2008 (2) TMI 424

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..... ature. The income is defined under Section 2(24) of the Act. - A sum paid for advertisement towards advancement of the business is liable to be deducted from computation of the total income strictly in accordance with the provisions of the Act and not otherwise - he was liable to deduct tax at source by virtue of Section 194C of the Act failing which Section 40 (a)(ia) provides that such payment s .....

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..... the Income Tax Act, 1961 (hereinafter referred to as the 'Act') for the assessment year 2005-06 insofar as it has fastened the liability of tax of Rs. 1,29,10,775/- upon the petitioner. He has also challenged the vires of Section 40(a)(ia) of the Act. 3. The petitioner is engaged in the business of manufacture and sale of cosmetics and medical products having its unit at Allahabad. With respe .....

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..... e persons to whom the payments are made being their income and tax deducted at source on such amount by the petitioner at best would have been in the nature of part payment of tax by such person. Therefore, for such failure of deduction of tax at source, the said payment in its entirety cannot be treated to be the income of the petitioner as it would amount to double taxation of the same amount an .....

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..... General. However, Section 40 provides for certain amounts, which are not deductible in computing the income chargeable under the Act. A sum paid for advertisement towards advancement of the business is liable to be deducted from computation of the total income strictly in accordance with the provisions of the Act and not otherwise. It is not disputed that on the payment made by the petitioner, whi .....

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..... ner could not show as to how and in what manner he claims Section 40(a)(ia) of the Act to be ultravires. He could not show any legislative incompetence in enacting such provision. Vires of an statute can be challenged on the ground of legislative incompetence. We are not shown that Section 40(a)(ia) of the Act is not within the legislative competence of the Parliament and further learned counsel f .....

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