DCIT, Circle - 1, Kolkata, Kolkata V. M/s. Ashika Stock Broking Limited, Kolkata

ITA 1255/KOL/2010

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 5512 (ITAT-KOLKATA)
• Duration Of Justice: 5 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-11-2010
• Appeal Filed By: Department
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 17-06-2010
• Court: TRIBUNAL
• Keywords: Business income; TDS
• Section: 43B; 40(a)(ia); 194C; 139(1); 28; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : KOLKATA (BEFORE HONBLE SRI B.R.MITTAL, J. M. AND HONBLE SRI C.D.RAO, A.M) I.T.A. NO. 1255/KOL/2010 ASSESSMENT YEAR 2007-08 DY COMMISSIONER OF IT, CIR.1, KOLKATA -VS- M /S ASHIKA STOCK BROKING LTD. (PAN AACCA 7156 Q) (APPELLANT) (RESPONDENT) C.O.N O. 112(KOL)/2010 (ITA N O. 1255(KOL)/2010) ASSESSM ENT YEAR : 2007-08 M/S ASHIKA STOCK BROKING LTD. VS DY COMMISSIONER OF IT, CIR.1, KOLKATA (CROSS OBJECTOR) (RESPONDENT) APPELLANT BY : SRI P.K.MISHRA. CROSS OBJECTOR BY : SRI S.M.SURANA. O R D E R PER SHRI B.R.MITTAL, J.M. THE DEPARTMENT HAS FILED THIS APPEAL FOR THE A SSESSMENT YEAR 2007-08 AGAINST THE ORDER OF THE LEARNED C.I.T(A) DATED 09.04.2010 ON THE F OLLOWING GROUNDS : 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE LD. COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN DELETING THE A DDITION OF RS.89,319/- MADE IN THE ASSESSMENT ORDER U /S 36(1)(VA) READ WITH SECT ION 2(24)(X) ON ACCOUNT OF EMPLOYEES CONTRIBUTION TO PF WHICH WAS NOT PAID WITHIN THE DUE DATE SPECIFIED IN THE RELEVANT ACT WITHOUT CONSIDERING THE RATIO OF T HE DECISION OF THE ITAT (SPECIAL BENCH) KOLKATA IN THE CASE OF JT. CIT VS ITC LTD. [299 ITR (AT) 341] 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE LD. C.I.T(APPEALS) HAS ERRED IN DIRECTING TO ALLOW REBATE UNDER SECTION 88E OF THE I.T.ACT ON STT PAYMENT OF RS.5,44,809/- WHEN SUCH STT RELATED TR ANSACTIONS DERIVED NO INCOME CHARGEABLE TO TAX. 3. THAT LEAVE MAY BE GRANTED TO ADD,ALTER , MOD IFY OR SUBMIT FURTHER OR MORE GROUNDS OF APPEAL AT ANY TIME DURING HEARING OF A PPEAL. 2. THE ASSESSEE HAS FILED A CROSS OBJECTION ON THE FOLLOWING GROUND : 1. FOR THAT THE LD. C.I.T(A) IS ARBITRARY , ILL EGAL AND BAD AND NOT IN ACCORDANCE WITH LAW. 2. FOR THAT THE LD. C.I.T(A) ERRED IN CONFIRMIN G THE ADDITION OF RS.1,15,983/- U /S 40(A)(IA) ON THE FACTS AND CIRCUMSTANCES OF THE C ASE. 3. FOR THAT THE ASSESSEE CRAVES LEAVE TO ADD , ALTER OR AMEND ANY GROUND BEFORE OR AT THE TIME OF HEARING . 2 3. IN RESPECT OF GROUND NO. 1 OF THE APPEAL, THE RELEVANT FACTS ARE THAT THE ASSESSEE PAID EMPLOYEES CONTRIBUTION TO PROVIDENT FUND OF RS.89 ,319 AFTER DUE DATE. AO BY FOLLOWING THE DECISION OF THE SPECIAL BENCH, I.T.A.T. , KOLKATA IN THE CASE OF JCIT VS ITC LTD. REPORTED IN 112 ITD 57 (CAL) (SB) EQUIVALENT TO 299 ITR (A T) 341 (SB) HAS DISALLOWED THE SAID AMOUNT BY OBSERVING AS UNDER : THEREFORE, FROM THE ABOVE IT IS FOUND THAT THE EMPLOYEES CONTRIBUTION TO THE PROVIDENT FUND AND E.S.I. FUND ARE NOT GOVERNE D BY THE PROVISIONS OF SECTION 43B OF THE I T ACT FOR THE PURPOSE OF CLAIMING D EDUCTION TO COMPUTE THE BUSINESS INCOME OF THE ASSESSEE BUT THE SAME IS GOV ERNED BY THE PROVISION OF SECTION 36(1)(VA) OF THE I T ACT , 1961 READ WITH T HE PROVISIONS OF SECTION 2(24)(X) OF THE ACT. THE SAID DECISION OF THE ITAT, KOL KATA (SB) IS APPLICABLE IN THE CASE OF THE ASSESSEE. IN VIEW OF THE DISCUSSIONS AND FINDINGS ABOVE, THE EMPLOYEES CONTRIBUTION TO PROVIDENT FUND AGGREGATING RS.89,319/-, WHICH WAS NOT PAID BY THE ASSESSEE TO THE RESPECTIVE FUND WITHIN THE DUE DATES AS STATED IN THE EXPLANATION BELOW SECTION 36(1)(VA) OF THE I.T.ACT AFTER DEDUCTING THE SAME FROM THE SALARY/WAGE OF THE EMPLOYEES OF THE ASSESSEE WELL BEFORE THE DUE DATE , IS TREATED AS INCOME OF THE ASSESSEE AS PER THE PROVISIONS OF SECTION 36( 1)(VA) READ WITH THE PROVISIONS 2(24)(X) OF THE IT ACT, 1961. BEING AGGRIEVED , ASSESSEE FILED APPEAL BEFORE THE LEARNED C.I.T(A). 4. LEARNED C.I.T(A) HAS DELETED THE SAID DISALLOWA NCE OF RS.89,319 STATING THAT IF EMPLOYEES CONTRIBUTION TO PROVIDENT FUND , ETC. IF PAID BEFORE DUE DATE OF FILING OF RETURN OF INCOME IS ALLOWABLE. IN THIS RESPECT , THE LEARNED C.I.T(A) HAS RELIED ON THE DECISIONS OF THE HONBLE APEX COURT IN THE CASE OF C.I.T VS VINAY C EMENT LTD. , 231 ITR 268 AND THE DECISION OF THE DELHI HIGH COURT IN THE CASE OF C.I.T. VS AIMIL LTD. DATED 23.12.09 REPORTED IN (2010) 1 TAXMANN .COM 73 (DELHI). HENCE DEPARTMENT IS IN FURTHER APPEAL BEFORE THE TRIBUNAL. 5. DURING THE COURSE OF HEARING, THE LEARNED D.R. SUBMITTED THAT SECTION 36(1)(VA) READ WITH SECTION 2(24)(X) OF THE ACT PROVIDES THAT D UE DATE OF PAYMENT OF EMPLOYEES CONTRIBUTION TO PROVIDENT FUND AND IF IT IS NOT PAID WITHIN DU E DATE , THE SAME CANNOT BE ALLOWED AS DEDUCTION IF IT IS PAID BELATEDLY. LEARNED D.R. SUBMITTED THAT SPECIAL BENCH ITAT IN THE CASE OF ITC LTD. (SUPRA) HAS HELD THAT THE PROVISIONS OF SECTION 43 B OF THE ACT WILL NOT APPLY IN RESPECT OF PAYMENT OF EMPLOYEES CONTRIBUTION TO PROVIDENT FU ND. LEARNED D.R. FURTHER SUBMITTED THAT THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF VINAY CEMENT LTD. (SUPRA) DEALS WITH THE PROVISIONS OF SECTION 43B OF THE ACT AND IN RESP ECT OF EMPLOYEES CONTRIBUTION TO PROVIDENT FUND, THE PROVISIONS OF SECTION 43B DOES NOT APPL Y. HE FURTHER SUBMITTED THAT THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF AIMIL LTD. (SUPRA) HAS ALSO BEEN DECIDED BY FOLLOWING THE DECISION OF VINAY CEMENT LTD. (SU PRA). HE FURTHER SUBMITTED THAT THE ONLY ISSUE DECIDED ON THOSE APPEALS WERE WHETHER AMOUNT PAID ON ACCOUNT OF P.F. AFTER DUE DATE ARE ALLOWABLE IN VIEW OF SECTION 43B READ WITH SECTI ON 36(1)(VA) OF THE ACT. HE FURTHER SUBMITTED THAT IT IS NOWHERE DECIDED AS TO WHETHER BELATED PA YMENT OF EMPLOYEES CONTRIBUTION TO 3 PROVIDENT FUND PAID IS ALLOWABLE IF IT IS PAID A FTER DUE DATE BUT BEFORE DUE DATE OF FILING OF RETURN. 6. ON THE OTHER HAND, LEARNED A.R. SUPPORTED THE ORDER OF THE LEARNED C.I.T(A) AND ALSO PLACED RELIANCE ON THE AFORESAID DECISIONS AS REL IED BEFORE THE LEARNED C.I.T(A). BESIDES ABOVE, THE LEARNED A.R. ALSO REFERRED THE DECISION OF T HE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS P.M.ELECTRONICS LTD. AIT 2008 397 H.C. 7. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF THE PARTIES AND HAVE CONSIDERED THE ORDERS OF THE AUTHORITIES BELOW. WE HAVE ALSO CON SIDERED THE CASES CITED BY THE LEARNED REPRESENTATIVES OF THE PARTIES IN SUPPORT OF THEIR SUBMISSIONS. WE OBSERVE THAT THERE IS NO DISPUTE TO THE FACT THAT ASSESSEE HAD PAID EMPLOYEES CON TRIBUTION TO PROVIDENT FUND AFTER THE DUE DATE. WE OBSERVE THAT THE ABOVE ISSUE AS TO WHETHER THE EMPLOYEES CONTRIBUTION TO PROVIDENT FUND IS ALSO SUBJECT TO THE PROVISIONS OF SECTION 43B OF T HE ACT OR NOT. IN THIS RESPECT WE CONSIDER IT NECESSARY TO STATE THE RELEVANT PROVISIONS OF SECT ION 36(1)(VA) AND RELEVANT CLAUSES OF SECTION 43B OF THE ACT WHICH ARE AS UNDER : 36(1) THE DEDUCTIONS PROVIDED FOR IN THE FOLLOWI NG CLAUSES SHALL BE ALLOWED IN RESPECT OF THE MATTERS DEALT WITH THEREIN , IN C OMPUTING THE INCOME REFERRED TO IN SECTION 28 - (I) . (IA) . (IB) . (IIA) . (III) . (IIIA) (VA) ANY SUM RECEIVED BY THE ASSESSEE FROM ANY OF HIS EMPLOYEES TO WHICH THE PROVISIONS OF SUB-CLAUSE (X) OF CLAUSE (24) OF S ECTION 2 APPLY, IF SUCH SUM IS CREDITED BY THE ASSESSEE TO THE EMPLOYEES ACCOUNT IN THE RELEVANT FUND OR FUNDS ON OR BEFORE THE DUE DATE. EXPLANATION - FOR THE PURPOSES OF THIS CLAUSE, DUE DATE MEANS THE DATE BY WHICH THE ASSESSEE IS REQUIRED AS AN EMPLOYER TO CR EDIT AN EMPLOYEES CONTRIBUTION TO THE EMPLOYEES ACCOUNT IN THE RELEVANT FUND UN DER ANY ACT, RULE, ORDER OR NOTIFICATION ISSUED THERE UNDER OR UNDER ANY STAN DING ORDER, AWARD , CONTRACT OF SERVICE OR OTHERWISE. 43B. NOTWITHSTANDING ANYTHING CONTAINED IN ANY OTHE R PROVISION OF THIS ACT, A DEDUCTION OTHERWISE ALLOWABLE UNDER THIS ACT IN RES PECT OF - A B. ANY SUM PAYABLE BY THE ASSESSEE AS AN EMPLOYER B Y WAY OF CONTRIBUTION TO ANY PROVIDENT FUND OR SUPERANNUATION FUND OR GRATUITY F UND OR ANY OTHER FUND FOR THE WELFARE OF EMPLOYEES, OR C. D. E .. F.. SHALL BE ALLOWED (IRRESPECTIVE OF THE PREVIOUS YEAR IN WHICH THE LIABILITY TO PAY SUCH SUM WAS INCURRED BY THE ASSESSEE ACCORDING TO THE M ETHOD OF ACCOUNTING REGULARLY 4 EMPLOYED BY HIM) ONLY IN COMPUTING THE INCOME REFER RED TO IN SECTION 28 OF THAT PREVIOUS YEAR IN WHICH SUCH SUM IS ACTUALLY PAID BY HIM: PROVIDED THAT NOTHING CONTAINED IN THIS SECTION SHA LL APPLY IN RELATION TO ANY SUM WHICH IS ACTUALLY PAID BY THE ASSESSEE ON OR BEFORE THE DUE DATE APPLICABLE IN HIS CASE FOR FURNISHING THE RETURN OF INCOME UNDER SUB- SECTION (1) OF SECTION 139 IN RESPECT OF THE PREVIOUS YEAR IN WHICH THE LIABILITY TO PAY SUCH SUM WAS INCURRED AS AFORESAID AND THE EVIDENCE OF SUCH PAYMENT IS FURNI SHED BY THE ASSESSEE ALONG WITH SUCH RETURN. 8. FROM THE ABOVE IT EMERGES THAT THE TERM DUE DA TE AS APPEARING IN SECTION 36(1)(VA) READ WITH EXPLANATION SPECIFIES THE DUE DATE AS THE DATE BY WHICH THE ASSESSEE IS REQUIRED AS AN EMPLOYER TO CREDIT AN EMPLOYEES CONTRIBUTION UNDE R THE EMPLOYEES A/C TO THE RELEVANT FUND. AS REGARDS THE TERM DUE DATE AS APPEARING IN SECTION 36(1)(VA), THE EXPLANATION TO SECTION 36(1)(VA) SPECIFIES THE DUE DATE AS THE DATE BY WHICH THE ASSESSEE IS REQUIRED AS AN EMPLOYER TO CREDIT AN EMPLOYEES CONTRIBUTION TO THE EMPLOYEES ACCOUNT IN THE RELEVANT FUND UNDER ANY ACT, RULE, ORDER OR NOTIFICATION ISSUED THERE-UNDER OR U NDER ANY STANDING ORDER, AWARD, CONTRACT OF SERVICE OR OTHERWISE. THE TERM DUE DATE AS SPECI FIED IN THE EXPLANATION TO SECTION 36(1)(VA) DOES NOT REFER TO THE DUE DATE FIXED FOR FILING THE RETURN OF INCOME U/S 139(1). HENCE THE DUE DATE AS FIXED FOR FILING THE RETURN OF INCOME U/S 139(1) CANNOT BE READ INTO THE EXPLANATION TO SECTION 36(1)(VA). THE DUE DATE FOR CREDITING ANY SUM RECEIVED BY THE ASSESSEE FROM HIS EMPLOYEES AS CONTRIBUTIONS TOWARDS ANY PROVIDENT FU ND OR SUPERANNUATION FUND OR ANY FUND FOR THE WELFARE OF THE EMPLOYEES BY THE EMPLOYER-ASSESS EE TO THE EMPLOYEES ACCOUNT IN THE RELEVANT FUND OR FUNDS MUST BE THE ONE SPECIFIED IN THE EXPL ANATION TO SECTION 36(1)(VA) AND NOT THE DUE DATE FOR FILING THE RETURN OF INCOME UNDER SECTION 139(1). IN THE CASE BEFORE US THERE IS NO DISPUTE THAT THE ASSESSEE COMPANY HAS NEITHER CR EDITED THE IMPUGNED CONTRIBUTION RECEIVED BY IT FROM ITS EMPLOYEES TO THE EMPLOYEES ACCOUNT IN THE RELEVANT FUND NOR IT HAS DONE SO ON OR BEFORE THE DUE DATE SPECIFIED IN THE EXPLANATION T O SECTION 36(1)(VA) AND HENCE WE ARE OF THE CONSIDERED VIEW THAT THE CLAIM OF THE ASSESSEE FOR DEDUCTION CANNOT SUCCEED. FURTHER SECTION 43B, WE ARE OF THE CONSIDERED VIEW, DOES NOT APPL Y IN RESPECT OF THE EMPLOYEES CONTRIBUTION FOR THE FOLLOWING REASONS : (I) SECTION 43B OPENS WITH A NON OBSTANTE CLAUSE WH ICH MEANS THAT IT CONTROLS THE OPERATION OF OTHER PROVISIONS OF THE I NCOME-TAX ACT IN THAT SECTION 43B WILL HAVE OVERRIDING EFFECT NOTWITHSTANDING OTH ER PROVISIONS UNDER WHICH A DEDUCTION MAY OTHERWISE BE ALLOWABLE. (II) THE OPENING WORDS OF SECTION 43B MAKE IT CLEAR THAT THE SAID SECTION WOULD HAVE OVERRIDING EFFECT AND APPLY ONLY WHEN A DEDUCTION I S OTHERWISE ALLOWABLE UNDER THE INCOME-TAX ACT. IN OTHER WORDS, THE VERY APPLICABIL ITY OF THE NON-OBSTANTE CLAUSE WOULD COME INTO PLAY ONLY WHEN A DEDUCTION IS OTHER WISE ALLOWABLE UNDER THE INCOME- TAX ACT. THUS SECTION 43B CANNOT BE PRESSED INTO SE RVICE TO ALLOW A DEDUCTION WHICH IS OTHERWISE NOT ALLOWABLE UNDER THE INCOME-TAX ACT INCLUDING SECTION 36(1)/(VA) THEREOF. IN ORDER TO AVAIL THE BENEFLT OF SECTION 43B UPON ACTUAL PAYMENT, THE 5 ASSESSEE MUST SHOW THAT THE DEDUCTION CLAIMED BY IT U/S 43B IS OTHERWISE ALLOWABLE UNDER THE PROVISIONS OF THE INCOME-TAX ACT INCLUDIN G SECTION 36(1)/(VA) THEREOF. (III) SECTION 43B BARS DEDUCTION, WHICH IS OTHERWIS E ALLOWABLE UNDER THE INCOME-TAX ACT, OF ANY SUM REFERRED TO IN CLAUSES (A) TO (F) U NLESS IT IS ACTUALLY PAID. THUS THE FACTUM OF ACTUAL PAYMENT OF ANY SUM REFERRED TO IN CLAUSES (A) TO (F) IS RELEVANT ONLY WHEN THE DEDUCTION IS OTHERWISE ALLOWABLE UNDER THE INCOME-TAX ACT. THERE ARE SEVERAL PROVISIONS IN THE INCOME-TAX ACT, WHICH SET OUT THE CONDITIONS FOR THE ALLOWABILITY OF DEDUCTIONS OF THOSE VERY SUMS WHICH ARE REFERRED TO IN SECTION 43B. THOSE PROVISIONS WOULD BE RENDERED OTIOSE IF A VIEW WAS TO BE TAKEN THAT DEDUCTIONS OF THE AFORESAID SUMS WOULD BE ALLOWED AS AND WHEN THEY ARE ACTUALLY PAID IRRESPECTIVE OF THE FACT THAT THEY ARE NOT OTHERWIS E ALLOWABLE UNDER THE INCOME-TAX ACT. THE PLAIN AND UNAMBIGUOUS LANGUAGE USED IN S ECTION 43B MAKES IT ABSOLUTELY CLEAR THAT THE ALLOWABILITY OF DEDUCTION OF ANY SUM REFERRED TO IN CLAUSES (A) TO (F) UPON ACTUAL PAYMENT IS RESTRICTED TO THOSE DEDUCTIO NS ONLY, WHICH ARE OTHERWISE ALLOWABLE UNDER THE INCOME-TAX ACT. THUS THE FACTUM OF ACTUAL PAYMENT BY ITSELF IS NOT SUFFICIENT TO SUCCESSFULLY CLAIM A DEDUCTION U/ S 43B, WHICH IS OTHERWISE NOT ALLOWABLE UNDER THE INCOME-TAX ACT. IN OTHER WORDS, ALL THOSE DEDUCTIONS, WHICH ARE OTHERWISE NOT ALLOWABLE UNDER THE INCOME-TAX ACT, C ANNOT BE ALLOWED EVEN ON ACTUAL PAYMENT U/S 43B. (IV) THE PROVISO TO SECTION 43B CARVES OUT AN EXCEP TION AND ALLOWS DEDUCTION IN RESPECT OF ANY SUM REFERRED TO IN CLAUSES (A) TO (F ) WHICH IS ACTUALLY PAID BY THE ASSESSEE ON OR BEFORE THE DUE DATE FOR FURNISHING T HE RETURN OF INCOME U/S 139(1) IN RESPECT OF THE PREVIOUS YEAR IN WHICH THE LIABILITY TO PAY SUCH SUM WAS INCURRED. HOWEVER, THE PROVISO APPLIES ONLY TO THOSE MATTERS WHICH ARE SPECIFICALLY REFERRED TO IN SECTION 43B TO WHICH IT HAS BEEN ADDED. PROVI SO TO SECTION 43B CANNOT THEREFORE BE MADE APPLICABLE TO THOSE DEDUCTIONS WH ICH ARE OTHERWISE NOT ALLOWABLE UNDER THE INCOME-TAX ACT. 9. FROM THE ABOVE WE ARE OF THE VIEW THAT A CLAIM/ DEDUCTION WHICH IS OTHERWISE NOT ALLOWABLE U /S 36(1)(VA) OR FOR THAT MATTER ANY OTHER PROVISION OF THE INCOME TAX ACT CAN NEITHER BE CONSIDERED NOR IS ALLOWED U /S 43B. T HE OPENING WORDS OF SECTION 43B ,NAMELY NOTWITHSTANDING ANYTHING CONTAINED IN ANY OTHER P ROVISION OF THIS ACT A DEDUCTION OTHERWISE ALLOWABLE UNDER THIS ACT .. MAKE IT AMPLY CL EAR THAT SECTION 43B COMES INTO PLAY ONLY WHEN DEDUCTION IS OTHERWISE ALLOWABLE UNDER T HE INCOME TAX ACT . THE PURPOSE OF SECTION 43B IS I) TO BAR THE DEDUCTION OF THE SUMS REFER RED TO THEREIN UNLESS THEY ARE ACTUALLY PAID AND II) NOT TO ALLOW DEDUCTION WHICH IS OTHERWISE NOT ALLOWABLE UNDER THE INCOME TAX ACT. THEREFORE, SECTION 43B CANNOT BE PRESSED INTO SERV ICE IN A CASE LIKE THE ONE BEFORE US WHERE DEDUCTION IS NOT OTHERWISE ALLOWABLE U /S 36(1)(VA ). MOREOVER , SECTION 43B IS A GENERAL PROVISION WHICH MERELY BARS DEDUCTION OF SPECIFI ED SUMS UNLESS THEY ARE ACTUALLY PAID AND WHEREAS PROVISIONS OF SECTION 36(1)(VA) SPECIFIC ALLY DEAL WITH DEDUCTION IN RESPECT OF PAYMENT OF EMPLOYEES CONTRIBUTION TO THE PROVIDEN T FUND. THEREFORE, THE PROVISIONS OF SECTION 36(1)(VA) , BEING SPECIAL PROVISIONS ENACTED TO DEA L WITH SPECIFIC MATTER WOULD, IN OUR VIEW, PREVAIL OVER THE GENERAL PROVISIONS OF SECTION 4 3B ON THE PRINCIPLE THAT A GENERAL CLAUSE DOES NOT EXPLAIN TO THOSE THINGS THAT HAVE BEEN PREVIO USLY PROVIDED FOR SPECIFICALLY. 6 10. WE HAVE GONE THROUGH THE DECISIONS (CITED SUP RA) IN WHICH IT IS HELD THAT EMPLOYEES CONTRIBUTION TO PROVIDENT FUND WOULD BE ELIGIBLE FOR DEDUCTION IF IT IS PAID BEFORE DUE DATE PRESCRIBED U /S 139(1) FOR FILING THE RETURN OF IN COME. HOWEVER, WE DO NOT FIND ANY SUCH OBSERVATION IN THE SAID CASES (CITED SUPRA) THAT DEDUCTION U /S 43B WOULD HAVE TO BE ALLOWED EVEN IF THE DEDUCTIONS IN RESPECT OF WHICH PAYMENT S HAVE BEEN MADE IN TERMS OF SECTION 43B ARE OTHERWISE NOT ALLOWABLE UNDER THE INCOME TAX ACT. IN FACT IT HAS NOT EVEN THE QUESTION RAISED IN THOSE DECISIONS AS TO WHETHER DEDUCTION WHICH IS NOT OTHERWISE ALLOWABLE UNDER THE INCOME TAX ACT, COULD AT ALL BE ALLOWED ON PAYMENT BASIS U /S 43B. IT IS WELL-SETTLED PRINCIPLE THAT A JUDGMENT MUST BE READ AS A WHOLE AND THE O BSERVATIONS IN THE JUDGMENT HAVE TO BE CONSTRUED IN THE LIGHT OF THE QUESTION RAISED BE FORE THE COURT. IT IS THE JUDICIAL PRINCIPLE FOUN D UPON READING THE JUDGMENT AS A WHOLE IN THE LI GHT OF THE QUESTION RAISED BEFORE THE COURT WHICH FORMS PRECEDENT AND NOT PARTICULAR WORDS OR PHRASES. 11. IN VIEW OF THE ABOVE WE HOLD THAT THE ASSESSE E IS NOT ENTITLED TO DEDUCTION U /S 36(1)(VA) OF THE EMPLOYEES CONTRIBUTION TO PROVIDENT FUND WHICH WAS PAID AFTER THE DUE DATE AS SPECIFIED IN EXPLANATION TO SECTION 36(1)(VA) O F THE ACT AS SECTION 43B CANNOT BE PRESSED INTO SERVICE BECAUSE SECTION 43B COMES INTO PLAY ONLY WHEN A DEDUCTION IS OTHERWISE ALLOWABLE UNDER THE INCOME TAX ACT . HENCE, WE CONFIRM THE ACTION OF THE AO BY REVERSING ORDER OF THE LEARNED C.I.T(A) AND ACCORDINGLY ALLOW GROUND NO. 1 TAKEN BY THE DEPARTMENT. 12. IN RESPECT OF GROUND NO. 2 OF THE APPEAL THE RELEVANT FACTS ARE THAT THE ASSESSEE PAID STT OF RS.8,09,174 AND CLAIMED REBATE U /S 88E OF T HE ACT. ASSESSEE DERIVED A NET PROFIT OF RS.50,55,462 FROM SHARE TRADING. TAX ON THE SAID SHARE PROFIT COMES TO RS.15,16,639. THE AO STATED THAT STT OF RS.5,44,809 WAS PAID FOR PURC HASE AND SALE OF SHARES IN CASH MARKET SEGMENT AND IT DOES NOT QUALIFY FOR REBATE U /S 88E AS NO INCOME FROM THE SAID CASH MARKET SEGMENT IS INCLUDED IN OR FORMING PART OF TOTAL IN COME. ACCORDINGLY, AO ALLOWED REBATE U /S 88E OF THE ACT ONLY IN RESPECT OF THE TRANSACTIO NS IN FUTURE AND OPTIONS SEGMENT ( F & O SEGMENT ) , I.E. OF RS.2,64,365. BEING AGGRIEVED THE ASSESSEE FILED APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 13. THE LEARNED C.I.T(A) AFTER CONSIDERING THE SUB MISSIONS OF THE ASSESSEE HAS HELD THAT SECTION 88E OF THE ACT PROVIDES REBATE OF STT PAI D BY AN ASSESSEE ; ONCE TOTAL INCOME INCLUDES ANY INCOME CHARGEABLE UNDER THE HEAD PROFITS & GA INS OF THE BUSINESS OR PROFESSION. HE HAS HELD THAT NO OTHER CONDITION IS LAID DOWN U /S 8 8E AND ONCE THERE IS PROFIT IN STT RELATED BUSINESS THE ASSESSEE QUALIFIES FOR REBATE U /S 88E OF THE ACT ON STT PAID. HENCE, THE LEARNED C.I.T(A) DIRECTED THE AO TO ALLOW CREDIT OF ENTIR E AMOUNT OF STT PAID , I.E. OF RS.8,09,174. HENCE, THE DEPARTMENT IS IN FURTHER APPEAL BEFORE THE TRIBUNAL. 14. DURING THE COURSE OF HEARING, THE LEARNED D.R . RELIED ON THE ORDER OF THE AO WHEREAS THE LEARNED A.R. SUPPORTED THE ORDER OF THE C.I .T(A). 15. WE HAVE CAREFULLY CONSIDERED THE ORDERS OF TH E AUTHORITIES BELOW AND THE SUBMISSIONS OF THE LEARNED REPRESENTATIVES OF THE PARTIES. WE AG REE WITH THE LEARNED A.R. THAT ONCE THERE IS A 7 NET SURPLUS FROM THE SHARE DEALING OF CAPITA MARKE T SEGMENT AND FUTURE OPTIONS SEGMENTS TAKEN TOGETHER AND THERE IS A NET PROFIT THEREFROM, THE A SSESSEE IS ENTITLED FOR REBATE OF ENTIRE STT AS PE R SECTION 88E OF THE ACT. WE AGREE WITH THE LEARNED A.R. THAT SECTION 88E OF THE ACT DOES NOT PROVIDE FOR SUCH RESTRICTIONS AS MADE BY THE AO WHILE GRANTING REBATE U /S 88E OF THE ACT. WE UPHOLD THE ORDER OF THE LEARNED C.I.T(A) AND R EJECT GROUND NO. 2 OF THE APPEAL TAKEN BY THE DEPARTMENT. 16. IN RESPECT OF GROUND OF C.O. , THE RELEVANT FA CTS ARE THAT THE AO OBSERVED FROM TAX AUDIT REPORT THAT THE ASSESSEE MADE PAYMENTS O F RS.22,551, RS.30,002 AND RS.63,429 TOTALLING RS.1,15,982 TO CONTRACTORS WITHOUT MAK ING ANY TDS. ASSESSEE HAS NOT DISPUTED THE ABOVE FACT BEFORE THE AO BUT SUBMITTED THAT THE S AID AMOUNT COULD NOT BE DISALLOWED U /S 40(A)(IA) OF THE ACT BECAUSE THE SAID SECTION I S APPLICABLE ONLY IF THE AMOUNT IS PAYABLE AND NOT IF THE AMOUNT HAD ALREADY BEEN PAID. AO DID NOT AGREE WITH THE ASSESSEE AND DISALLOW THE SAID AMOUNT OF RS.1,15,982 AS PER SECTION 40(A)( IA) OF THE ACT. IN THE FIRST APPEAL, THE LEARNED C.I.T(A) HAS ALSO CONFIRMED THE ACTION OF THE AO. IT IS RELEVANT TO STATE THAT THE ASSESSEE HAD RELIED ON THE DECISION OF THE ITAT IN THE CASE OF RAJASTHAN VIDYUT BITARAN LTD. (2009) 123 TTJ 888 CONTENDING THAT SECTION 40(A)(IA) ONLY A PPLIES IN RESPECT OF AMOUNTS PAID NOT IN RESPECT OF AMOUNTS PAYABLE. HENCE, THE ASSESSEE IS IN FURTHER APPEAL BEFORE THE TRIBUNAL. 17. DURING THE COURSE OF HEARING , THE LEARNED A.R. MADE HIS SUBMISSIONS ON THE LINES OF THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW TH AT THE SAID AMOUNT COULD NOT BE DISALLOWED U /S 40(A)(IA) OF THE INCOME TAX ACT AS THE ASSESSEE HAD ALREADY PAID THE AMOUNT TO THE CONTRACTORS AND NOTHING WAS PAYABLE. 18. WE HAVE CONSIDERED THE SUBMISSIONS OF THE LEAR NED REPRESENTATIVES OF THE PARTIES AND THE ORDERS OF THE AUTHORITIES BELOW. WE OBSERVE THAT ASSESSEE HAS NOT DISPUTED THE FACT THAT THE SAID PAYMENT OF RS.1,15,983 WAS PAID TO THE CONTRACTOR S WITHOUT DEDUCTING TDS AS PER PROVISIONS OF SECTION 194C OF THE ACT. THE CONTENTION OF THE ASSESSEE IS THAT SECTION 40(A)(IA) IS NOT APPLICABLE IN CASE WHERE SUM HAS BEEN PAID AS THE IMPUGNED SECTION IS WITH REFERENCE TO SUMS PAYABLE. WE ARE UNABLE TO ACCEPT THE AB OVE CONTENTION OF THE ASSESSEE . THE ABOVE ISSUE HAS BEEN CONSIDERED BY THE ITAT, KOLKATA BEN CHES, KOLKATA IN ITA NO. 1418(KOL)/09 VIDE ORDER DATED 15.01.10 IN THE CASE OF PODDAR S ONS EX.L (P) LTD. VS ITO WHERE IT HAS BEEN HELD AS PER PARA 6.6 , THAT EVEN IF THE SUM P AYABLE OR PAID TO THE CONTRACTORS OR SUB- CONTRACTORS ON WHICH TAX IS DEDUCTIBLE AT SOURC E AS PER THE PROVISIONS OF THE ACT , SECTION 40(A)(IA) BE ATTRACTED. SINCE ASSESSEE HAS NOT DE DUCTED TDS AS PER PROVISIONS OF SECTION 194C OF THE ACT, WE HOLD THAT THE C.I.T.(A) HA S RIGHTLY CONFIRMED THE ACTION OF THE AO IN DISALLOWING THE SAID SUM OF RS.1,15,983. HENCE, WE UPHOLD THE ORDER OF THE LEARNED C.I.T(A) BY REJECTING THE GROUND OF C.O. TAKEN BY THE ASS ESSEE. 8 19. IN THE RESULT, THE APPEAL OF THE DEPARTMENT I S ALLOWED IN PART AND WHEREAS CROSS OBJECTION FILED BY THE ASSESSEE IS REJECTED. ORDER PRONOUNCED IN OPEN COURT ON 19.11.2010 SD/- SD/- (C.D.RAO) (B.R.MITTAL) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 19.11.2010 COPY TO :- 1. DCIT, CIRCLE-1, KOLKATA. 2. M/S ASHIKA STOCK BROKING LIMITED, 226/1, A.J.C.BOSE ROAD, KOLKATA. 3. C.I.T.(A), KOLKATA. 4. C.I.T., KOLKATA. 5. D.R., ITAT, KOLKATA. TRUE COPY BY ORDER BCD DY REGISTRAR I.T.AT., KOLKA TA