INCOME TAX : Surcharge on sales tax or turnover tax paid by assessee-company to State Government was not a ‘fee or charge’ coming within scope of section 40(a)(iib); review petition dismissed.

SUPREME COURT OF INDIA
Assistant Commissioner of Income-tax
v.
Kerala State Beverages Manufacturing and Marketing Corporation Ltd.*
DINESH MAHESHWARI AND HRISHIKESH ROY, JJ.
CIVIL APPEAL NO. 14 OF 2022†
DIARY NO. 26265 OF 2022
NOVEMBER 16, 2022

Section 40(a)(iib) of the Income-tax Act, 1961 – Business disallowance – Royalty, licence fee etc. (Surcharge on Sales tax) – Assessment years 2014-15 and 2015-16 – Assessee-company, engaged in wholesale and retail trade of beverages, had debited its profit and loss account with respect to amount of surcharge on sales – Assessing Officer made disallowance of such surcharge under section 40(a)(iib) – Supreme Court held that surcharge on sales tax was introduced only as an increase in tax payable and such increase could not be equated with ‘fee or charge’ and thus surcharge on sales tax or turnover tax paid by assessee-company was not ‘fee or charge’ coming within sweep of section 40(a)(iib) – Whether since no case for reviewing said impugned order was made out, instant review petition filed by revenue was to be dismissed – Held, yes [Paras 2 and 3] [In favour of assessee]

CASE REVIEW

Review petition dismissed against Kerala State Beverages Manufacturing & Marketing Corpn. Ltd. v. Asstt. CIT [2022] (SC) (para 2).

ORDER1. Delay condoned.
2. We have carefully perused the review petition as also the grounds in support thereof. In our opinion, no case for review of order/judgment dated 3-1-2022 is made out.
3. The review petition is, accordingly, dismissed.