M/s. Bora Agro Foods, Pune V. Additional Commissioner of Income-tax,

ITA 1882/PUN/2013

• Counselvise Citation: 188224514 RSA 2013
• Duration Of Justice: 1 year(s) 5 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-04-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 09-02-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 18-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K MODI
• Section: 143(3); 10AA; 10B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO.1882/PN/2013 (ASSESSMENT YEAR : 2010-11) M/S BORA AGRO FOODS, FIRST FLOOR, SAMRAT HOUSE, 39D 2/6, SHANKARSHETH ROAD, PUNE 411 037. PAN : AABFB4517E . APPELLANT VS. ADDL. COMMISSIONER OF INCOME TAX, RANGE- 2, PUNE. . RESPONDENT ASSESSEE BY : MR. NIKHIL PATHAK DEPARTMENT BY : MR. A. K. MODI DATE OF HEARING : 09-02-2015 DATE OF PRONOUNCEMENT : 10-04-2015 ORDER PER G. S. PANNU, AM THE CAPTIONED APPEAL BY THE ASSESSEE IS DIRECTED AG AINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-II, PUNE D ATED 04.07.2013 WHICH, IN TURN, HAS ARISEN FROM AN ORDER DATED 08.03.2013 PASSED BY THE ASSESSING OFFICER U/S 143(3) OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT) PERTAINING TO THE ASSESSMENT YEAR 2010-11. 2. IN THIS APPEAL, THE ONLY GRIEVANCE OF THE ASSESS EE IS AGAINST THE ACTION OF THE INCOME-TAX AUTHORITIES IN DENYING DEDUCTION FOR A SUM OF RS.70,35,997/-. 3. IN BRIEF, THE RELEVANT FACTS ARE AS FOLLOWS. TH E APPELLANT IS A COMPANY INCORPORATED UNDER THE PROVISIONS OF THE COMPANIES ACT, 1956 AND IS, INTER- ALIA, ENGAGED IN THE BUSINESS OF MANUFACTURE AND EX PORT OF HULLED SESAME SEEDS AND DEALING IN SPICES. THE ASSESSING OFFICER NOTICED THAT IN THE RETURN OF INCOME, ASSESSEE HAD CLAIMED DEDUCTION OF A SUM OF RS.70,35,997/- ITA NO.1882/PN/2013 REPRESENTING FREIGHT CHARGES INCURRED IN THE PRECED ING ASSESSMENT YEAR 2009-10. THE ASSESSEE EXPLAINED THAT THE TAX DEDUC TION AT SOURCE (TDS) CORRESPONDING TO THE IMPUGNED SUM WAS DEDUCTED IN T HE PREVIOUS YEAR RELEVANT TO THE EARLIER ASSESSMENT YEAR 2009-10 BUT IT WAS PAID TO THE CREDIT OF THE GOVERNMENT IN THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION I.E. 2010-11. UNDER THESE CIRCUMSTAN CES BY APPLICATION OF SECTION 40(A)(IA) OF THE ACT, SUCH EXPENDITURE WAS NOT ALLOWABLE WHILE COMPUTING INCOME CHARGEABLE UNDER THE PROFITS AND G AINS OF BUSINESS FOR ASSESSMENT YEAR 2009-10. HOWEVER, IN TERMS OF THE PROVISO TO SECTION 40(A)(IA) OF THE ACT WHICH PRESCRIBED THAT WHERE SU CH TAX HAS BEEN DEPOSITED TO THE CREDIT OF THE CENTRAL GOVERNMENT IN THE SUBS EQUENT YEAR, SUCH SUM SHALL BE ALLOWED AS A DEDUCTION IN COMPUTING THE IN COME OF THE SUBSEQUENT YEAR IN WHICH SUCH TAX HAS BEEN PAID; ASSESSEE CONT ENDED THAT IN THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION SUCH TAX HAS BEEN PAID AND THEREFORE IT CLAIMED DEDUCTION FO R THE CORRESPONDING EXPENDITURE OF RS.70,35,997/- WHILE COMPUTING THE I NCOME FOR THE YEAR UNDER CONSIDERATION. PERTINENTLY, IN THE PRECEDING ASSES SMENT YEAR OF 2009-10, SUCH SUM WAS NOT ALLOWED AS A DEDUCTION WHILE COMPUTING INCOME CHARGEABLE UNDER THE HEAD PROFITS AND GAINS OF BUSINESS BY A PPLICATION OF SECTION 40(A)(IA) OF THE ACT. THE ASSESSING OFFICER HAS NO T DISPUTED THE AFORESAID FACTUAL MATRIX BUT HE HAS DENIED ASSESSEES CLAIM F OR DEDUCTION OF RS.70,35,997/- IN THE YEAR UNDER CONSIDERATION. TH E REASONS ADVANCED BY THE ASSESSING OFFICER WAS THAT THOUGH THE ASSESSEE ADDE D BACK RS.70,35,997/- TO ITS INCOME IN THE PRECEDING ASSESSMENT YEAR 2009-10 BUT THE ENTIRE INCOME OF THE ASSESSEE (INCLUSIVE OF SUCH ADD BACK) WAS ALLOW ED A DEDUCTION IN TERMS OF SECTION 10B OF THE ACT. IN SO FAR AS THE CURRENT A SSESSMENT YEAR IS CONCERNED, THERE IS NO CLAIM FOR DEDUCTION U/S 10B OF THE ACT. ACCORDING TO THE ASSESSING OFFICER, THE DEDUCTION OF SUCH AMOUNT CANNOT BE ALL OWED IN THIS YEAR ON THE BASIS OF THE PROVISO TO SECTION 40(A)(IA) OF THE AC T BECAUSE IN THE PRECEDING ITA NO.1882/PN/2013 ASSESSMENT YEAR THE TAX BURDEN ON THE ASSESSEE QUA THE SAID AMOUNT WAS REDUCED TO NIL ON ACCOUNT OF THE DEDUCTION U/S 10B OF THE ACT. THE CIT(A) HAS ALSO AFFIRMED THE STAND OF THE ASSESSING OFFICE R AGAINST WHICH ASSESSEE IS IN APPEAL BEFORE US. 4. BEFORE US, THE SUM AND SUBSTANCE OF THE PLEA RAI SED BY THE ASSESSEE IS THAT HAVING REGARD TO THE PROVISIONS OF SECTION 40( A)(IA) OF THE ACT, IF THE ASSESSEE DOES NOT PAY THE TDS DEDUCTED ON AN EXPEND ITURE, THEN SUCH EXPENDITURE IS NOT ALLOWABLE AS A DEDUCTION WHILE C OMPUTING THE INCOME. FOLLOWING THE AFORESAID, THE DISALLOWANCE OF IMPUGN ED EXPENDITURE WAS MADE IN ASSESSMENT YEAR 2009-10. FURTHERMORE, IN THE CU RRENT ASSESSMENT YEAR FOLLOWING THE PROVISIONS OF SECTION 40(A)(IA) OF TH E ACT, SUCH EXPENDITURE WAS LIABLE TO BE ALLOWED SINCE THE REQUISITE TDS HAS BE EN PAID TO THE GOVERNMENT IN THE CURRENT YEAR. THE LD. REPRESENTATIVE FOR TH E ASSESSEE VEHEMENTLY POINTED OUT THAT THERE IS NO DOUBLE BENEFIT INASMUC H AS THE CLAIM OF THE ASSESSEE IS WITHIN THE PURVIEW OF SECTION 40(A)(IA) OF THE ACT. THE LD. REPRESENTATIVE ALSO POINTED OUT THAT IF THERE WAS T HE LEGISLATIVE INTENT TO PROHIBIT SUCH A CLAIM, THE SAME WOULD HAVE BEEN PRO VIDED FOR IN THE RELEVANT PROVISIONS I.E. SECTION 40(A)(IA) OF THE ACT. IN T HE ABSENCE OF ANY SPECIFIC PROVISION IN THIS CONTEXT, IT IS CONTENDED THAT THE SAID CLAIM OF THE ASSESSEE BE ALLOWED. 5. ON THE OTHER HAND, THE LD. DEPARTMENTAL REPRESEN TATIVE APPEARING FOR THE REVENUE HAS CONTENDED THAT SINCE NO ADDITIONAL TAXES ON THE DISALLOWANCE IN QUESTION WERE PAID BY THE ASSESSEE IN THE PRECED ING ASSESSMENT YEAR, THE ASSESSEE CANNOT BE ALLOWED TO REDUCE ITS TAX BURDEN BY CLAIMING DEDUCTION OF THE SAID AMOUNT AGAINST TAXABLE INCOME OF THE CURRE NT YEAR BY UTILIZING THE PROVISO TO SECTION 40(A)(IA) OF THE ACT. THE LD. D EPARTMENTAL REPRESENTATIVE ALSO REFERRED TO THE FOLLOWING DISCUSSION IN THE OR DER OF THE CIT(A) WHEREIN THE ITA NO.1882/PN/2013 CLAIM HAS BEEN DENIED ON THE BASIS OF THE PROVISION S OF SECTION 80A(4) OF THE ACT :- HOWEVER, THE CONTENTION OF THE APPELLANT THAT THE SAID AMOUNT ON WHICH DEDUCTION U/S 10B HAS ALREADY BEEN ALLOWED SHOULD B E CONSIDERED FOR ALLOWANCE DURING A.Y. 2010-11 IS NOT TENABLE UNDER LAW IN VIEW OF THE INSERTION OF A NEW SUB-SECTION (4) IN SECTION 80A WITH RETROS PECTIVE EFFECT FROM THE A Y. 2003-04 BY THE FINANCE (NO.2) ACT, 2009, THE NEWLY INSERTED SUB-SECTION (4) IN SECTION 80A PROVIDES THAT NOTWITHSTANDING ANYTHI NG TO THE CONTRARY CONTAINED IN SEC 10A OR SEC 10AA OR SEC 10B OR SEC 10BA OR IN ANY PROVISIONS OF CHAPTER VI-A UNDER THE HEADING. 'C-DEDUCTIONS IN RESPECT OF CERTAIN INCOMES', WHERE , IN THE CASE OF AN ASSESSEE, ANY AMOUNT OF PROFITS AND GAINS OF AN UND ERTAKING OR UNIT OR ENTERPRISE OR ELIGIBLE BUSINESS IS CLAIMED AND ALLO WED AS A DEDUCTION UNDER ANY OF THOSE PROVISIONS FOR ANY ASSESSMENT YE AR, DEDUCTION IN RESPECT OF, AND TO THE EXTENT OF, SUCH PROFITS AND GAINS SHALL NOT BE ALLOWED UNDER ANY OTHER PROVISIONS OF THIS ACT FOR SUCH ASSESSMENT YEAR AND SHALL IN NO CASE EXCEED THE PROFITS AND GA INS OF SUCH UNDERTAKING OR UNIT OR ENTERPRISE OR ELIGIBLE BUSIN ESS, AS THE CASE MAY BE. THE NEWLY INSERTED PROVISION IN SUB SECTION (4) OF SEC 80A CAN BE EXPLAINED AS UNDER: 1. IF THE ASSESSEE CLAIMS DEDUCTION TOWARDS ANY AMO UNT OF PROFITS AND GAINS OF AN UNIT OR ELIGIBLE BUSINESS. 2. SUCH DEDUCTION IS ALLOWED UNDER ANY OF THE SPECI FIED SECTION INCLUDING SEC 10B FOR ANY OF THE ASSESSMENT YEAR- THEN THE FOLLOWING CONSEQUENCES WILL FOLLOW THAT DE DUCTION IN RESPECT OF AND TO THE EXTENT OF SUCH PROFITS AND GAINS SHALL NOT BE A LLOWED UNDER ANY OTHER PROVISIONS OF THE ACT FOR SUCH ASSESSMENT YEAR. THE ABOVE AMENDMENT HAS BEEN BROUGHT ABOUT TO CURB THE CLAIM OF MULTIPLE DE DUCTION BY THE ASSESSEE, THOUGH SEC 80IA(A) ALSO CONTROLS DOUBLE DEDUCTION. THESE SECTIONS ARE OVERLAPPING IN NATURE HOWEVER, SEC 80A(4) HAS FAR G REATER REACH. 4.3 IN THE PRESENT CASE THE APPELLANT HAS ALREADY BEEN ALLOWED DEDUCTION U/S 1GB ON RS.59,43,736/- IN RESPECT OF THE BUSINES S PROFITS DERIVED FROM EOU UNIT, THE SAME CANNOT BE CONSIDERED AGAIN FOR T HE CLAIM OF DEDUCTION IN RESPECT OF EXPENDITURE DISALLOWED FOR EARLIER YEARS ON WHICH THE CLAIM OF DEDUCTION U/S 10B HAS ALREADY BEEN ALLOWED, IN ANY CASE THE CLAIM OF DOUBLE DEDUCTION IS NOT IN THE SCHEME OF THE ACT ITSELF AN D, THEREFORE, THE CLAIM MADE BY THE APPELLANT IS LIABLE TO BE REJECTED. 6. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS. SECTION 40(A)(IA) OF THE ACT PRESCRIBES THAT IN RESPECT OF CERTAIN EX PENDITURE SPECIFIED THEREIN ON WHICH TAX IS DEDUCTIBLE AT SOURCE UNDER CHAPTER XVI I-B AND SUCH TAX HAS NOT BEEN DEDUCTED OR, AFTER DEDUCTION, HAS NOT BEEN PAI D WITHIN THE PERIOD PRESCRIBED THEREIN THEN SUCH EXPENDITURE SHALL NOT BE ALLOWED AS A DEDUCTION ITA NO.1882/PN/2013 WHILE COMPUTING THE INCOME CHARGEABLE UNDER THE HEA D PROFITS AND GAINS OF BUSINESS OR PROFESSION. THE PROVISO TO SECTION 40( A)(IA) OF THE ACT ALSO SPECIFIES THAT WHERE IN RESPECT OF SUCH SUM, TAX HA S BEEN DEDUCTED IN ANY SUBSEQUENT YEAR OR HAS BEEN DEDUCTED DURING THE PRE VIOUS YEAR BUT PAID AFTER THE DUE DATE SPECIFIED IN SECTION 139(1) OF THE ACT , SUCH SUM SHALL BE ALLOWED AS A DEDUCTION IN COMPUTING THE INCOME OF THE YEAR IN WHICH SUCH TAX HAS BEEN ACTUALLY PAID. IN THE PRESENT CASE, IT IS QUI TE CLEAR THAT IN SO FAR AS THE PRECEDING ASSESSMENT YEAR 2009-10 IS CONCERNED, ASS ESSEE HAD DEFAULTED IN TERMS OF SECTION 40(A)(IA) OF THE ACT AND IN COMPUT ING THE INCOME CHARGEABLE UNDER THE PROFITS AND GAINS OF BUSINESS IT ADDED BA CK THE SUM OF RS.70,35,997/- WHICH REPRESENTED FREIGHT CHARGES. ON THE STRENGTH OF THE PROVISO TO SECTION 40(A)(IA) OF THE ACT IN THE CURR ENT ASSESSMENT YEAR I.E. ASSESSMENT YEAR 2010-11, THE CASE SETUP BY THE ASSE SSEE IS THAT SUCH SUM BE ALLOWED AS A DEDUCTION IN COMPUTING THE INCOME B ECAUSE THE SAME HAS BEEN PAID DURING THE YEAR UNDER CONSIDERATION. HAV ING REGARD TO THE EXPLICIT PROVISIONS OF SECTION 40(A)(IA) OF THE ACT, NO FAUL T CAN BE FOUND WITH THE CLAIM OF THE ASSESSEE. IN-FACT, IN SO FAR AS THE WORDING OF SECTION 40(A)(IA) OF THE ACT IS CONCERNED, EVEN THE REVENUE DOES NOT DISPUTE THA T THE CLAIM OF THE ASSESSEE IS IN ORDER. SO HOWEVER, ACCORDING TO THE REVENUE, THE DISALLOWANCE/ADD BACK IN COMPUTING THE INCOME FOR A SSESSMENT YEAR 2009-10 IS CONCERNED, NO TAXES WERE SUFFERED BY THE ASSESSE E ON THIS SUM BECAUSE IT WAS ALLOWED DEDUCTION U/S 10B OF THE ACT. BECAUSE OF THE ALLOWANCE OF DEDUCTION U/S 10B OF THE ACT IN ASSESSMENT YEAR 200 9-10, THE CASE OF THE REVENUE IS THAT THE IMPUGNED SUM CANNOT BE ALLOWED AS A DEDUCTION IN THE CURRENT ASSESSMENT YEAR ON AN APPLICATION OF THE PR OVISO TO SECTION 40(A)(IA) OF THE ACT. ACCORDING TO THE REVENUE, IT WOULD RESULT IN A DOUBLE BENEFIT TO THE ASSESSEE. APART THEREFROM, RELIANCE HAS BEEN PLACE D ON SECTION 80A(4) TO SUPPORT THE DENIAL OF ASSESSEES CLAIM. THE PROVIS IONS OF SECTION 80A(4) OF THE ACT, READ AS UNDER :- ITA NO.1882/PN/2013 80A(4) NOTWITHSTANDING ANYTHING TO THE CONTRAR Y CONTAINED IN SEC 10A OR SEC 10AA OR SEC 10B OR SEC 10BA OR IN ANY PROVISION S OF CHAPTER UNDER THE HEADING 'C-DEDUCTIONS IN RESPECT OF CERTAIN INCOMES ', WHERE, IN THE CASE OF AN ASSESSEE, ANY AMOUNT OF PROFITS AND GAINS OF AN UNDERTAKING OR UNIT OR ENTERPRISE OR ELIGIBLE BUSINESS IS CLAIMED AND ALLO WED AS A DEDUCTION UNDER ANY OF THOSE PROVISIONS FOR ANY ASSESSMENT YEAR, DE DUCTION IN RESPECT OF, AND TO THE EXTENT OF, SUCH PROFITS AND GAINS SHALL NOT BE ALLOWED UNDER ANY OTHER PROVISIONS OF THIS ACT FOR SUCH ASSESSMENT YEAR AND SHALL IN NO CASE EXCEED THE PROFITS AND GAINS OF SUCH UNDERTAKING OR UNIT O R ENTERPRISE OR ELIGIBLE BUSINESS, AS THE CASE MAY BE. 7. SECTION 80A(4) OF THE ACT PRESCRIBES THAT WHERE IN THE CASE OF AN ASSESSEE ANY AMOUNT OF PROFITS AND GAINS OF UNDERTA KING OR UNIT OR ENTERPRISE OR ELIGIBLE BUSINESS IS CLAIMED AND ALLOWED AS A DE DUCTION U/S 10A OR SECTION 10AA OR SECTION 10B OR SECTION 10BA OR IN ANY PROVI SIONS OF CHAPTER VI-A UNDER THE HEADING C-DEDUCTIONS IN RESPECT OF CERTAIN INCOMES FOR ANY ASSESSMENT YEAR, THEN DEDUCTION IN RESPECT OF AND T O THE EXTENT OF SUCH PROFITS AND GAINS SHALL NOT BE ALLOWED UNDER ANY OTHER PROV ISIONS OF THIS ACT FOR SUCH ASSESSMENT YEAR AND SHALL IN NO CASE EXCEED THE PRO FITS AND GAINS OF SUCH UNDERTAKING OR UNIT OR ELIGIBLE BUSINESS, AS THE CA SE MAY BE. OSTENSIBLY, SECTION 80A(4) OF THE ACT HAS BEEN INSERTED BY THE FINANCE (NO.2) ACT, 2009 W.R.E.F. 01.04.2003. A PERUSAL OF THE AFORESAID PR OVISION WOULD REVEAL THAT THE PURPOSE OF ITS INTRODUCTION IS TO PREVENT AN ASSESS EE FROM CLAIMING MULTIPLE DEDUCTIONS FOR THE SAME PROFITS. NOTABLY, THE DEDU CTIONS REFERRED TO THEREIN ARE THOSE CONTAINED IN SECTION 10A OR SECTION 10AA OR SECTION 10B OR SECTION 10BA OR UNDER ANY PROVISIONS OF CHAPTER VI-A UNDER THE HEADING C- DEDUCTIONS IN RESPECT OF CERTAIN INCOMES . IT IS ALSO PERTINENT TO NOTE THAT THE SAID SECTION SEEKS TO DENY MULTIPLE DEDUCTIONS FOR THE SAME PROFITS IN THE SAME ASSESSMENT YEAR. THE AFORESAID BECOMES AMPLY CLEAR FROM THE PHRASEOLOGY OF SECTION 80A(4) OF THE ACT ITSELF. I N-FACT, A PERUSAL OF THE NOTES ON CLAUSES EXPLAINING THE VARIOUS PROVISIONS IN THE FINANCE (NO.2) ACT, 2009 RELATING TO SECTION 80A(4) OF THE ACT ALSO BEARS OU T THE AFORESAID INFERENCE. IN THIS CONTEXT, THE FOLLOWING STATEMENTS IN THE NOTES OF CLAUSES TO THE FINANCE ITA NO.1882/PN/2013 (NO.2) ACT, 2009 WHICH INSERTED SECTION 80A(4) OF T HE ACT IS RELEVANT, WHICH IS REPORTED AT 314 ITR 57 (STATUTES) ESPECIALLY AT PAG E 199, AND READS AS UNDER :- AMENDMENT IN CHAPTER VIA TO PREVENT ABUSE OF TAX I NCENTIVES THE PROFIT LINKED DEDUCTIONS IN CHAPTER VIA ARE PR ONE TO CONSIDERABLE MISUSE. FURTHER, SINCE THE SCOPE OF THE DEDUCTIONS UNDER VARIOUS PROVISIONS OF CHAPTER VIA OVERLAP, THE TAXPAYERS, AT TIMES, CL AIM MULTIPLE DEDUCTIONS FOR THE SAME PROFITS. WITH A VIEW TO PREVENTING SUCH MISUSE, IT IS PROPOSED TO AMEND THE PROVISIONS OF SECTION 80A OF THE INCOME-TAX ACT TO PROVIDE THE FOLLOWING, NAMELY : (I) DEDUCTION IN RESPECT OF PROFITS AND GAINS SHALL NOT BE ALLOWED UNDER ANY PROVISIONS OF SECTION 10A OR SECTION 10AA OR SE CTION 10B OR SECTION 10BA OR UNDER ANY PROVISIONS OF CHAPTER VIA UNDER THE HE ADING 'C.DEDUCTIONS IN INSPECT OF CERTAIN INCOMES' IN ANY ASSESSMENT YEAR, IF A DEDUCTION IN RESPECT OF SAME AMOUNT UNDER ANY OF THE AFORESAID HAS BEEN ALLOWED IN THE SAME ASSESSMENT YEAR ; (II) THE AGGREGATE OF THE DEDUCTIONS UNDER THE VARI OUS PROVISIONS REFERRED TO IN (I) ABOVE, SHALL NOT EXCEED THE PROF ITS AND GAINS OF THE UNDERTAKING OR UNIT OR ENTERPRISE OR ELIGIBLE BUSIN ESS, AS THE CASE MAY BE; [UNDERLINED FOR EMPHASIS BY US] 8. OSTENSIBLY, THE PRESENT CLAIM OF THE ASSESSEE IN THE CURRENT ASSESSMENT YEAR IS FOR DEDUCTION OF RS.70,35,997/- IN TERMS OF THE PROVISO TO SECTION 40(A)(IA) OF THE ACT. THERE IS NO CLAIM UN DER ANY OF THE PROVISIONS COVERED IN SECTION 80A(4) OF THE ACT. THEREFORE, I NVOKING SECTION 80A(4) OF THE ACT IN THE PRESENT CASE TO DENY ASSESSEES CLAIM IS ANYWAY NOT JUSTIFIED. SO HOWEVER, EVEN IF FOR A MOMENT, WE ACCEPT THE INVOKI NG SECTION 80A(4) OF THE ACT BY THE REVENUE YET IT WOULD COVER A SITUATION I F MULTIPLE DEDUCTIONS ARE CLAIMED FOR SAME PROFITS IN THE SAME ASSESSMENT YEA R. OSTENSIBLY, THAT IS NOT THE CASE IN THE PRESENT SITUATION BECAUSE THERE IS NO MULTIPLE DEDUCTIONS CLAIMED BY THE ASSESSEE QUA THE IMPUGNED AMOUNT IN THE ASSESSMENT YEAR UNDER CONSIDERATION I.E. 2010-11. THEREFORE, WE FI ND THAT THERE IS NO RELEVANCE OF SECTION 80A(4) OF THE ACT IN ORDER TO TEST THE E FFICACY OF THE CLAIM FOR DEDUCTION OF RS.70,35,997/- MADE BY THE ASSESSEE ON THE STRENGTH OF THE PROVISO TO SECTION 40(A)(IA) OF THE ACT. THUS, THI S STAND OF THE REVENUE IS LIABLE TO BE REJECTED. ITA NO.1882/PN/2013 9. NOW, WE MAY TAKE-UP THE OTHER PLEA OF THE REVENU E TO THE EFFECT THAT THE ASSESSEE WOULD DERIVE DOUBLE BENEFIT IF THE CLA IM WAS ALLOWED BECAUSE IN THE EARLIER YEAR SUCH INCOME HAS NOT SUFFERED TAX O N ACCOUNT OF THE DEDUCTION U/S 10B OF THE ACT. IN THIS CONTEXT, WE ARE UNABLE TO FIND ANY STATUTORY SUPPORT TO THE PLEA OF THE REVENUE. IT IS A WELL-SETTLED R ULE OF LAW THAT WHERE LANGUAGE IS CLEAR AND NOT CAPABLE OF ANY OTHER CONSTRUCTION THEN THE SAME HAS TO BE APPLIED. IN THIS CONTEXT, THE ASSESSEE HAD PLACED RELIANCE ON THE PARITY OF REASONING LAID DOWN BY THE HONBLE BOMBAY HIGH COUR T IN THE CASE OF ELPHINSTONE SPINNING AND WEAVING MILLS CO. LTD. VS. CIT, 28 ITR 811 (BOM.). THE ISSUE BEFORE THE HONBLE HIGH COURT WAS RELATIN G TO THE LIABILITY FOR ADDITIONAL INCOME TAX ON PAYMENT OF EXCESS DIVIDEN DS. ACTUALLY, ASSESSEE WAS FOUND TO HAVE PAID EXCESS DIVIDEND, SO HOWEVER, IT RESISTED THE LIABILITY TO ADDITIONAL INCOME TAX ON THE GROUND THAT IT HAD NO TAXABLE INCOME OTHERWISE. THE HONBLE HIGH COURT HELD THAT THE CLAIM OF THE R EVENUE WAS UNSUSTAINABLE, AND IN COMING TO SUCH CONCLUSION, THE HONBLE HIGH COURT MADE THE FOLLOWING OBSERVATIONS, AS APPEARING IN THE HEAD NOTES :- IT IS A CONDITION PRECEDENT TO THE LEVY OF ADDITIO NAL INCOME-TAX UNDER CLAUSE (II) OF THE PROVISO TO PARAGRAPH B OF PART I OF THE FIRST SCHEDULE TO THE INDIAN FINANCE ACT, 1951, IN RESPECT OF EXCESS DIV IDEND DISTRIBUTED BY A COMPANY, THAT THERE MUST BE A DECLARATION OF DIVIDE ND BY THE COMPANY NOT PAYABLE OUT OF ANY PROFITS, BUT OUT OF THE SPECIFIC PROFITS REFERRED TO IN THE FIRST PART OF THE PROVISO, VIZ., PROFITS LIABLE TO TAX U NDER THE INCOME-TAX ACT FOR THE YEAR ENDING ON THE 31 ST DAY OF MARCH, 1952 CONSEQUENTLY, IF A COMPANY HAS NO TAXABLE INCOME AT ALL FOR THE ASSESSMENT YEAR 19 51-52 AND IN THAT YEAR IT PAYS DIVIDENDS OUT OF THE PROFITS EARNED IN THE PRE CEDING YEAR OR YEARS, ADDITIONAL INCOME-TAX CANNOT BE LEVIED ON THE COMPA NY BY REASON OF THE FACT THAT IT HAS PAID AN EXCESS DIVIDEND WITHIN THE ME ANING OF THAT EXPRESSION IN THE PROVISO TO PARAGRAPH B OF PART I OF THE FINANCE ACT OF 1951. WHERE THE LANGUAGE IS CLEAR AND NOT CAPABLE OF ANY OTHER CONSTRUCTION, THEN HOWEVER ILLOGICAL THE POSITION, HOWEVER ABSURD THE RESULT, HOWEVER MUCH THE CONSTRUCTION PUT MAY DEFEAT THE OBJECT OF THE L EGISLATURE, THE STATUTE MUST BE CONSTRUED ACCORDING TO THE PLAIN LANGUAGE USED B Y THE LEGISLATURE, AND THE MORE SO, IF THAT PLAIN LANGUAGE SUPPORTS THE SUBJEC T AGAINST THE TAXING DEPARTMENT. ITA NO.1882/PN/2013 10. IN OUR CONSIDERED OPINION, THE AFORESAID PARITY OF REASONING LAID DOWN BY THE HONBLE BOMBAY HIGH COURT, ANSWERS THE OBJEC TION OF THE REVENUE RAISED BEFORE US 11. THEREFORE, IN CONCLUSION, WE UPHOLD THE PLEA OF THE ASSESSEE FOR DEDUCTION U/S 40(A)(IA) OF THE ACT OF A SUM OF RS.7 0,35,997/-. THUS, WE SET- ASIDE THE ORDER OF THE CIT(A) AND DIRECT THE ASSESS ING OFFICER TO DELETE THE IMPUGNED ADDITION. 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED, AS ABOVE. ORDER PRONOUNCED ON 10 TH APRIL, 2015. SD/- SD/- (SUSHMA CHOWLA) (G.S. PANNU) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE, DATED: 10 TH APRIL, 2015. SUJEET COPY OF THE ORDER IS FORWARDED TO : - 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A)-II, PUNE; 4) THE CIT-II, PUNE; 5) THE DR B BENCH, I.T.A.T., PUNE; 6) GUARD FILE. BY ORDER //TRUE COPY// ASSISTANT REGISTRAR I.T.A.T., PUNE