwala vs. DCIT for A.Y. 2014-15 ITA No. 2351/Kol/2017 was also filed from the assessee s side. Further, a synopsis was also filed from the assessee side relevant portion of which is reproduced as under : MANOJ MITTAL A.Y. 2010-11 ITA No, 4596/Del/2016 Ground No. 1 SYNOPSIS 1. During the F.Y. 2009-10 the assessee had lent money to M/s Mittal Construction Real Estate Pvt. Ltd. As per the books of M/s Mittal Construction Real Estate Pvt. Ltd., the closing balance as on 31.03.2010 was ₹ 6,58,000/-. The date wise details of transactions are mentioned herebelow: Date Particulars Debit Credit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee had argued before the ld CIT (A) that the provision of section 2(22)(e) are not attracted to the transactions carried out in regular course of business, while stating that the money of ₹ 25,00,000/- was given by M/s Mittal Construction Real estate Pvt. Ltd. to him for a specific purpose, in regular course of its business. The assessee had also argued before the ld CIT(A) that even otherwise the addition u/s 2(22)(e) made at ₹ 18,42,000/- is not justified because as on 09.02.2010. M/s Mittal Construction Real Estate Pvt. Ltd. was not having any accumulated profit. The ld CIT (A) had held that (i) the assessee had not submitted any thing in support of his argument that the money of ₹ 25,00,000/- was given by M/s Mittal Construction Real Estate Pvt. Ltd. in regular course of it's business; and (ii) current year's profit are to be Included in accumulated profits . 4. The authorities below had overlooked the fact that the figure or accumulated profits as on 09.02.2010 was NIL; (ii) the figure of accumulated profits as on 31.03.2010 was ₹ 5,40,487/-; and (iii) the assessee was holding just 50% shares in M/s. Mittal Construction Real ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITR for A.Y. 2009-10 was not filed by the assessee. 9. The ld CIT (A) had recorded her finding that on examination of ITR Ack. for A.Y. 2009-10 she had found that the Ward No. [19(2)] and Return Receipt No. [1933002301] are mentioned, but the date of filing is not visible. The CIT (A) had further mentioned that the AO could not find the said ITR in the Return Receipt Register and ITD. Under such circumstances, the ld CIT (A) had upheld the disallowance of ₹ 3,61,646/-. 10. Once the ld CIT (A) had recorded that as per the ITR Ack. for A.Y. 2009-10, the Ward [19(2) New Delhi) and the Return Receipt No. [1933002301] are mentioned on the ITR Ack., she should had directed the ld AO [ACIT, Circle 19(1) New Delhi] to find cut the ITR of the assessee for 2009-10 which was filed vide Receipt No. 1933002301 in the office of ITO Ward 19(2) New Delhi. It may be worth pointing out here that the assessee had paid ₹ 399/- by way of self assessment tax for A.Y. 2009-10 on 27.07.2009, which was clearly mentioned in the ITR Ack. for A.Y. 2009-10. 11. Under such circumstances, this Hon'ble Bench is requested to kindly allow the set off of Long Term Capital Loss of ₹ 3, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rth Mittal. As a matter of fact (a) there was opening balance of ₹ 64,342/- in the bank a/c of Siddarth Mittal as on 01.04.2009; and (b) the figure of cash deposit in F.Y. 2009-10 mentioned at ₹ 99,000/- was not correct in as much as cash of ₹ 50,000/- [which represented the cash gifts received by him on his birthday on 28.01.2010 (6 days ago)] was deposited on 04.02.2010 in the bank A/c of Siddarth Mittal. 19. The ld CIT(A) had sustained addition of ₹ 1,00,000/- on a/c of fresh loan taken from Khushi Mittal. As a matter of fact (a) there was opening balance of ₹ 55,158/- in the bank account of Khushi Mitral as on 01.04.2009; and (b) cash of ₹ 49,900/- [which represented the cash gifts received by the Khushi Mittal on her birthday on 16.04.2009 (5 days ago)] was found deposited on 21.04.2009 in the bank a/c of Khushi Mittal. 20. The ld CIT (A) had failed to appreciate that since the sources of funds in the hands of Siddarth Mittal (₹ 65000/- Op. Bal. + ₹ 50,000/- (Gifts received on Birthday) and Khushi Mittal (₹ 55,000/- Op. Bal. + ₹ 49,900/- Gift received on Birthday) were reasonably explained by the assessee, there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Insertion of Second Proviso to sec 40(a)(ia)by Finance Act 2013 w.e.f. 01.04.2013 CIT Vs. Ansal Landmark Township Pvt. Ltd. 377 ITR 635 (Del) Amendment to sec. 40(a)(ia) by Finance Act 2010 w.e.f. 01.04.2010 CIT vs. Calcutta Export Co. 404 ITR 654 SC (D.2) At the time of hearing before us, the Ld. Authorised Representative (AR for short) of the assessee took us through the contents of the aforesaid two paper books (mentioned in foregoing paragraph (D) of this order and placed reliance on the submissions made in the aforesaid synopsis (referred to in foregoing paragraph (D.1) of this order). Moreover, for the ground 6 of this appeal, the Ld. Counsel also placed reliance on aforesaid order in the case of Chandra Prakash Jhunjhunwala vs. DCIT (supra). Ld. Senior Departmental Representative ( Ld. Sr.DR , for short) placed reliance on the impugned appellate order dated 04.07.2016 of the Ld. CIT(A). We have heard both sides patiently. We have perused materials on record carefully. We have considered the precedents referred to in the records or brought to our attention in the cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... )(e) is to be restricted to accumulated profits, there is no case for any addition, in view of foregoing facts and circumstances, in the hands of the assessee on account of aforesaid transaction of ₹ 50,000/- with M/s. Alumni Management Co. Pvt. Ltd. We direct the Assessing Officer to delete this addition of ₹ 50,000/- made u/s 2(22)(e) of IT Act. (iii) 3rd Ground of appeal is on account of the action of the Assessing Officer to disallow assessee s claim of set off of brought forward capital loss amounting to ₹ 3,61,646/- on the ground that the assessee has not filed Return of Income ( ROI , for short) for assessment year 2009-10. Ld. CIT(A) has confirmed the action on the ground that the date of filing of ROI is not visible on the stamp. However, perusal of records shows that the assessee had filed ROI for assessment year 2009-10, bearing acknowledgement no. 1933002301 in the office of ITO, Ward 19(2), New Delhi; wherein claim for long term capital loss of ₹ 3,61,646/- to be carry forward has been made. Therefore, the basis on which the assessee s claim for brought forward capital loss had been rejected by the Assessing Officer is incorrect. Further, if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2)(f) has no application to the facts of the case. Moreover, this is not a case of purchase of the properties by central government under chapter XX-C of I.T.Act; and therefore, in any case, S. 269 UA has no application to facts of this case. Thus, the Ld. CIT(A) was in error, both on facts as well as in law, in confirming the aforesaid additions of ₹ 49,000/-. In view of the foregoing, the aforesaid addition of ₹ 49,000/- has no legs to stand, and we accordingly direct the Assessing Officer to delete this addition. (v) 5th ground of appeal is in respect of addition of ₹ 4,60,000/- made by the Asessing Officer u/s 69 of the Income Tax Act; out of which an addition of ₹ 2,15,000/- was sustained by the Ld. CIT(A) and the remaining amount was deleted. The aforesaid addition of ₹ 2,15,000/- has been sustained by the Ld. CIT(A) on account of cash deposit made in the bank accounts of minor children of the assessee, Master Sidharth Mittal and Miss Khushi Mittal. At the time of hearing before us, it was brought to our notice by the Ld. Authorised Representative of the assessee that the cash deposits in the bank accounts of the aforesaid two minor children o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce of ₹ 1,83,000/- between value determined by the DVO and sale consideration as per sale deed, is less than 5% of the aforesaid sale consideration of ₹ 70,00,000/- (as per sale deed); and it is contended on behalf of the assessee, that the assessee is entitled to benefit under 3rd proviso to Section 50C(1) of Income Tax Act. It was contended by the Ld. AR of the assessee that although 3rd Proviso to Section 50C(1) of Income Tax Act has been inserted by Finance Act, 2018 with effect from 01.04.2019, it is retrospective in application, and the assessee is entitled to its benefit. For this proposition, the Ld. AR of the assessee relied on the order of Income Tax Appellate Tribunal in the case of Chandra Prakash Jhunjhunwala Vs. DCIT, relevant portion of which is reproduced as under :- 3. Ground No. 1 raised by the assessee relates to addition made by the Assessing Officer of ₹ 12,01,950/- u/s 50C of the Act. 4. Brief facts qua the issue are that the assessee has filed his return of income declaring total income of Rs. NIL and claimed current year loss of ₹ 1,19,46,383/-. The assessee's case has been selected for scrutiny through CASS. Notice u/s 143 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thority) in place of ₹ 3,15,00,000/- (sale consideration received as per the assessee). In response, the assessee furnished his submission dated 20.06.2016. Relevant extract of the said reply is furnished as under: The assessee has sold property during the year vide conveyance dated 14th December, 2013 for a consideration of ₹ 3,15,00,000/- as against the market value of the property at ₹ 3,27,01,950/- and it has been asked to explain as to why the provision of section 50C shall not apply. The assessee is objecting the value of the property for valuation at the market rate at ₹ 3,27,01,950/- for various reasons and therefore the same may be referred to the DVO for fresh valuation. The submission of the assessee had been perused by Assessing Officer and accordingly a reference had been made on 5.12.2016 to the DVO for determination of fair market value of the said property u/s 55A read with section 50C(2) of the Act. But no report had been received from the DVO within the time sought for. Hence the provision of section 50C of the Act is being invoked in case of the assessee and the value as per stamp duty authority is being adopted as the full val ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt of consideration, or a part thereof, has been received by way of an account payee cheque or account payee bank draft or by use of electronic clearing system through a bank account, on or before the date of the agreement for transfer. The following proviso shall be ins. by Finance Act, 2018 (w.e.f. 1-4- 2019): Provided also that where the value adopted or assessed or assessable by the stamp valuation authority does not exceed one hundred and five per cent of the consideration received or accruing as a result of the transfer, the consideration so received or accruing as a result of the transfer shall, for the purposes of section 48, be deemed to be the full value of the consideration. This amendment, (by way of insertion of third proviso in section 50C of the Act), was explained, in the Memorandum Explaining the Provisions of Finance Bill 2018, as follows: At present while taxing income from capital gains (section 50C), business profits (section 43CA) and other sources (section 56) arising out of transactions in immovable property, the sale consideration or stamp duty value, whichever is higher is adopted. The difference is taxed as income both in the hands of the pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s that where the consideration declared to be received or accruing as a result of the transfer of land or building or both, is less than the value adopted or assessed or assessable by any authority of a State Government (i.e. stamp valuation authority ) for the purpose of payment of stamp duty in respect of such transfer, the value so adopted or assessed or assessable shall be deemed to be the full value of the consideration, and capital gains shall be computed on the basis of such consideration under section 48 of the Income-tax Act. 9. We note that at present while taxing income from capital gains (section 50C), business profits (section 43CA) and other sources (section 56) arising out of transactions in immovable property, the sale consideration or stamp duty value, whichever is higher is adopted. The difference is taxed as income both in the hands of the purchaser and the seller. It has been pointed out that this variation can occur in respect of similar properties in the same area because of a variety of factors, including shape of the plot or location. In order to minimize hardship in case of genuine transactions in the real estate sector, it was proposed by the Finance A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 018 (w.e.f. 1-4- 2019): Provided also that where the value adopted or assessed or assessable by the stamp valuation authority does not exceed one hundred and five per cent of the consideration received or accruing as a result of the transfer, the consideration so received or accruing as a result of the transfer shall, for the purposes of section 48, be deemed to be the full value of the consideration. We note that this third proviso relates to determination of value of property therefore it cannot be a substantive amendment. Normally substantive amendments in law in applicable prospective. In view of these discussions, as also for the detailed reasons set out earlier, it is a procedural amendment in law to help the assessee to determine the value or to compute the value of property hence this amendment is not to punish the assessee just because there is minor variation between stamp duty value and the sale consideration. We note that the statute such an amendment in law, in view of the well settled legal position to the effect that a curative amendment to avoid unintended consequences is to be treated as retrospective in nature even though it may not state so specifically, fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Finance Act, 2003 should be read as amendatory and not as curative [retrospective] with effect from 1-4-1988. 9. We find no merit in these civil appeals filed by the Department for the following reasons: firstly, as stated above, section 43B [main section], which stood inserted by Finance Act, 1983, with effect from 1-4-1984, expressly commences with a non obstante clause, the underlying object being to disallow deductions claimed merely by making a Book entry based on Mercantile System of Accounting. At the same time, section 43B [main section] made it mandatory for the Department to grant deduction in computing the income under section 28 in the year in which tax, duty, cess, etc., is actually paid. However, Parliament took cognizance of the fact that accounting year of a company did not always tally with the due dates under the Provident Fund Act, Municipal Corporation Act [octroi] and other Tax laws. Therefore, by way of first proviso, an incentive/relaxation was sought to be given in respect of tax, duty, cess or fee by explicitly stating that if such tax, duty, cess or fee is paid before the date of filing of the Return under the Income-tax Act [due date], the assessee(s) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctivity arose in Allied Motors (P.) Ltd.'s case (supra). This Court, in Allied Motors (P.) Ltd.'s case (supra) held that, when a proviso is inserted to remedy unintended consequences and to make the section workable, a proviso which supplies an obvious omission in the section and which proviso is required to be read into the section to give the section a reasonable interpretation, it could be read retrospective in operation, particularly to give effect to the section as a whole. Accordingly, this Court, in Allied Motors (P.) Ltd.'s case (supra), held that the first proviso was curative in nature, hence, retrospective in operation with effect from 1-4-1988. It is important to note once again that, by Finance Act, 2003, not only the second proviso is deleted but even the first proviso is sought to be amended by bringing about an uniformity in tax, duty, cess and fee on the one hand vis-a-vis contributions to welfare funds of employee(s) on the other. This is one more reason why we hold that the Finance Act, 2003, is retrospective in operation. Moreover, the judgment in Allied Motors (P.) Ltd.'s case (supra) is delivered by a Bench of three learned Judges, which is bin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ults in equity rather than in injustice, then such construction should be preferred to the literal construction.... (p. 339) For the afore-stated reasons, we hold that Finance Act, 2003, to the extent indicated above, is curative in nature, hence, it is retrospective and it would operate with effect from 1-4-1988 [when the first proviso came to be inserted]. For the above reasons, we find no merit in this batch of civil appeals filed by the Department which are hereby dismissed with no order as to costs. 11. Similarly, the Hon`ble Supreme Court in the case of Allied Moters (P) Ltd, 91 Taxman 205 (SC) held as follows: A proviso which is inserted to remedy unintended consequences and to make the provision workable, a proviso which supplies an obvious omission in the section and is required to be read into the section to give the section a reasonable interpretation, requires to be treated as retrospective in operation so that a reasonable interpretation can be given to the section as a whole. Accordingly, the sales-tax collected by the assessee collected in the last quarter of the relevant previous year and paid after the end of the previous year but within the time allowe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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