Case Law Details
ITO Vs Millennium Writing Products Pvt Ltd. (ITAT Kolkata)- Deduction u/s. 80IB of the Act is available to an assessee whose gross total income includes any profits and gains derived from eligible business as specified in the section. Here the assessee is claiming deduction on an item of dis-allowance made by the Assessing Officer on account of employees’ contribution to PF, which was not deposited within the due date. This is neither an item of profit or gain of eligible business nor an item of Profit & Loss Account or manufacturing account rather it is just an employees’ contribution to PF, which assessee has to collect from its employees and to deposit with the PF authorities within the due date prescribed.
In case, this is not paid within the due dates the same will be disallowed. Here before us, the issue is not whether it is to be allowed in view of the payment made within the due date or within the due date of filing of return but the issue is whether this amount disallowed, the assessee is eligible for deduction u/s. 80IB of the Act or not. We are of the considered view that this is not an item of manufacturing account or P&L Account and it is neither a profit from eligible business nor a dis-allowance of expenditure pertaining to the assessee’s eligible business. Hence, the deduction u/s. 80IB(1) of the Act cannot be allowed. Hence this issue of the revenue’s appeal is allowed.
In respect of dis-allowance of contract payments u/s. 194C of the Act, reason being the TDS deducted is not deposited before the expiry of time prescribed u/s. 200(1) of the Act, thereby, Assessing Officer disallowed by invoking provisions of section 40(a)(ia) of the Act. We find that these contract payments are part of Profit and Loss Account and expenditure is disallowed by Assessing Officer in the absence of non deposit of TDS within the due date. First of all, it is to be mentioned that neither the Assessing Officer nor CIT(A) has discussed why this item is not eligible for deduction u/s. 80IB or why it is eligible. But seeing dates of payments of TDS, it seems that these are paid within due date of filing of return of income, the assessee even otherwise is eligible for deduction and the Assessing Officer cannot invoke the provisions of section 40(a)(ia) of the Act for making dis-allowance. We are of the view that, let the Assessing Officer consider this issue in the light of the allowance of deduction of this expenditure as the assessee has made payment of this TDS within the due date of filing of return of income and in case, the assessee is not allowed deduction of this expenditure by invoking the provisions of section 40(a)(ia) of the Act, he will go into the eligibility of deduction u/s. 80IB of the Act. Hence, this issue of the revenue’s appeal is set aside to the file of the Assessing Officer.
IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH: KOLKATA
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