2015 (11) TMI 1731

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...., A.M. This appeal has been filed by the assessee against the order of ld. CIT (A) dated 27.10.2014. The only issue involved in this appeal relates to the disallowance of a sum of Rs. 7,00,567/- under section 40(a)(ia) of the I.T. Act. 2. I noted that the provisions of section 40(a)(ia) has been amended by the Finance Act, 2012 by which a proviso has been added which reads as under :- ....

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.... unintended consequence and make the section workable. Section 40(a)(ia) without the second proviso resulted in the unintended consequence of disallowance of legitimate business expenditure even in a case where the payee in receipt of the income had paid tax, and, therefore, the second proviso although inserted with effect from 1st April, 2013 is curative in nature and has retrospective effect. In....

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....nintended consequence has been sought to be taken care of by the second proviso inserted in section 40(a)(ia) by the Finance Act, 2012. The Memorandum explaining the second proviso as introduced in Finance Bill, 2012, reported in 342 ITR (Statutes) 234 at pages 260 & 261 even though state that the amendment will take effect from 1st April, 2013 but this amendment, in my opinion, is retrospective i....