TaxTMI 
TaxTMI 
2012 (8) TMI 219
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....made under section 40(a)(ia) of the Act. 3. The facts relating to the above said issues are stated in brief. The assessee is engaged in shipping business and also in other business activities. For Shipping business, the assessee preferred to offer income under tonnage tax scheme under section 115VJ of the Act, under which the income is assessed on some fixed basis without referring to the book results. The Assessing Officer noticed that the assessee has not properly distributed the common expenses between the shipping business and other business. Accordingly he identified the common expenses and allocated it in the ratio of gross receipts between the two businesses. In this process, the Assessing Officer made an addition of Rs. 8,00,103/....
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....icial amendment. For this proposition, he placed reliance on the decision dated 23-11-2011 rendered by Hon'ble'ble Calcutta High Court in the case of CIT Vs. Virgin Creations. Accordingly he submitted that the impugned disallowance made by the Assessing Officer is liable to deleted as the assessee has remitted the TDS amount before the due date for filing the return of income. 5. With regard to other two disallowances viz., Rs. 5,00,000/- and Rs. 1,40,000/- made u/s 40(a)(ia) of the Act, the Learned A.R, by placing reliance upon the decision of Visakhapatnam Special bench of Tribunal in the case of M/s Mrilyne Shipping & Transports which was pronounced on 09-04-2012, submitted that the provisions of sec.40(a)(ia) cannot be invoked to....
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....holding that the amendment brought out in sec. 40(a)(ia) is retrospective in nature. The binding nature of the decision of Special Bench when a lone decision of non-jurisdictional High Court is available on the very same issue was examined in the Third Member decision of Ahmedabad bench in the case of Kanel Oil & Export Inds. Ltd (121 ITD 596). For the sake of convenience, we extract below the relevant observations made by the Third Member:- "7. I have considered the rival arguments presented before me by both the sides. It all boils down to this, viz.,, whether the order of the Special Bench upholding the levy of interest in light of sub-section (4) of section 115JA should be followed or the judgment of the Bombay High Court in Snowcem ....
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....gh Court is the lone decision available on the issue under consideration as on date. Accordingly, we are inclined to follow the same in the instant case in preference to the decision rendered by the Special bench of ITAT in the case of Bharti Shipyard Ltd, referred (Supra). Accordingly, by following the decision of Hon'ble Calcutta High Court, we hold that the assessee herein is entitled to claim deduction of expenses if the TDS deducted there on is remitted before the due date for filing the return of income. In the instant cases, it is stated that the assessee has remitted the TDS amount on 23.11.2005. However, the details of due date for filing return of income for the year under consideration was not furnished to us. Accordingly, we....
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....r. 10. In the instant case, the submission of the assessee is that it has paid the entire amount of expenditure subjected to disallowance under section 40(a)(ia) of the Act before the end of the financial year and hence the provisions of sec.40(a)(ia) cannot be invoked on them. However this claim is not borne out of the orders of tax authorities. Accordingly, we are of the view that the said claim requires verification at the end of the Assessing Officer. 11. In view of the foregoing discussions, we set aside the order of Learned CIT(A) on the issue of disallowances made u/s 40(a)(ia) of the Act and restore the same to the file of the Assessing Officer with the direction (a) to verify the details of remittance of TDS and delete the....