1 Kerala State Beverages Manufacturing & Marketing Corporation Ltd. vs. The Assistant Commissioner of Income Tax
(2022) 440 ITR 492 (SC)
Disallowance under section 40(a)(iib) of the Income-tax Act, 1961 - The gallonage fee, licence fee and shop rental (kist) with respect to FL-9 and FL-1 licences granted to the State Govt. Undertakings would squarely fall within the purview of Section 40(a)(iib) of the Income-tax Act, 1961 - The surcharge on sales tax and turnover tax, is not a fee or charge coming within the scope of Section 40(a)(iib)(A) or 40(a)(iib)(B), as such same is not an amount which can be disallowed under the said provision.
For A.Y. 2014-2015, the Deputy Commissioner of Income Tax finalised the Appellant’s income assessment u/s 143(3) of the Income-tax Act, 1961 vide Assessment Order dated 14th December, 2016. The Principal Commissioner of Income Tax exercised the power of revision as contemplated u/s 263 of the Act and set aside the order of assessment on the ground that same is erroneous and is prejudicial to the interest of the revenue, to the extent it failed to disallow the debits made in the Profit & Loss Account of the Assessee, with respect to the amount of surcharge on sales tax and turnover tax paid to the State Government, which ought to have been disallowed u/s 40(a)(iib). Against the order of the Principal Commissioner, Income Tax, dated 25th September, 2018, the Appellant filed an appeal
