:1: bgp bgp bgp IN IN IN THE HIGH COURT OF JUDICATURE AT BOMBAY THE HIGH COURT OF JUDICATURE AT BOMBAY THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORDINARY ORDINARY ORIGINAL CIVIL JURISDICTION ORIGINAL CIVIL JURISDICTION ORIGINAL CIVIL JURISDICTION INCOME INCOME INCOME TAX APPEAL NO.1385 OF 2007 TAX APPEAL NO.1385 OF 2007 TAX APPEAL NO.1385 OF 2007 The Commissioner of Income Tax, ..Appellant Vs. M/s.Patel Engineering Ltd. ..Respondent Mr.B.M.Chatterji a/w.P.S.Sahadevan for the Appellant. Mr.Madhur Agrawal with Mr.P.C.Tripathi i/b.Mr.A.K.Jasani for the Respondent. CORAM CORAM CORAM :- DR.S.RADHAKRISHNAN & :- DR.S.RADHAKRISHNAN & :- DR.S.RADHAKRISHNAN & S.J.KATHAWALLA, S.J.KATHAWALLA, S.J.KATHAWALLA, JJ. JJ. JJ. DATE DATE DATE : 5TH AUGUST, 2008 : 5TH AUGUST, 2008 : 5TH AUGUST, 2008 P.C. P.C. P.C. 1. Heard the learned Counsel for the parties. The Appellant is seeking to raise the following substantial questions of law in the above Appeal. a. Whether on the facts and in the circumstances of the case the Tribunal was right in law in holding that the assessee is entitled to claim deduction of payment of Technical Consultancy fee in the previous year in which tax at source is deducted even when tax so deduction is not paid to the Central Government account within the time prescribed? b. Whether on the facts and in the circumstances of the case the Tribunal was right in law in not appreciating the intention of the legislature in enacting the provisions of section 40(a)(i) which was further clarified by the amending clause by Finance Act,2003 w.e.f.1st April,2004? 2. We have perused the judgment of the Tribunal dated 11th June,2007, wherein the Tribunal has given a categorical finding relying on the judgment of the Commissioner Commissioner Commissioner of of of Income Tax Vs. Modi Olivetti Ltd. 84 Income Tax Vs. Modi Olivetti Ltd. 84 Income Tax Vs. Modi Olivetti Ltd. 84 TTJ TTJ TTJ (Del) 1038 (Del) 1038 (Del) 1038 and in paragraph No.3, the Tribunal has observed as under: 3. We have considered the rival submissions, :2: perused the materials on record and have gone through the orders of authorities below and Tribunal Judgments relied upon by learned AR of the assessee. We find that the assessment year involved in the present case is A.Y.1999-2000 and in this year provisions of section 40(a)(i) are the same as noted by the Tribunal in the case of JCIT Vs. Modi Olivetti Ltd. (Supra). Provisions of Section 40(a)(i) of the Act as it existed at the relevant point of time reads as follows: "Notwithstanding anything to the contrary in ss.30 to 38, the following amounts shall not be deducted in computing the income chargeable under the head "profits and gains of business of profession (a) in the case of any assessee- (i) any interest (not being interest on a loan issued for public subscription before the 1st day of April,1938), royalty, fees for technical services or other sum chargeable under this Act, which is payable outside India, on which tax has not been paid or deducted under Chapter-XVII-B. Provided that where in respect of any such sum, tax has been paid or deducted under Chapter XVII-B in any subsequent year, such sum shall be allowed as a deduction in computing the income of the previous year in which such tax has been paid or deducted. Explanation-For the purposes of this sub-clause. (A) ‘royalty’ shall have the same meaning as in Explanation 2 to clause (vi) of sub section (1) of section 9. (B) ‘fees for technical services’ shall have the same meaning as in Explanation 2 to clause (vii) of sub-section (1) of section 9. The provisions of section 40(a)(i) noted by the Tribunal in the case of Modi Olivetti Ltd. (Supra) on page No.1051 are same and there is no amendment in the provisions of this section till present year i.e. A.Y.1999-2000. In the present case also, the facts are same because TDS has been deducted by the assessee in the same year and it was shown as a liability as on 31/03/1999. This fact is recorded by learned CIT (A) on page No.2 of his order and the same is not in dispute. Payment of TDS was made on 29th/12/2000. In the case of Modi Olivetti Ltd. (supra) also, the facts are similar because in that case also, tax was :3: deducted by the assessee in the same year i.e. on 30/03/1991; whereas, payment of TDS was made in the month of November,1991. Deduction for the expenses was claimed by the assessee in A.Y.1991-92 and it was held by the ‘Tribunal in that case that since tax is deducted. Respectfully following this Tribunal Judgment, we decide this issue in favour of the assessee and uphold the order of learned CIT (A) in the present case since facts and legal provisions are identical as in the case of Modi Olivetti Ltd. (Supra). 3. In the aforesaid paragraph No.3, the Tribunal has made it explicitly clear that in the A.Y.1999-2000 the amendment was not effectuated and the amendment came into force only with effect from 1st April,2004. The learned Counsel for the Respondents also pointed out that the Delhi High Court has also taken a similar view in the case of Commissioner of Income Tax Vs. Commissioner of Income Tax Vs. Commissioner of Income Tax Vs. Oracle Oracle Oracle Software Software Software India Ltd. (2007) 293 ITR 353 (Delhi) India Ltd. (2007) 293 ITR 353 (Delhi) India Ltd. (2007) 293 ITR 353 (Delhi) that under Section 40(a)(i) as long as the tax was deducted within the year, the Assessee is entitled to claim the benefits. 4. So far as the second question of law is concerned, a fiscal statute, we are not concerned with the intention of the Legislature. 5. Under the aforesaid facts and circumstances of the case, we are not at all inclined to entertain the above Appeal, as there is no substantial question of law arises in the above Appeal. Hence, the same stands dismissed. (S.J.KATHAWALLA,J.) (S.J.KATHAWALLA,J.) (S.J.KATHAWALLA,J.) (DR.S.RADHAKRISHNAN,J.) (DR.S.RADHAKRISHNAN,J.) (DR.S.RADHAKRISHNAN,J.)