INDUSTRIAL CONSULTING BUREAU (P.) LTD. VS COMMISSIONER OF INCOME-TAX
2001 P T D 524
[239 I T R 151]
[Bombay High Court (India)]
Before Dr. B. P. Saraf and D. G. Deshpande, JJ
INDUSTRIAL CONSULTING BUREAU (P.) LTD
versus
COMMISSIONER OF INCOME‑TAX
Income‑tax Reference No.382 of 1987, decided on 29/04/1999.
(a) Income‑tax‑‑‑
‑‑‑‑Deduction‑‑‑Draft assessment order‑‑‑Revised return‑‑‑Deduction claimed in revised return after passing of draft assessment order‑‑‑Cannot be entertained‑‑‑Indian Income Tax Act, 1961, S. 144B.
The Tribunal was not right in holding that the claim for deduction under section 80MM of the Income Tax Act, 1961, made in the revised return filed by the assessee after passing of the draft assessment order under section 144B, was valid in law for being considered on the merits.
Panchamahal Steel Ltd. v. U.A. Joshi, ITO (1997) 225 ITR 458 (SC) fol.
(b) Income‑tax‑‑‑
‑‑‑‑Deductions‑‑‑House property‑‑‑Municipal taxes pertaining to earlier year, paid in assessment year in question‑‑‑Cannot be allowed‑‑‑Indian Income Tax Act, 1961, S.24.
Where, admittedly, the municipal taxes amounting to Rs.15,328 which the assessee paid during the accounting year ending on March 31, 1978, relevant to the assessment year 1979‑80 pertained to the period from April 1, 1976 to April 1, 1977, and the demand in respect of the same was also made by the society on June 21, 1977:
Held, that the liability was incurred by the assessee not in the previous year relevant to the assessment year under consideration, i.e., 1979‑80, but in the earlier year, and the same was not allowable as a statutory deduction in the computation of income from house property of the previous year relevant to the assessment year 1979‑80.
D.P. Desai instructed by Manilal Kher Ambalal & Co. for the Assessee
R.V. Desai with T.C. Kaushik for the Commissioner.
JUDGMENT
DR. B.P. SARAF, J.‑‑‑By this reference under section 256(1) of the Income Tax Act, 1961, the Income‑tax Appellate Tribunal, Mumbai, has referred the following two questions of law to this Court for opinion.
At the instance of the assessee:
"(1) Whether, on the facts and in the circumstances of the case, the Tribunal was correct in holding that municipal taxes of Rs.15,328 paid by the assessee during this accounting year ending on June 30, 1978, was not allowable as statutory deduction while computing its income from house property on the reason that the taxes pertained for a period from April 1, 1976 to April 1, 1977; and the liability had been incurred prior to the accounting period relevant to the assessment year 1979‑80?"
At the instance of the Revenue:
"(2) Whether, on the facts and in the circumstances of the case, the ,Tribunal was right in holding that the claim for deduction under section 80MM made in the revised return filed by the assessee after passing of the draft assessment order under section 144B, was valid in law for being considered its eligibility on merits?"
So far as the controversy in the second question is concerned, the shine is covered by the decision of the Supreme Court in Panchamahal Steel Ltd. v. U.A. Joshi, ITO (1997) 225 ITR 458 in favour of the Revenue. Following the same, question No.2 is answered in the negative, i.e., in favour of the Revenue and against the assessee.
So far as the first question is concerned, the uncontroverted factual position is that the municipal taxes amounting to Rs.15,328 which the assessee paid during the accounting year ending on March 31, 1978, relevant to the assessment year 1979‑80 pertained to the period from April 1, 1976 to April 1, 1977. There is also no dispute about the fact that the demand in respect of the same was also made by the society on June 21, 1977. Thus, neither the demand was made in the accounting year relevant to the assessment year under consideration, nor the liability pertained to the said accounting year. That being so, the liability was incurred by the assessee not in the previous year relevant to the assessment year under consideration, i.e., 1979‑80, but in the earlier year. The Tribunal was right in holding that the above amount was not allowable as a statutory deduction in the computation of income from house property of the previous year relevant to the assessment year 1979‑80. Accordingly, we answer this question in the affirmative, i.e., in favour of the Revenue and against the assessee.
Reference is disposed of accordingly with no order as to costs.
Certified copy expedited.
M.B.A./205/FCOrder accordingly.