Case Law Details
JCIT Vs M/s. Chambal Fertilizers & Chemicals Limited (Supreme Court )
The Hon’ble Supreme Court (“the Supreme Court”) in the case of Joint Commissioner of Income Tax v. M/s. Chambal Fertilizers & Chemicals Limited [SLP(C) No. 7379 of 2019] dated December 14, 2022, held that the term “tax” under Section 40(a)(ii) of the Income Tax Act, 1961 (“the IT Act”) should also include cess.
Facts:
M/s. Chambal Fertilizers & Chemicals Limited (“the Respondent”) filed an appeal before the Hon’ble Rajasthan High Court (“the High Court”) against the Order passed by the Income Tax Appellate Tribunal (“the Tribunal”) contending that Section 40(a)(ii) of the IT Act, does not disallow “cess” from claiming it as expenditure under Section 37 of the IT Act. Therefore, the cess paid should be allowed as business expenditure under Section 37 of the IT Act.
The High Court vide Judgment dated July 31, 2018 (“the Judgment”) allowed the Respondent to claim “cess” as business expenditure under Section 37 of the IT Act.
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