IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCHES : H : NEW DELHI
BEFORE SHRI R.S. SYAL, AM AND SHRI A.T. VARKEY, JM
ITA No.5936/Del/2010
Assessment Year : 2007-08
The Sonepat Coop. Sugar Vs. DCIT,
Mills Ltd., Sonepat Circle,
Sonepat. Sonepat.
PAN: AAAAT0959N
(Appellant) (Respondent)
Assessee By : None
Department By : Shri J.P. Chandrakar, Sr.DR
ORDER
PER R.S. SYAL, AM:
This appeal by the assessee arises out of the order passed
by the CIT(A) on 19.10.10 in relation to the assessment year
2007-08.
2. The only ground raised in this appeal is against the
confirmation of addition of `1,83,034/- on account of Local Area
Development Tax not paid before the due date of filing the return
of income.
ITA No.5936/Del/2010
3. Briefly stated, the facts of the case are that the assessee, a
cooperative sugar mill, claimed deduction for Local Area
Development Tax of `1,83,034/- and equal amount was shown as
payable in its balance sheet. Since the said amount was not paid
before the due date of filing the return, the AO, impliedly invoking
the provisions of section 43B of the Income-tax Act, 1961
(hereinafter also called `the Act'), made disallowance for the said
sum. The ld. CIT(A) upheld the disallowance and also directed the
AO to allow deduction for a sum of `93,338/-, being the amount
paid on 18.8.2006 allowed as per the order of the CIT(A) for the
AY 2006-07. The assessee is aggrieved this disallowance.
4. We have heard the ld. DR and perused the relevant material
on record. None appeared from the side of the assessee despite
notice during the course of hearing. However, someone came
immediately after the conclusion of hearing to submit that the
very payment of the Local Area Development Tax is under
challenge before the Hon'ble Supreme Court and the matter is
still sub judice.
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ITA No.5936/Del/2010
5. In view of the fact that the amount was payable as at the
end of the year in its balance sheet implies that the assessee
claimed deduction for this sum in its Profit & Loss Account. As per
the mandate of section 43B, deduction can be allowed for such
sum only subject to the payment latest by the due date for filing
the return of income u/s 139(1) of the Act. Since the amount was
not paid by the assessee before the due date of filing the return,
in our considered opinion, the authorities below were justified in
making and sustaining its disallowance u/s 43B. In so far as the
contention about the amount possibly not becoming payable by
virtue of the likely judgment of the Hon'ble Supreme Court, we
find that if the amount turns out to be not payable, then, there
can be no question of deduction also. The disallowance u/s 43B
proceeds on the premise that the assessee initially claims
deduction which is not allowable because of the non-payment of
tax, duty or fees etc., before the due date. Whatever may be the
circumstance, the amount disallowed by the AO would require
addition in respect of the claim for deduction made by the
assessee in respect of the said sum for the year in question. We,
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ITA No.5936/Del/2010
therefore, do not propose to interfere with the impugned order on
this score.
6. In the result, the appeal is dismissed.
The order pronounced in the open court on 07.01.2015.
Sd/- Sd/-
[A.T. VARKEY] [R.S. SYAL]
JUDICIAL MEMBER ACCOUNTANT MEMBER
Dated, January, 2015.
dk
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT (A)
5. DR, ITAT
AR, ITAT, NEW DELHI.
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