Case Law Details
SC approves HC ruling – Dis allowance u/s. 40(a)(ia) applies only to amounts ‘payable‘ as of 31st March and not to amounts already ‘paid‘ during the year
In CIT Vs. Vector Shipping Services(P) Ltd. Allahabad High Court has held that for disallowing expenses from business and profession on the ground that TDS has not been deducted, the amount should be payable and not which has been paid by the end of the year.
Against this order Revenue has preferred an Appeal with Honorable Supreme Court. Honorable Supreme Court has dismissed the special leave petition filed by the revenue and approved the judgment held by Honorable Allahabad High Court.
In other words Supreme Court also approves the special bench judgment in the case of Merilyn Shipping and Transport Ltd. In which it was held that dis allowance u/s. 40(a)(ia) applies only to amounts ‘payable‘ as of 31st March and not to amounts already ‘paid‘ during the year.
Text of the Supreme Court Judgment is as follows :-
SUPREME COURT OF INDIA
RECORD OF PROCEEDINGS
Petition(s) for Special Leave to Appeal (C)……
CC No(s). 8068/2014
(Arising out of impugned final judgment and order dated 09/07/2013 in ITA 122/2013 passed by the High Court Of Judicature At Allahabad)
COMMISSIONER OF INCOME TAX- MUZAFFAR NGR. Petitioner(s)
VERSUS
M/S VECTOR SHIPPING SERVICES(P) LTD.Respondent(s)
with appln. (s) for c/delay in filing SLP and c/delay in refiling slp and office report)
Date : 02/07/2014 This petition was called on for hearing today.
| CORAM : | HONORABLE THE CHIEF JUSTICE HONORABLE MR. JUSTICE MADAN B LOKUR HONORABLE MR. JUSTICE KURIAN JOSEPH |
| For Petitioner(s) | Mr. Mukul Rohatgi, Attorney GeneralMr. Rupesh Kumar, Adv.Mr. Sahil Tagotra, Adv.Mrs. Anil Katiyar ,Adv. |
| For Respondent(s) |
UPON hearing the counsel the Court made the following
ORDER
Heard Mr. Mukul Rohatgi, learned Attorney General, or the petitioner.
Delay in filing and refiling special leave petition is condoned.
Signature Not Verified
Special leave petition is dismissed.
Digitally signed by
Rajesh Dham
Date: 2014.07.02
16:38:36 IST
| (RAJESH DHAM)COURT MASTER | (RENU DIWAN)COURT MASTER |
(Submitted by CA Prarthana Jalan – Analyzed by CA Sandeep Kanoi)
Read Other Articles / Analysis by CA Prarthana Jalan
NF
Author Bio
It is referring to the expenditure (read in context of section 40(a)(ia)
The aforesaid dismissal is not a binding precedent and the question is open for examination by the Hon’ble Apex Court.
(2010) 8 SCC 701
19. However, this issue should not detain us any longer in view of well considered judgment of a three- Judge Bench of this Court reported in 2000(6) SCC 359 titled Kunhayammed & Ors Vs. State of Kerala & Anr. wherein this Court categorically held that mere dismissal of a Special Leave Petition at a preliminary stage does not constitute a binding precedent, and accordingly, any order passed by the High Court placing reliance on earlier order, can still be challenged subsequently.
20. The relevant para of the aforesaid judgment in Kunhayammed (supra) authored by most illustrious learned Judge (Hon’ble Mr. Justice R.C. Lahoti as he then was) in his lucid and concise language has held as under: (at page 377 ) :
“27. A petition for leave to appeal to this Court may be dismissed by a non-speaking order or by a speaking order. Whatever be the phraseology employed in the order of dismissal, if it is a non-speaking order, i.e., it does not assign reasons for dismissing the special leave petition, it would neither attract the doctrine of merger so as to stand substituted in place of the order put in issue before it nor would it be a declaration of law by the Supreme Court under Article 141 of the Constitution for there is no law which has been declared. If the order of dismissal be supported by reasons then also the doctrine of merger would not be attracted because the jurisdiction exercised was not an appellate jurisdiction but merely a discretionary jurisdiction refusing to grant leave to appeal. We have already dealt with this aspect earlier. Still the reasons stated by the Court would attract applicability of Article 141 of the Constitution if there is a law declared by the Supreme Court which obviously would be binding on all the courts and tribunals in India and certainly the parties thereto. The statement contained in the order other than on points of law would be binding on the parties and the court or tribunal, whose order was under challenge on the principle of judicial discipline, this Court being the Apex Court of the country. No court or tribunal or parties would have the liberty of taking or canvassing any view contrary to the one expressed by this Court. The order of Supreme Court would mean that it has declared the law and in that light the case was considered not fit for grant of leave. The declaration of law will be governed by Article 141 but still, the case not being one where leave was granted, the doctrine of merger does not apply. The Court sometimes leaves the question of law open. Or it sometimes briefly lays down the principle, may be, contrary to the one laid down by the High Court and yet would dismiss the special leave petition. The reasons given are intended for purposes of Article 141. This is so done because in the event of merely dismissing the special leave petition, it is likely that an argument could be advanced in the High Court that the Supreme Court has to be understood as not to have differed in law with the High Court.”
21. It was further held in para 40 reproduced hereinbelow :
“40. ….. In any case, the (page 382) dismissal would remain a dismissal by a non-speaking order where no reasons have been assigned and no law has been declared by the Supreme Court. The dismissal is not of the appeal but of the special leave petition. Even if the merits have been gone into, they are the merits of the special leave petition only. In our opinion neither doctrine of merger nor Article 141 of the Constitution is attracted to such an order.”
Thus, according to the law laid down by the Bench of three learned Judges of this Court, it is clear that dismissal of a matter by this Court at the threshold, with non-speaking order, would not fall in the category of binding precedent. Meaning thereby that the impugned order of the Division Bench can still be challenged on merits by the Appellant Board. Thus, the earlier order of the High Court and this Court passed in Rajinder Singh Patpatia’s case, creates no bar from re-examining the matter on merits.
Can explain me what do you mean by amount in the line “the amount should be payable and not which has been paid by the end of the year”. Is it is the amount of TDS deducted or the amount of expenditure?