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The Tax PublishersI.T.(S.S.)A. No. 71/Kol/2019, C.O. No. 23/Kol/2020 (Arising out of I.T.(S.S.)A. No. 71/Kol/2019)
2021 TaxPub(DT) 0345 (Kol-Trib)INCOME TAX ACT, 1961
Section 40(a)(ii)
High Court in the case of Sesa Goa Ltd. v. Jt. CIT. 2020 TaxPub(DT) 1546 (Bom-HC)] held that 'education cess is allowable expenditure as the word 'cess' was conspicuously absent under the provision of section 40(a)(ii)', therefore, education cess cannot be treated or part of tax.
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Business disallowance under section 40(a)(ii) - Applicability of provision - Whether education cess can be said to be tax for the purposes of section 40(a)(ii) -
AO made disallowance under section 40(a)(ii) alleging that assessee had claimed education cess an expenditure whereas on or AO then cess amounted to tax. Held: This issue was covered in favour of the assessee by the decision of Chambal Fertilizers Ltd. [ITA No. 52/2018 dated 31-7-2018] wherein it was held that education cess was not a part of tax. Accordingly, the same was held as allowable as a deduction and that disallowance under section 40(a)(ii) cannot be made. High Court in the case of Sesa Goa Ltd. v. Jt. CIT. 2020 TaxPub(DT) 1546 (Bom-HC)] held that 'education cess is allowable expenditure as word 'cess' is conspicuously absent under the provision of section 40(a)(ii)'.
Followed:Chambal Fertilisers & Chemicals Ltd. v. JCIT ITA No. 52/2018 dated 31-7-2018, Sesa Goa Limited v. JCIT in ITA No. 17 & 18 of 2013 dt. 28-2-2020 : 2020 TaxPub(DT) 1546 (Bom-HC), M/s ITC Limited v. ACIT [ITA No. 685/Kol/2014, Order, dated 27-11-2018].
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2006-07
INCOME TAX ACT, 1961
Section 80-IA
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