Revenue's appeal against CIT(A) order partially allowed by ITAT on disallowance issue The appeal filed by the revenue against the order of the CIT(A)-II, Pune for A.Y. 2007-08 regarding disallowance u/s.40(a)(ia) was partly allowed for ...
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Revenue's appeal against CIT(A) order partially allowed by ITAT on disallowance issue
The appeal filed by the revenue against the order of the CIT(A)-II, Pune for A.Y. 2007-08 regarding disallowance u/s.40(a)(ia) was partly allowed for statistical purposes by the ITAT. The ITAT referred to a previous case and indicated that the second proviso to sec. 40(a)(ia) inserted by the Finance Act, 2012, might have retrospective applicability. As the facts were similar to the previous case, the matter was set aside to the Assessing Officer for further examination. The appeal was ultimately allowed for statistical purposes.
Issues: 1. Disallowance u/s.40(a)(ia) - Applicability to amounts already paid during the year.
Analysis: The appeal was filed by the revenue against the order of the Commissioner of Income Tax (Appeal)-II, Pune, for A.Y. 2007-08. The main issue raised was whether the Ld. CIT(A) was justified in deleting the disallowance u/s.40(a)(ia) by holding that TDS disallowance applies only to amounts 'payable' as on 31st March and not to amounts already paid during the year. The Authorized Representative pointed out that a similar issue was addressed by the ITAT, Cochin Bench in a previous case. The ITAT observed that the second proviso to sec. 40(a)(ia) of the Act, inserted by the Finance Act, 2012, might have retrospective applicability. The ITAT set aside the matter to the Assessing Officer for further examination, indicating that the appeal was partly allowed for statistical purposes.
The ITAT noted that nothing contrary was presented on behalf of the revenue, and since the facts were similar to the previous case, the matter was also set aside to the Assessing Officer based on the legal decision mentioned earlier. The ITAT refrained from commenting on the merit of the issue at hand, as the issue was being restored to the assessing officer for further review. Ultimately, the appeal filed by the revenue was allowed for statistical purposes. The judgment was pronounced on January 15, 2014, in an open court session.
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