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TMI Blog2017 (12) TMI 1822X X X X Extracts X X X X X X X X Extracts X X X X ..... the Central Income-tax Act. Section 43B states that a deduction otherwise allowable under this Act shall alone be allowed as a deduction u/s 43B(a). Since the agricultural income tax is not tax otherwise allowable under the Income-tax Act, payment of agricultural income tax in the respective assessment years on payment basis cannot be allowed as a deduction u/s 43B(a). DR as well as the AR was unable to enlighten us what has happened subsequent to the remand by the Tribunal in assessee s own case in assessment years 1997-98, 1998-99 and 1999-2000. For our reasoning in aforesaid paragraph we hold that the agricultural income being exempt from taxation under the Central Income-tax, the agricultural income tax paid by the assessee cann ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same can be claimed as a deduction under the Income-tax Act on payment basis u/s 43B(a) of the Act. The Assessing Officer, however, negatived the claim of the assessee. The Assessing Officer held that since agricultural income is exempt u/s 10(1) of the Incometax Act, the agricultural income tax paid on the exempted income cannot be allowed as a deduction. Further, the A.O. held that section 43B(a) will not have application since agricultural income tax is not a tax otherwise allowable under the Income-tax Act. For ready reference, the reasoning of the A.O. in denying the benefit of deduction of agricultural income-tax paid by assessee for the assessment year 2012- 2013 reads as follow:- However, in the computation statement, an amo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to limit the allowability of certain deductions (otherwise allowable) to be effect that these deductions can be allowed only on actual payment. 9. Admittedly, there is no clause in the IT Act which provides that AIT is an allowable business expense. That is, AIT does not qualify as a deduction otherwise allowable under the Act . That is to say, AIT clearly falls outside the purview of section 43B. In the light of above discussion, I am not in a position to entertain the claim of deduction towards AIT paid, amounting to ₹ 92,00,000/-. 3.2 Aggrieved by the orders of the A.O., denying the deduction for agricultural income tax paid, the assessee filed appeals before the first appellate authority. The CIT(A) by placing reliance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder this Act shall alone be allowed as a deduction u/s 43B(a). Since the agricultural income tax is not tax otherwise allowable under the Income-tax Act, payment of agricultural income tax in the respective assessment years on payment basis cannot be allowed as a deduction u/s 43B(a). 4.1 The order of the ITAT in ITA Nos.649, 650 651/Coch/ 2005 dated 30.11.2007 in assessee s own case does not decide the issue in favour of the assessee. On the contrary, the Tribunal has only remitted back the issue to the files of the Assessing Officer to re-compute the income. The relevant finding of the Tribunal in assessee s own case for Asst.Years 1997-98, 1998-99 and 1999-2000 reads as follow:- We have heard the learned Sr.DR for the reven ..... X X X X Extracts X X X X X X X X Extracts X X X X
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