TaxTMI 
TaxTMI 
2015 (7) TMI 644
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.... a company which is engaged in the business of civil construction. The return of income for the year under consideration was filed by it on 15.11.2007 declaring total income of Rs. 13,02,069. During the course of assessment proceedings, the assessee was called upon by the A.O. to furnish the relevant details of TDS made on sub-contract payments of Rs. 1,16,89,768 made during the year under consideration and also to file the proof of payment of the same into Government account within the stipulated time. From the perusal of the details furnished by the assessee, it was noticed by the A.O. that the tax amount of Rs. 1,19,236 deducted by the assessee from the payments of Rs. 96,39,767 made to the sub-contractors during the period from April, 2....
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....icable and therefore, disallowed the amount paid to subcontractors amounting to Rs. 96,39,767/-. In this regard it is respectfully submitted the provisions of section 40[a][ia] of the IT Act, were inserted by the Finance Act [No.2] 2004 w.e.f. 01-04- 2005 and subsequently it was amended by the Finance Act 2008 and further amended by the Finance Act 2010 with retrospective effect from 01- 04-2010. The relevant part of the provision so amended as it stands in the IT Act is as under; 40. Amounts not deductible: Notwithstanding anything to the contrary in sections 30 to [38], the following amounts shall not be deducted in computing the income chargeable under the head "Profits and gains of business or profession",- (a) In the case of any ....
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....tive from 01-04-2005, The issue came up before the Hon'ble ITAT, Kolkatta Bench, in the case of Virgin Creations Vs. ITO, Ward-32[4], Kolkatta, ITA No.267/KoI/2009 for asst. year 200506. The Hon'ble Bench held that the amendment made by the Finance Act 2010 is retrospective l.e, with effect from 01-04- 2005. The issue went to Hon'ble Kolkatta High Court, which has ratified the decision of I TAT. Again the issue was considered by the Hon'ble I TAT, Mumbai Bench 'C, Mumbai, in ITA No. 1321/MUM/2009[AY 2005-06], in the case of Sri. Piyush C. Mehta Vs. ACIT, 25 [3] Mumbai, after considering the decision of Hon'ble I TAT, Kolkatta and also the Hon'ble Kolkatta High Court, it has extracted the relevant parts from the K....
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....ive pronouncement of the Supreme Court, this court cannot decide otherwise. Hence we dismiss the appeal without any order as to costs. " The observation of Hon'ble ITAT, Mumbai Bench, in the above mentioned case are as under in para 17. "17. It can be seen from the above decision of the Hon'ble Calcutta High Court that Amendment to the provisions of Sec. 40(a)(ia) of the Act, by the Finance Act, 2010 as aforesaid was held to be retrospective from 1.4.2005. If the amendment is considered as retrospective from 1.4.2005, the effect will be that payments of TDS to the credit of the Government on or before the last date for filing return of income u/s. 139(1) of the Act for the relevant A Y have to be allowed as deduction. Admittedly....
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....f Rs. 96,39, 7671- as allowable deduction. In case the Hon'ble Commissioner needs any further clarifications the under signed is obliged to furnish the same." 4. Keeping in view the submissions made by the assessee, the Ld. CIT(A) held that the relevant amendment made to section 40(a)(ia) by the Finance Act, 2010 was applicable retrospectively from 01.04.2005 as held by the Hon'ble Kolkata High Court in the case of CIT vs. Virgin Creations in ITA.No.302 of 2011 GA 3200/2011 dated 23.11.2011 as well as the various Benches of the ITAT in the cases cited by the assessee and consequently, if the TDS was deposited by the assessee into the Government account before the due date for filing of return under section 139(1), no disallowance unde....