- (1.) WE have heard Mr. Dipak Som, learned senior advocate appearing for the appellant. We have also perused the order passed by the CIT(A) as well as the order of the learned Tribunal. It appears to us that most of the grounds which were tried to be made out here were not pressed before the CIT(A) by the Department. The assessee is a company engaged in the business of agency/trading relating to earth moving equipments, manufacturing of diesel generating sets etc. The AO made addition in respect of cess paid on electricity, payment made to the insurance company, payment made on account of computer software maintenance, prior period expenses, house property income and depreciation in respect of furniture given on hire.
(2.) BEING aggrieved, the assessee filed an appeal before the CIT(A). The CIT(A) deleted all those additions which were made by the AO. The Tribunal held that the assessee paid the cess during the year and claimed that such payment of cess is allowable under s. 43B in computing the total income of the assessee. Subsequent thereto, it appears that all the points which were canvassed before the Tribunal, the Tribunal duly dealt with those points and on the basis of the facts and materials placed before it, the Tribunal came to the finding in favour of the assessee. The issue in question has also been decided in favour of the assessee for the asst. yr. 2004 -05 by an order so passed by the learned Tribunal. The payment in respect of interest to LIC was also dealt with by the learned Tribunal and after hearing the parties, the learned Tribunal also found that the matter has been amicably settled and the assessee thereafter paid Rs. 19,16,343 by cheque.
(3.) IN respect of the other point concerning disallowance under s. 40(a)(i) of the IT Act, 1961, the learned Tribunal relying on the order of the CIT(A) opined in favour of the assessee. The said opinion of the CIT(A) is reproduced hereunder : "5.3 I have considered the submissions of the learned Authorised Representative of the appellant and also gone through the assessment order and the facts on record. As per provisions of s. 40(a)(i) of the IT Act, 1961 any payment towards fees for technical service to a foreign party will be allowed only in the year in which tax is deducted at source and the payment is made. As per proviso to s. 40(a)(i) where in respect of any such sum tax has been deducted in any subsequent year or has been deducted in the previous year but paid in any subsequent year after the expiry of the time prescribed in sub -s. (1) of s. 200 such sum shall be allowed as a deduction in computing the income of the previous year in which less tax has been paid. The appellant debited a sum of Rs. 1,04,41,056 as the amount payable to M/s Carterpillar Asia (P) Ltd. Singapore. Out of the said amount, Rs. 86,03,536 represented such from which tax was deducted and deposited during the year and hence the same is fully allowable as per provision of s. 40(a)(i) of the IT Act, 1961. The balance sum of Rs. 18,37,520 represented the amount from which tax was deducted and for the same Act, 1961 and accordingly, the amount is also liable as tax was deducted and deposited within the due date. In view of the above, the entire sum of Rs. 1,04,41,056 (Rs. 86,03,536 + Rs. 18,37,520) is allowable under s. 40(a)(i) of the said Act, 1961 during the year. 5.4 The appellant further claimed that a sum of Rs. 44,20,028 payable to the same party i.e. M/s Carterpillar Asia (P) Ltd. Singapore for which tax was deducted during the year but the amount related to last year. Since the tax was deducted and deposited during the year, this amount is also allowable as per proviso to s. 40(a)(i) of the said Act, 1961. The fact is that the AO disallowed Rs. 41,83,508 which was also disallowed in the earlier assessment year i.e. asst. yr. to have been deposited within the due date and after examination of facts, it is clear that this amount is also allowable during this year. Therefore, the appellant is entitled for deduction of Rs. 48,61,084. In view of the above, the addition of Rs. 41,83,508 is hereby ordered to be deleted." The other point was also dealt by the learned Tribunal when the learned Tribunal held as follows : "I have considered the submission of the learned Authorised Representative of the appellant and gone through the assessment order and the facts of the case. So far as the amount of Rs. 19,16,343 is concerned, which is payment to LIC has already been considered in the ground No. 2 and has been allowed in favour of the appellant. Regarding the other two items which represents sales -tax of Rs. 17,61,670 and the bonus of Rs. 10,20,253 is allowable as per provision of s. 43B of the IT Act, 1961. Therefore, there is no excess of such expenditure over the income related to earlier years as worked out by the AO in the assessment order. In view of the above and also in view of the facts and circumstances of the case, the addition of Rs. 22,93,263 made by the AO is hereby ordered to be deleted". ;