9911796707
TMI Blog2020 (8) TMI 719X X X X Extracts X X X X X X X X Extracts X X X X ..... ation cess as an expenditure - Decided in favour of assessee. - Hon ble Kul Bharat, Judicial Member And Hon ble Manish Borad, Accountant Member For the Assessee : Shri Ajay Tulasiyan, CA For the Revenue : Shri Ashish Porwal, Sr.DR ORDER PER MANISH BORAD, AM: The above captioned appeal filed by the revenue for Assessment Year 2016-17 is directed against the order of ld. Commissioner of Income-tax (Appeals)-I, Indore, dated 17.06.2019, which is arising out of the order u/s 143(3) of the Income Tax Act dated 25.12.2018 framed by the DCIT-1(1), Indore. 2. Assessee has raised following grounds of appeal:- 1. The learned CIT(A) erred in rejecting the claim of cess of ₹ 21,72,114/- incurred during the year under consideration and which was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowability of education cess. 5. At the outset Ld. Counsel for the assessee submitted that the issue stands squarely covered in favour of the assessee by various judgments mentioned herein below:- For the proposition that the rightful claim made during the course of assessment proceedings cannot be denied by taking recourse of revised return and shelter of the case of Goetz India. It is the benevolent duty of Assessing Officer to assess the correct taxable income of a person as per law even if the assessee fails to claim the same in the return of income. (i) Hon'ble Apext Court in the case of CIT Vs. Mahalaxmi Sugar Mills Co. Ltd 58 CTR 0138. (ii) Hon'ble Bombay High Court in the case of CIT Vs. Pruthvi Brokers Shareholders (P) Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rds placed before us and carefully gone through the judgments relied by the Ld. Counsel for the assessee. The sove grievance raised in this appeal by the assessee relates to rejection of claim of expenditure of education cess of ₹ 21,72,114/- incurred during the year. We observe that similar issue stands adjudicated by us in assessee s own case for the Assessment Year 2012-13 to 2014-15 vide ITA No.801 to 803/Ind/2018, ITA No.778/Ind/2018 CO Nos. 23 24/Ind/2019 wherein we have decided in favour of the assessee allowing the claim of education cess to be allowed as an expenditure after relying the judgment of Hon'ble High Court of Rajasthan in the case of Chambal Fertilizers and Chemicals Limited (supra) observing as follows:- 38. W ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 967 BUSINESS EXPENDITURE SECTION 40(a)(ii) Recently a case has come to the notice of the Board where the ITO has disallowed the cess paid by the assessee on the ground that there has been no material change in the provisions of s. 10(4) of the old Act and s.40(a)(ii) of the new Act. 2.The view of the ITO is not correct. Clause 40(a)(ii) of the IT Bill, 1961 as introduced in the Parliament stood as under: (ii) any sum paid on account of any cess, rate or tax levied on the profits or gains of any business or profession or assessed at a proportion of, or otherwise on the basis of, any such profits or gains . When the matter came up before the Select Committee, it was decided to omit the word cess from the clause. The effect of the omission of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... noticed. Noticing the objects and reasons behind introduction of Section 14A of the Act this Court held that: Expenses allowed can only be in respect of earning of taxable income. In paragraph 17, this Court went on to observe that: Therefore, one needs to read the words expenditure incurred in Section 14A in the context of the scheme of the Act and, if so read, it is clear that it disallows certain expenditure incurred to earn exempt income from being deducted from other income which is includible in the total income for the purpose of chargeability to tax. The views expressed in Walfort Share and Stock Brokers P.Ltd (supra), in our considered opinion, year again militate against the plea urged on behalf of the assessee. 34. For the afores ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
