Case Law Details
Srei Infrastructure Finance Limited Vs ACIT (ITAT Kolkata)
ITAT Kolkata held that amount meant to be transferred to reserve fund, as per section 45-IC of the RBI Act, very well falls in the definition of income of the assessee and accordingly, such amount is to be included for the purpose of computation of income under the Income Tax Act.
Facts- The assessee’s appeal relates to disallowance of claim of Education Cess amounting to 86,70,456/-.
Further, the assessee-appellant, being an NBFC, is mandatorily required to transfer at least 20% of their net profits to a Reserve Fund as per section 45-IC of the RBI Act. The claim of the appellant is that the aforesaid amount meant to be transferred to reserve fund should not be included for the purpose of computation of income under the Income Tax Act.
Conclusion- We find that this issue is covered against the assessee by virtue of amendment with retrospective effect made by the Finance Act, 2022, whereby the Cess has been held to be part of income-tax and not allowable deduction in computing total income. Therefore, this ground of appeal is dismissed.
Please become a Premium member. If you are already a Premium member, login here to access the full content.