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Friday, May 26, 2017

the word 'payable' in Section 40(a)(ia) would mean only when the amount is payable and not when it is actually paid. Grammatically, it may be accepted that the two words, i.e. 'payable' and 'paid', denote different meanings. = The liability to deduct tax at source under the provisions of Chapter XVII is mandatory. A person responsible for paying any sum is also liable to deposit the amount in the Government account. All the sections in Chapter XVII-B require a person to deduct the tax at source at the rates specified therein. The requirement in each of the sections is preceded by the word “shall”. The provisions are, therefore, mandatory. There is nothing in any of the sections that would warrant our reading the word “shall” as “may”. The point of time at which the deduction is to be made also establishes that the provisions are mandatory. For instance, under Section 194C, a person responsible for paying the sum is required to deduct the tax “at the time of credit of such sum to the account of the contractor or at the time of the payment thereof. ……”= In view of the aforesaid discussion, we hold that the view taken by the High Courts of Punjab & Haryana, Madras and Calcutta is the correct view and the judgment of the Allahabad High Court in CIT v. Vector Shipping Services (P) Ltd., (2013) 357 ITR 642 did not decide the question of law correctly. Thus, insofar as the judgment of the Allahabad High Court is concerned, we overrule the same. Consequences of the aforesaid discussion will be to answer the question against the appellant/assessee thereby approving the view taken by the High Court.

                                                                  REPORTABLE

                        IN THE SUPREME COURT OF INDIA

                        CIVIL APPELLATE JURISDICTION


                        CIVIL APPEAL NO. 5512 OF 2017


|M/S. PALAM GAS SERVICE                         |.....APPELLANT(S)         |
|VERSUS                                         |                          |
|COMMISSIONER OF INCOME TAX                     |.....RESPONDENT(S)        |


                               J U D G M E N T
A.K. SIKRI, J.

            The neat question which arises for consideration in this  appeal
relates to the interpretation of Section 40(a)(ia) of the  Income  Tax  Act,
1961 (hereinafter referred to as the 'Act'). Section 197C  of  the  Act  has
also some bearing on the issue involved.

Section 40 of the Act  enumerates  certain  situations  wherein  expenditure
incurred by the assessee, in  the  course  of  his  business,  will  not  be
allowed to be deducted in computing the income  chargeable  under  the  head
'Profits and Gains from Business or Profession'.  One  such  contingency  is
provided in clause (ia) of sub-section (a) of  Section  40.  This  provision
reads as under:
“S. 40 - Amounts not deductible:

Notwithstanding anything to  the  contrary  in  Sections  30  to  [38],  the
following amounts shall not be deducted in computing the  income  chargeable
under the head “Profits and gains of business or profession”,—

                         xxx         xxx        xxx

(ia)  any interest, commission or brokerage, fees for professional  services
or fees for technical services payable to a resident, or amounts payable  to
a contractor or sub-contractor, being resident for  carrying  out  any  work
(including supply of labour for carrying out any  work),  on  which  tax  is
deductible at source  under  Chapter  XVII-B  and  such  tax  has  not  been
deducted or, after deduction, has not been paid during  the  previous  year,
or in the subsequent year before the expiry of  the  time  prescribed  under
sub-section (1) of Section 200;

Provided that where in respect of any such sum, tax  has  been  deducted  in
any subsequent year or has been deducted in the previous year  but  paid  in
any subsequent year after the expiry  of  the  time  prescribed  under  sub-
section (1) of section 200, such sum shall be  allowed  as  a  deduction  in
computing the income of the previous year in which such tax has been paid.

                            xxx   xxx        xxx”


As per clause (ia), certain payments made, which  includes  amounts  payable
to a contractor or sub-contractor, would not be allowed  as  expenditure  in
case the tax is deductible at source  on  the  said  payment  under  Chapter
XVIIB of the Act and such tax has not been  deducted  or,  after  deduction,
has not been paid during the previous year or in the subsequent year  before
the expiry of the time prescribed under sub-section (1) of  Section  200  of
the Act.  In the instant case, certain payments were made by  the  appellant
assessee, in the Assessment Year 2006-2007 but the tax  at  source  was  not
deducted and deposited. We may point out here itself  that  as  per  Section
194C of the Act, payments to contractors and sub-contractors are subject  to
tax deduction at source.  The Income Tax Department/Revenue has,  therefore,
not allowed the amounts paid  to  the  sub-contractors  as  deduction  while
computing the income chargeable to tax at the hands of the assessee  in  the
said Assessment Year.

It can be seen that Section 40(a)(ia) uses the expression 'payable'  and  on
that basis the question which is raised for consideration is:
“Whether the provisions of Section 40(a)(ia) shall  be  attracted  when  the
amount is not 'payable' to a  contractor  or  sub-contractor  but  has  been
actually paid?"


Some facts which will have  bearing  on  the  aforesaid  issue  need  to  be
mentioned at this stage:
      The appellant-assessee is engaged in  the  business  of  purchase  and
sale of LPG cylinders under the name and style of M/s. Palam Gas Service  at
Palampur.  During the course of assessment proceedings, it  was  noticed  by
the Assessing Officer that the main contract of the  assessee  for  carriage
of LPG was with  the  Indian  Oil  Corporation,  Baddi.   The  assessee  had
received the total freight payments from  the  IOC  Baddi  to  the  tune  of
Rs.32,04,140/-.  The assessee had, in turn, got the  transportation  of  LPG
done through three persons, namely, Bimla Devi, Sanjay  Kumar  and  Ajay  to
whom he  made  the  freight  payment  amounting  to  Rs.  20,97,689/-.   The
Assessing Officer observed that the assessee had made  a  sub-contract  with
the said three persons within the meaning of Section 194C of  the  Act  and,
therefore, he was liable to deduct tax at source from  the  payment  of  Rs.
20,97,689/-.  On account of his failure to do so the said  freight  expenses
were disallowed by the Assessing Officer as per the  provisions  of  Section
40(a)(ia) of the Act.  Against the  order  of  the  Assessing  Officer,  the
assessee  preferred  an  appeal  before  the  Commissioner  of  Income   Tax
(Appeals), Shimla who vide its order dated August 17, 2012 upheld the  order
dated November 30, 2011.  The matter thereafter came  up  in  appeal  before
the Income Tax Appellate Tribunal (for short ‘ITAT’) which too met with  the
same fate.
      In further appeal to the High Court under Section  260A  of  the  Act,
the outcome remained unchanged as the High Court of  Himachal  Pradesh  also
dismissed the appeal affirming the order of the ITAT.

It may be pertinent to observe that the question raised now  and  formulated
above was specifically raised before the authorities  below,  including  the
High Court.

The question is, as noted above, when the word used in Section 40(a)(ia)  is
'payable', whether this Section would cover only those  contingencies  where
the amount is due and still payable or it would also  cover  the  situations
where the amount is already paid but no advance tax was deducted  thereupon.
 This issue has come up for hearing before various  High  Courts  and  there
are divergent views of the High Courts there upon.  In  fact,  most  of  the
High Courts have taken the view that the  aforesaid  provision  would  cover
even those cases where the amount stands paid.  This  is  the  view  of  the
Madras, Calcutta and Gujarat High Courts.  Contrary view  is  taken  by  the
Allahabad High Court.  In a recent  judgment,  the  Punjab  &  Haryana  High
Court took note of the judgments of the aforesaid High Courts and  concurred
with the view taken by the Madras, Calcutta  and  Gujarat  High  Courts  and
showed its reluctance to follow the view taken by the Allahabad High  Court.


In this scenario, we would like to first discuss the reasons  given  by  the
High Courts in two sets of judgments, arriving  at  a  contrary  conclusion.
Before that, we would also like to reproduce relevant  portions  of  Section
194C and 200 of the Act as well as Rule  30(2)  of  the  Income  Tax  Rules,
since they are also relevant to decide the  controversy.   These  provisions
make the following reading:
194-C. Payments to contractors.—(1) Any person responsible for  paying  any
sum  to  any  resident  (hereafter  in  this  section  referred  to  as  the
contractor) for carrying out  any  work  (including  supply  of  labour  for
carrying out any work) in pursuance of a  contract  between  the  contractor
and a specified person shall, at the time of  credit  of  such  sum  to  the
account of the contractor or at the time of payment thereof in  cash  or  by
issue of a cheque or draft or by  any  other  mode,  whichever  is  earlier,
deduct an amount equal to—
.……… ……. …… ………

200. Duty of person deducting tax.—(1)  Any  person  deducting  any  sum  in
accordance with the foregoing provisions of this chapter] shall  pay  within
the prescribed time, the sum so  deducted  to  the  credit  of  the  Central
Government or as the Board directs.

(2)  Any person being an  employer,  referred  to  in  subsection  (1-A)  of
Section 192 shall pay, within the prescribed time, the tax to the credit  of
the Central Government or as the Board directs.

(3)  Any person deducting any sum on or after the 1st day of April, 2005  in
accordance with the foregoing provisions of this chapter  or,  as  the  case
may be, any person being an employer referred to  in  sub-section  (1-A)  of
Section 192 shall, after paying the  tax  deducted  to  the  credit  of  the
Central Government within the prescribed time, prepare such  statements  for
such period as may be prescribed] and deliver or cause to  be  delivered  to
the prescribed income  tax  authority  or  the  person  authorised  by  such
authority such statement in such  form  and  verified  in  such  manner  and
setting forth such particulars and within such time as may be prescribed.”


Rule 30(2) of the Income Tax Rules which stipulates the time prescribed  for
payment of the tax deducted to the  credit  of  the  Central  Government  as
required by Section 200(1) and relevant portion thereof reads as under:
“Time and mode of payment to Government account of tax  deducted  at  source
or tax paid under sub-section (1A) of section 192.

30(1) All sums deducted in accordance with the provisions of Chapter  XVII-B
by an office of the Government shall be paid to the credit  of  the  Central
Government-
.….. ………. …….. ……..

(2) All sums deducted in accordance with the provisions  of  Chapter  XVII-B
by deductors other than an office of the Government shall  be  paid  to  the
credit of the Central Government-

 on or before 30th day of April where the income or amount  is  credited  or
paid in the month of March; and
in any other case, on or before seven days from the  end  of  the  month  in
which-
the deduction is made; or
income-tax is due under sub-section(1A) of section 192.”

As per Section 194C, it is the statutory obligation  of  a  person,  who  is
making payment to the sub-contractor, to deduct tax at source at  the  rates
specified therein.  Plain language of the Section suggests that such  a  tax
at source is to be deducted at the  time  of  credit  of  such  sum  to  the
account of the contract or at the time  of  payment  thereof,  whichever  is
earlier. Thus, tax has to be deducted in both the  contingencies,  namely  ,
when the amount is credited to the account of the  contractor  or  when  the
payment is actually made. Section 200 of the Act imposes further  obligation
on the person deducting tax at source, to deposit the same with the  Central
Government or as the Board directs, within the prescribed time.
      A conjoint reading of these two Sections would suggest that  not  only
a person, who is paying to the contractor, is  supposed  to  deduct  tax  at
source on the said  payment  whether  credited  in  the  account  or  actual
payment made, but also deposit that amount to  the  credit  of  the  Central
Government within the stipulated time.  The time within  which  the  payment
is to be deposited with the Central Government is mentioned  in  Rule  30(2)
of the Rules.

The Punjab & Haryana High Court in P.M.S. Diesels & Ors. v. Commissioner  of
Income Tax – 2, Jalandhar &  Ors.,  (2015)  374  ITR  562,  has  held  these
provisions to be mandatory in nature with the following observations:
“13.  The liability to deduct tax at source under the provisions of  Chapter
XVII is mandatory. A person responsible for paying any sum  is  also  liable
to deposit the amount  in  the  Government  account.  All  the  sections  in
Chapter XVII-B require a person to deduct the tax at  source  at  the  rates
specified therein. The requirement in each of the sections  is  preceded  by
the word  “shall”.  The  provisions  are,  therefore,  mandatory.  There  is
nothing in any of the sections that  would  warrant  our  reading  the  word
“shall” as “may”. The point of time at which the deduction  is  to  be  made
also establishes that the provisions  are  mandatory.  For  instance,  under
Section 194C, a person responsible for paying the sum is required to  deduct
the tax “at the time of credit of such sum to the account of the  contractor
or at the time of the payment thereof. ……”


While holding the aforesaid view, the Punjab & Haryana High Court  discussed
the judgments of the Calcutta and Madras High Courts, which  had  taken  the
same view, and concurred with the same, which is clear  from  the  following
discussion contained in the judgment of the Punjab & Haryana High Court:
“14. A Division Bench of the Calcutta High Court in Commissioner  of  Income
Tax v. Crescent Export Syndicate, (2013) 216 Taxman 258 (Calcutta) held:-

“13.…………… ……………… ……………

The term ‘shall’ used in all these sections make it  clear  that  these  are
mandatory provisions and applicable to the  entire  sum  contemplated  under
the respective sections. These sections do not  give  any  leverage  to  the
assessee to make the payment  without  making  TDS.  On  the  contrary,  the
intention of the legislature  is  evident  from  the  fact  that  timing  of
deduction of tax is earliest possible opportunity to recover tax, either  at
the time of credit in the account of payee or at  the  time  of  payment  to
payee, whichever is earlier.”

15.  Ms. Dhugga invited our attention to a judgment of  the  Division  Bench
of  Madras  High  Court  in Tube  Investments  of  India   Ltd. v. Assistant
Commissioner of Income-Tax (TDS), [2010] 325 ITR  610  (Mad).  The  Division
Bench referred to the statistics placed before it by  the  Department  which
disclosed  that  TDS  collection  had  augmented  the  revenue.  The   gross
collection of advance tax, surcharge, etc. was  Rs.  2,75,857.70  crores  in
the financial year 2008-09 of which the TDS component alone constituted  Rs.
1,30,470.80  crores.  The  Division  Bench  observed  that  introduction  of
Section 40(a)(ia) had achieved the objective of  augmenting  the  TDS  to  a
substantial  extent.  The  Division  Bench  also  observed  that  when   the
provisions and procedures relating to TDS are scrupulously applied, it  also
ensured the identification of the payees thereby confirming the  network  of
assessees and that once the assessees are identified  it  would  enable  the
tax collection machinery to bring within its fold all such persons  who  are
liable to come  within  the  network  of  tax  payers.  These  objects  also
indicate the legislative intent that the requirement  of  deducting  tax  at
source is mandatory.

16.  The liability to deduct tax at source is, therefore, mandatory.”


The aforesaid interpretation of Sections 194C conjointly  with  Section  200
and Rule 30(2) is unblemished and without any  iota  of  doubt.   We,  thus,
give our imprimatur to the view taken.  As would be  noticed  and  discussed
in little detail hereinafter, the Allahabad High Court,  while  interpreting
Section 40(a)(ia), did not deal with this aspect at all, even when it has  a
clear bearing while considering the amplitude of the said provision.

In the aforesaid backdrop, let us now deal with the issue, namely, the  word
'payable' in Section 40(a)(ia) would mean only when the  amount  is  payable
and not when it is actually paid. Grammatically, it  may  be  accepted  that
the two words, i.e. 'payable' and 'paid',  denote  different  meanings.  The
Punjab & Haryana High Court, in P.M.S. Diesels & Ors.,  referred  to  above,
rightly remarked that the word 'payable'  is, in fact,  an  antonym  of  the
word 'paid'.   At  the  same  time,  it  took  the  view  that  it  was  not
significant to the interpretation of  Section  40(a)(ia).   Discussing  this
aspect further, the Punjab  &  Haryana  High  Court  first  dealt  with  the
contention of the assessee that Section  40(a)(ia)  relates  only  to  those
assessees who follow the mercantile system and  does  not  cover  the  cases
where the assessees follow the cash system. Those  contention  was  rejected
in the following manner:
“19. There is nothing that persuades  us  to  accept  this  submission.  The
purpose of the section  is  to  ensure  the  recovery  of  tax.  We  see  no
indication in the section that this object was confined to the  recovery  of
tax from a particular type of assessee or assessees following  a  particular
accounting practice. As far as this provision is concerned,  it  appears  to
make no difference to the Government as to the  accounting  system  followed
by the assessees. The Government is interested in the recovery of taxes.  If
for some reason, the Government was interested in ensuring the  recovery  of
taxes only from assessees following the mercantile  system,  we  would  have
expected the provision to so stipulate clearly, if not expressly. It is  not
suggested that assessees following the cash system are not liable to  deduct
tax at source. It is not suggested that the provisions of Chapter XVII-B  do
not apply to assessees following  the  cash  system.  There  is  nothing  in
Chapter XVII-B either that suggests otherwise.

20.  Our view is fortified by the Explanatory Note to Finance Bill  (No.  2)
of 2004. Sub-clause (ia) of clause (a) of Section 40 was introduced  by  the
Finance Bill (No. 2) of 2004 with effect from  01.04.2005.  The  Explanatory
Note to Finance Bill-2004 stated:-

“….. ….. ….. ….. ..
With a view to augment compliance of  TDS  provisions,  it  is  proposed  to
extend  the  provisions  of  section  40(a)(i)  to  payments  of   interest,
commission  or  brokerage,  fees  for  professional  services  or  fees  for
technical services to residents, and payments to a  resident  contractor  or
sub-contractor for carrying out any work (including  supply  of  labour  for
carrying out any work),  on  which  tax  has  not  been  deducted  or  after
deduction, has not been paid before the expiry of the time prescribed  under
sub-section(1) of section 200 and in accordance with  the  other  provisions
of Chapter XVII-B. ……”

21.  The adherence to the provisions ensures not merely  the  collection  of
tax but also enables the authorities to bring within  their  fold  all  such
persons who are liable to  come  within  the  network  of  tax  payers.  The
intention was to ensure the collection of tax irrespective of the system  of
accounting followed by the assessees. We do not see how  this  dual  purpose
of augmenting the  compliance  of  Chapter  XVII  and  bringing  within  the
Department's fold tax payers  is  served  by  confining  the  provisions  of
Section 40(a)(ia) to assessees who follow the mercantile system. Nor  do  we
find anything that indicates that for some reason the  legislature  intended
achieving these objectives  only  by  confining  the  operation  of  Section
40(a)(ia) to assessees who follow the mercantile system.

22.  The same view was taken by a Division Bench of the Calcutta High  Court
in Commissioner of Income Tax v. Crescent Export Syndicate, (supra). It  was
held:-

“12.3. It is noticeable that Section 40(a)  is  applicable  irrespective  of
the method of accounting followed by an assessee. Therefore,  by  using  the
term  ‘payable’  legislature  included  the  entire  accrued  liability.  If
assessee was following mercantile system  of  accounting,  then  the  moment
amount was credited to the account of payee on  accrual  of  liability,  TDS
was required to be made  but  if  assessee  was  following  cash  system  of
accounting, then on making payment TDS was to be made as the  liability  was
discharged by making payment. The TDS provisions are applicable both in  the
situation of actual payment as well of the credit of the amount. It  becomes
very clear from the fact that the phrase, ‘on which  tax  is  deductible  at
source under Chapter XVII-B’, was not there in the Bill but incorporated  in
the Act. This was not without any purpose.”


We approve the aforesaid view as well.  As a  fortiorari,  it  follows  that
Section 40(a)(ia) covers not only those cases where the  amount  is  payable
but also when it is paid. In this behalf,  one  has  to  keep  in  mind  the
purpose with which Section 40 was enacted and that has  already  been  noted
above. We have also to keep in mind the  provisions  of  Sections  194C  and
200.  Once it is found that the  aforesaid  Sections  mandate  a  person  to
deduct tax at source not only on the amounts payable but also when the  sums
are actually paid to the contractor, any person who does not adhere to  this
statutory obligation has to suffer the consequences which are stipulated  in
the Act itself.  Certain consequences of failure to  deduct  tax  at  source
from the payments made, where tax was to be deducted at  source  or  failure
to pay the same to the credit of the Central Government, are  stipulated  in
Section 201 of the Act.  This Section provides  that  in  that  contingency,
such a person would be deemed to be an assessee in  default  in  respect  of
such tax.  While stipulating this  consequence,  Section  201  categorically
states that the aforesaid Sections would be without prejudice to  any  other
consequences  which  that  defaulter  may  incur.   Other  consequences  are
provided under Section 40(a)(ia) of the Act, namely, payments made  by  such
a person to a contractor shall not be  treated  as  deductible  expenditure.
When read in this context, it is clear that  Section  40(a)(ia)  deals  with
the nature of default and the consequences thereof.   Default  is  relatable
to Chapter  XVIIB  (in  the  instant  case  Sections  194C  and  200,  which
provisions are  in  the  aforesaid  Chapter).  When  the  entire  scheme  of
obligation to deduct the tax at source and paying it  over  to  the  Central
Government is read holistically, it cannot be held that the  word  'payable'
occurring in Section 40(a)(ia) refers to only those cases where  the  amount
is yet to be paid and does not cover the cases where the amount is  actually
paid. If the provision  is  interpreted  in  the  manner  suggested  by  the
appellant herein, then even when  it  is  found  that  a  person,  like  the
appellant, has violated the provisions of  Chapter  XVIIB  (or  specifically
Sections 194C and 200 in the instant case), he would  still  go  scot  free,
without suffering the consequences of such  monetary  default  in  spite  of
specific provisions laying down these consequences.  The  Punjab  &  Haryana
High Court has exhaustively interpreted Section  40(a(ia)  keeping  in  mind
different aspects. We would again quote the following  paragraphs  from  the
said judgment, with our complete approval thereto:
“26.  Further, the mere  incurring  of  a  liability  does  not  require  an
assessee to deduct the tax at source even if such payments, if  made,  would
require an assessee to deduct the tax at source.  The  liability  to  deduct
tax at source under Chapter XVII-B arises only upon payments being  made  or
where so specified under  the  sections  in  Chapter  XVII,  the  amount  is
credited to the account of the payee.  In  other  words,  the  liability  to
deduct tax at source arises not on account of the assessee being  liable  to
the payee but only upon the liability being discharged in  the  case  of  an
assessee following the cash  system  and  upon  credit  being  given  by  an
assessee following the mercantile system. This is clear from  every  section
in Chapter XVII.

27.  Take for instance, the case  of  an  assessee,  who  follows  the  cash
system of accounting and where the assessee who though  liable  to  pay  the
contractor, fails to do so for any reason. The assessee is not  then  liable
to deduct tax at source. Take also the case of an assessee, who follows  the
mercantile system. Such an assessee may have incurred the liability  to  pay
amounts to a party. Such an assessee is also not  bound  to  deduct  tax  at
source unless he credits such sums to the account of the  party/payee,  such
as, a contractor. This is clear from  Section  194C  set  out  earlier.  The
liability to deduct tax at source, in the case of an assessee following  the
cash system, arises only when the payment is made and  in  the  case  of  an
assessee following the mercantile system, when he credits such  sum  to  the
account of the party entitled to receive the payment.

28.  The government has nothing to do with the dispute between the  assessee
and the payee such as a contractor. The  provisions  of  the  Act  including
Section 40 and the provisions  of  Chapter  XVII  do  not  entitle  the  tax
authorities to adjudicate the liability of an assessee to  make  payment  to
the payee/other contracting party. The appellant's submission, if  accepted,
would require an adjudication by the tax authorities as to the liability  of
the assessee to make payment. They would then  be  required  to  investigate
all the records of an assessee to ascertain its liability to third  parties.
This could in many cases be an extremely complicated task especially in  the
absence of the third party. The third party may not  press  the  claim.  The
parties may settle the dispute,  if  any.  This  is  an  exercise  not  even
remotely required or even contemplated by the section.”


As mentioned above, the Punjab & Haryana High Court found support  from  the
judgments of the Madras and Calcutta High Courts taking identical  view  and
by extensively quoting from the said judgments.

Insofar as judgment of  the  Allahabad  High  Court  is  concerned,  reading
thereof would reflect that the High Court,  after  noticing  the  fact  that
since the amounts had already been paid, it straightaway concluded,  without
any discussion, that Section 40(a)(ia) would apply only when the  amount  is
'payable' and dismissed the  appeal  of  the  Department  stating  that  the
question of law framed did not  arise  for  consideration.   No  doubt,  the
Special Leave Petition thereagainst was dismissed by this Court  in  limine.
However, that would not amount to confirming the view of the Allahabad  High
Court (See V.M. Salgaocar & Bros. (P) Ltd. v. Commissioner  of  Income  Tax,
(2000) 243 ITR 383 and Supreme Court Employees Welfare Association v.  Union
of India, (1989) 4 SCC 187.

In view of the aforesaid discussion, we hold that  the  view  taken  by  the
High Courts of Punjab & Haryana, Madras and Calcutta  is  the  correct  view
and the judgment of the Allahabad High  Court  in  CIT  v.  Vector  Shipping
Services (P) Ltd., (2013) 357 ITR 642 did not decide  the  question  of  law
correctly.  Thus, insofar as the judgment of the  Allahabad  High  Court  is
concerned, we overrule the same. Consequences of  the  aforesaid  discussion
will be to  answer  the  question  against  the  appellant/assessee  thereby
approving the view taken by the High Court.

The appeal is, accordingly, dismissed with costs.


                             .............................................J.
                                                                (A.K. SIKRI)



                             .............................................J.
                                                             (ASHOK BHUSHAN)

NEW DELHI;
MAY 03, 2017.

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