MARAL OVERSEAS LTD, WEST NIRMAR vs. DCIT CENTRAL CIRCLE-31, NEW DELHI

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ITA 325/DEL/2021Status: DisposedITAT Delhi17 May 2023AY 2017-184 pages

In favour of the Revenue: the assessee's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that education cess is not an allowable deduction as an expenditure under Section 37 read with Section 40(a)(ii) of the Income Tax Act. This decision is based on a Supreme Court judgment.

What were the facts?

The assessee claimed education cess as a deductible expenditure. The CIT(A) rejected this claim. The assessee appealed to the ITAT.

What were the issues?

Whether education cess paid by the assessee is an eligible deduction under the Income Tax Act.

Which sections of the Income-tax Act were involved?

Section 37,Section 40(a)(ii)

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

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Income Tax Appellate Tribunal, DELHI BENCH ‘E’: NEW DELHI

For Appellant: Mr. Satyajeet Goel, CA
For Respondent: Ms. Sarita Kumari, CIT-DR
Hearing: 11/05/2023Pronounced: 17/05/2023

Heard together (2 matters)

ITA No.323/Del/2021
ITA No.325/Del/2021

Read from the judgment's own cause title. This page is filed under one of them.

ORDER PER BENCH: The captioned appeals have been filed by Assessee against the separate orders dated 16/09/2020, 17/09/2020, 02/09/2020 to 325/Del/2021 Maral Overseas Ltd. vs. DCIT and 02/09/2020 passed by the Learned Commissioner of Income Tax (Appeals)-30, New Delhi [“Ld. CIT(A)”, for short], for Assessment Years 2014-15, 2015-16, 2016-17 and 2017-18 respectively.

2.

Since, the issues involved in all these appeals are common in nature; hence, they are clubbed together heard together and disposed off by this common and consolidate order for the sake of convenience.

3.

The common grounds raised by assessee in all these appeals except variance of amount which are as under:

1.

“1(i). That on the facts and circumstances of the case, the Ld. Cit(A) was not justified in rejecting the claim of education cess of Rs.3,85,065/- even through same is eligible deduction under the provisions of the Income tax Act, 1961.

(ii) That in absence of any prohibition or restriction in the Income tax Act regarding claim of education.

(iii) That education cess paid during the year being an eligible deduction u/s 37(1) of the Act and also liable to adjusted from book profit u/s 115JB, the rejection of claim is illegal and not in accordance with law.

(iv) That the decision of Ld.CIT(A) is contrary to settled legal position ad scheme of the Income Tax Act. 2. The orders passed by Lower Authorities are not justified on facts and are bad in law.” to 325/Del/2021 Maral Overseas Ltd. vs. DCIT 4. In all the four appeals the issue in dispute is whether the Ld.CIT(A) is right in rejecting the claim of education cess which has been claimed as deductable under provisions of the Income Tax Act.

5.

The Ld. DR submitted that the issues involved in the above appeals are no more res integra in view of the judgment of Hon'ble Supreme Court of India in the case of Joint Commissioner of Income Tax Vs. Chambal Fertilizers and Chemicals Ltd. reported in (2022) 145 Taxman.com 420 (S.C). The Ld. Counsel for the assessee has also agreed that the only issues involved in the present appeal is regarding education cess which has been decided against the assessee by the Hon'ble Supreme Court in the case of JCIT Vs. Chambal Fertilizers (Supra) wherein the appeal filed by the Department and held that the education cess paid by the Assessee would not be allowed as an expenditure under Section 37 read with Section 40(a) (ii) of the IT Act.

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