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| The Tax Publishers2020 TaxPub(DT) 3605 (Pat-HC) : (2020) 429 ITR 0075 : (2020) 317 CTR 0434 : (2020) 275 TAXMAN 0045 Income Tax Act, 1961
Section 43B
Where assessee had not deposited the amount deducted as STT with the authorities, and it was not his case that the same stood paid back/returned to the person from whom it stood deducted and since he was adopting the mercantile system of accounting, he was not supposed to take any action, therefore, orders cannot be said to be perverse and illegal warranting interference by this Court.
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Business disallowance under section 43B - Deduction of Security Transaction Tax (STT) against the transaction of trading - Assessee was following mercantile system of accounting -
Assessee filed its return of income and case was selected for scrutiny through CASS. After issuance of due notice and compliance of procedural formalities, the ITO disallowed an amount deducted as Security Transaction Tax (STT) against the transaction of trading of M/s B. Officer found the said amount of STT not to be deposited with the authorities, and as such provisions of Section 43B was squarely attractable. As such, the entire amount was assessed towards the income of the assessee. Held: Issue was no longer res Integra for Constitutional validity of section 43B, more particularly Clause (f) thereof, stands affirmed by Apex Court in Union of India & Ors. Exide Industries Limited & Anr. [Civil Appeal No.3545 of 2009 : 2020 TaxPub(DT) 1707 (SC)]. Undisputedly, assessee had not deposited the amount deducted as STT with the authorities, and it was not his case that the same stood paid back/returned to the person from whom it stood deducted. It was the admitted case of assessee that since he was adopting the mercantile system of accounting, he was not supposed to take any action. Even on this count, the orders cannot be said to be perverse and illegal warranting interference by this Court.
Followed:UOI & Ors. v. Exide Industries Ltd. & Anr. [Civil Appeal No.3545 of 2009] : 2020 TaxPub(DT) 1707 (SC) CIT v. Mcdowell & Co. Ltd. (2009) 10 SCC 755 : 2009 TaxPub(DT) 1725 (SC)Relied:Allied Motors Private Ltd. v. CIT (1997) 3 SCC 472 : 1997 TaxPub(DT) 1147 (SC) Chowringhee Sales Bureau Pvt. Ltd. v. CIT (1973) 1 SCC 46 : 1973 TaxPub(DT) 0363 (SC) CIT v. Noble And Hewitt (I) Pvt. Ltd. (2008) 305 ITR 324 (Delhi) : 2008 TaxPub(DT) 0983 (Del-HC) CIT v. Everest Litho Press (2006) 285 ITR 297(Madras) : 2006 TaxPub(DT) 1266 (Mad-HC) CIT v. India Carbon Ltd. (2003) 262 ITR 327 (Gau) : 2003 TaxPub(DT) 1301 (Gau-HC) India Carbon Limited v. Inspecting Assistant Commissioner Of Income-Tax And Anr. (1993) 200 ITR 759 (Gau) : 1993 TaxPub(DT) 0684 (Gau-HC)
REFERRED :
FAVOUR : In assessee's favour
A.Y. : 2006-07
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