SAMLA COLLIERIES LTD Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THESE four applications have been consolidated for the sake of convenience inasmuch as a common question of law has arisen in these applications.

(2.) WE need not deal with the views of the ITO or the AAC, but may straightaway mention that the Tribunal held that so far as the amount paid on account of royalty-holders was concerned, that was allowable for deduction, but the amounts paid as cess were excluded because of s. 10(4) of the IT Act. The point arises as follows : The road and P. W. D. cess are paid under the Bengal Cess Act, being Act IX of 1880. The relevant sections are ss. 5 and 6, which run as follows :

(3.) READING these provisions together, it has been held that the amounts paid as cess for road and P. W. D. as also the education cess are excluded by the provisions of sub-s. (4) of s. 10. It is conceded that the matter does not come under cl. (ix) of sub-s. (2). It would come under cl. (xv) unless it is excluded by the proviso. The proviso seems to be without complication and excludes allowances of any sum paid on account of any cess levied on the profits or gains of any business. I have already mentioned that the assessee in this case carries on a mining business which consists of raising coal from the mines and selling the same. I do not see how it can be argued that the profit which is gained by raising the coal and selling the same does not come within the provisions of the Cess Act or the Education Cess Act or is not within the ambit of sub-s. (4) of s. 10.