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1 - 10 of 30 (0.37 seconds)Commr.Of Income Tax vs M/S Alom Extructions Limited on 25 November, 2009
26. The question, whether benefit under Section 43B,
as a result of amendment of Finance Act, 2003, is
retrospective or not, came to be considered in
Commissioner of Income Tax Vs Alom Extrusions
Ltd. (supra). Court considered the intent, purpose
and object in the historical back drop of insertion of
Section 43B and its progress by way of various
amendments. Referring Section 2(24)(x) it said,
income is defined under Section 2(24) which includes
profits and gains. Further in clause (x) of Section 2(24)
any sum received by Assessee from employees as
'contributions' to any provident fund/superannuation
fund or any fund set up under Act 1948, or any other
fund for welfare of such employees constitute
'income'. This is the reason why every Assessee/
Employer was entitled to deduction even prior to
April, 1, 1984, keeping books on mercantile system of
accounting, as a business expenditure, by making
provision in his books of account in that regard.
Assessee was capable of keeping money with him
and just by mentioning in accounts, was able to claim
deduction as business expenses. Section 43B was
inserted to check this practice and it resulted in
discontinuing mercantile system of accounting with
regard to tax, contributions etc. With induction of
Section 43B an Assessee could claim deduction on
actual payment basis. By Finance Act, 1988
Parliament inserted first proviso w.e.f. 01.04.1988
which inter alia provides that any sum payable by
Assessee by way of tax, duty, cess or fee, if payment
is made after closing of accounting year but before
date of filing of Return under Section 139(1), Assessee
would be entitled to deduction on actual payment
basis. This proviso did not include within its ambit,
contributions under labour welfare statutes. By
Finance Act, 1988, Second Proviso thus Second
proviso was further amended by Finance Act, 1989
w.e.f. 01.04.1989.