2015 (5) TMI 357

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....s. 8,91,500/- made by the Assessing Officer by holding that amendment made in section 40(a)(ia) of the Income Tax Act by finance Act- 2010 have retrospective effect. 1.1 In the process, the Ld. CIT(A) failed to take cognizance of object clause of amendment effected in section 40(a)(ia) of I T. Act as mentioned in notes on clauses of finance Act, 2010 as well as memorandum explaining the provisions of finance Bill - 2010." 2. Cross Objection is filed by the assessee on the following ground:- "1 On the facts and in the circumstances of the case, the CIT(A) erred in not upholding the Assessee's alternative contention also which was to the effect that the provisions of Section 40 are not at all attracted in this case insofar as the....

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....in view of the amended provisions of section 40(a)(ia) effected w.e.f. 01-04-2005. As per amended provisions, no disallowance of expenditure is to be made if tax which was deductable and so deducted during the last month of the previous year is paid to the Government Account upto to the due date of filing of return of income. However, tax deductable and so deducted before moth of March, must have paid by end of March only so as to claim deduction of such related expenses. In view of this, AO disallowed the claim of construction of expanses amounting to Rs. 8,91,500/- made during the period prior to the March, 2005 for which tax was deducted but not paid by the end of previous year i.e. March, 2005 by invoking the amended provision of sectio....

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....d which made the provision unworkable or a specific situation, and is of clarificatory nature and, therefore, has to be treated as retrospective with effect from 01-04-2005, the date on which section 40(a)(ia) has been inserted by the Finance (No.2) Act, 2004. Accordingly, this issue of the assessee's appeal is allowed." 5. Ld. Authorized Representative before us further pointed out that decision of Kanubhai Ramjibhai Makwana has been upheld by Hon'ble Gujarat High Court in tax appeal no. 819/Ahd/2011 vide order dated 10-12-13 holding that amendment to section 40(a)(ia) brought by Finance Act, 2010 w.e.f. 01-04-2010 is having retrospective effect w.e.f. 01-05- 2005 i.e. date on which section 40(a)(ia) introduced in IT Act. Since ....