By K. B. BHUJLE, Advocate
CIT vs. Sunil Vishwambharnath Tiwari; 388
ITR 630 (Bom):
The Assessee was eligible for deduction u/s.
80IB(10) and the same was allowed. In the A. Y. 2006-07, the Assessing Officer
made certain disallowances u/s. 40(a)(ia) of the Act, on account of non
deduction of tax at source and also did not allow deduction u/s. 80IB(10) in
respect of the increased income of the project. The Commissioner (Appeals) and
the Tribunal allowed the assessee’s full claim.
On appeal by the Revenue, the Bombay High
Court upheld the decision of the Tribunal and held as under:
“i) In view of the scheme of
section 40 deduction of tax at source was not effected by the assessee and
payment to contractors could not be deducted as the expenditure became
inadmissible. The expenditures were added back to the income being eligible
income. This income eligible for deduction in terms of section 80IB(10) only
increased by the figure of disallowed expenditure.
ii) The Commissioner(Appeals)
had rightly pointed out that the deduction allowable u/s. 80IB(10) of the Act,
was with reference to assessee’s gross total income. Hence disallowance u/s.
40(a)(ia) cannot be treated separately and it got added back to the gross total
income of the asessee.
iii) Section 40 pointed out
that due to error of the assessee, such expenditure could not be deducted while
computing the income chargeable under the head ”Profit and gains of business or
profession”. That was the only limited effect of the lapse on the part of the
assessee. The Appellate Tribunal had considered these facts and upheld them. No
substantial question of law arose for consideration.”
