2012 (7) TMI 187

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....r u/s 40(a)(ia) of the Act. b) That the ld. CIT(A) has failed to appreciate that the impugned amount of Rs. 1,31,56,505/- was neither the income of the assessee nor expenditure of the assessee and that the entire amount stood diverted at source and the assessee had no obligation to deduct TDS u/s 194C. 2) That the ld. CIT(A) has further erred in rejecting the claim of the assessee that since the entire amounts stood paid during the instant year itself, the provisions of section 40(a)(ia) of the Act were not applicable in the instant case. 3) That the appellant craves the right to amend, append, delete any or all grounds of appeal." Grounds of appeal for A.Y. 2005-06 (ITA No. 966/D/11) 1) That the ld. CIT(A) has erred both in law as wel....

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....elied on the decision of Spl. Bench in the case of Merilyn Shipping and Transports, 136 ITD 23 (Visakhapatnam) (SB), wherein it has been held that provisions of section 40(a)(ia) are applicable only to the amounts of expenditure which are payable as on 31st March of every year and it cannot be invoked to disallow the expenditure which has been actually paid during the previous year, without deduction of TDS. 4. Ld. Counsel submitted that in A.Y. 2006-07 only Rs. 9,68,170/- was outstanding as payable on 31.03.2006 and, therefore, the disallowance is to be restricted to this extent only. 5. We have considered the submissions of both the parties and have perused the record of the case. 6. We find that Spl. Bench in the case of Merilyn Shipp....

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....und to give effect to that meaning. The literal rule of interpretation really means that there should be no interpretation of the statute, rather in other words, we should read the statute as it is without doing any violence to the language. In the present dispute before us, the word "payable" used in section 40(a)(ia) of the Act is to be assigned strict interpretation, in view of the object of Legislation, which is intended from the replacement of the words in the proposed and enacted provision from the words "amount credited or paid" to "payable". Hence, in my view, my answer to the question referred by Hon'ble President to the Special Bench is as under: The provisions of section 40(a)(ia) of the Act are applicable only to the amounts of....