2014 (11) TMI 43

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....ur was justified in directing the AO to allow total expenditure of Rs. 1,76,39,847/- as corresponding TDS amount outstanding as on 31.03.2007 was deposited on or before 29.10.2007 which is before due date of filing of return of income i.e. 31.10.2007 and therefore, no disallowance u/s 40(a)(ia) of the I.T. Act, 1961 was required to be made. 2. Whether on the facts and in the circumstances of the case the Id. CTT(A) was right in holding that the amendment in sec. 40(a)(ia) of the I.T. Act, 1961 w.e.f. 01.04.2010 is clarificatory in nature and therefore, has to be treated as retrospective w.e.f. 01.04.2005 even though the Finance Act, 2010 makes it, with effect from 01.04.2010 and will apply in relation to A.Y. 2010-11 and subsequent years....

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....h TDS was deductible was outstanding in the month of March with corresponding TDS amount but the same was deposited before the due date of filing of income tax return. Hence, there was no contravention of provision of Section 40(a)(ia) of the Act. It was further stated that proviso to this Section 40(a)(ia) of the Act introduced by the Finance Act, 2010 was clarificatory in nature and therefore, applicable retrospectively. Reliance was placed on the decision of ITAT Mumbai Bench in ITA No.6628/Mumbai/2009 for the assessment year 2005-06 in case of Babu Sahaeb Nana Sahaeb Dhumal vs ACIT. The ld. CIT(A) after considering the submissions of the assessee deleted the addition by observing in para 5.4 and 5.5 of the impugned order as under:- '....

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....G' Mumbai in Golden Stables Lifestyle Centre Pvt. Ltd. vs CIT in ITA No. 5145/Mum/2009 for assessment year 2005-06 order dated 30-09-2010, reported in 2010-TIOL-596-ITAT-Mum, by taking note of ratio of the Hon'ble Supreme Court in case of CIT vs Alome Extrusion Ltd. , reported in 319 ITR 306. It is further observed that amended to first proviso by the Finance Act, 2010, extends the time limit for all TDS payable through out the year and it is a curative major which would apply to earlier years also. In view of the decision dated 3-12-2010 of the Hon'ble ITAT Ahemdabad B Bench, I direct the Assessing Officer to allow total expenditure of Rs. 1,76,39,847/- as total corresponding TDS amount outstanding as on 31-03-2007 was deposited on....

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....in it has been held as under:- ''In the present case, it is not in dispute that the assessee deducted TDS which was not paid to the account of Central Govt. within the prescribed time, however it was paid before the due date of filing the return specified n Section 139(1) of the Act. On a similar issue, the Hon'ble Calcutta High Court held that amendments in Section 40(a)(ia) is having retrospective operation and upheld the order of the ITAT in the case of CIT vs Virgin Creations, ITA No.302 of 2011, judgement dated 23-11-2011. Although the aforesaid judgement was relating to the issue as to whether the amendment in Section 40(a)(ia) was having retrospective effect or not, but from the ratio laid down in the said case, it is clear....