2015 (10) TMI 2744

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....e ld. Counsel for the assessee at the outset contends that the issue in question is covered in favour of the assessee by the judgment of this Bench in the case of ACIT, Circle- 4, Jaipur vs. Shri Girdhari Lal Bargoti (ITA No. 757/JP/2012 dated 10-04-2015), holding as under:- ''10. At the outset, the ld AR for the assessee has submitted as under:- 1. The legislative intent for introducing section 40(a)(ia) is explained in CBDT Circular No.5/2005 dt. 15.07.2005 reported at 269 ITR 101 (statute). In the present case there is no dispute as to the fact that interest has actually been paid to above finance companies and as on 31.03.2009 no amount of interest was payable. The Special Bench of ITAT in case of Merilyn Shipping & Tr....

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....eleted the disallowance. He also relied on the following case laws: (i) DCIT Vs. Ananda Marakala (2014) 150 ITD 323 (Bang.) (Trib.) (ii) ITO Vs. M/s Theekathir Press (Chennai)(Trib.) ITA No. 2076(Mds)2012 dt. 18.09.2013 The issue of applicability of TDS on amount payable as on 31st march only is also covered by the decision of the Hon'ble ITAT Jaipur Bench in case of JVVNL V. DCIT 123 TTJ 888 wherein it was held that section 40(a)(ia) applies only when the amount is payable and not where the expenditure is paid. Therefore where the assessee has made actual payment, the provisions of section 40(a)(ia) is not applicable. 2. It may also be pointed out that second proviso to section 40(a)(ia) inserted by FA, ....

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....nkar Vs. ACIT in ITA No.1832/Bang/2013 dt. 10.10.2014, Agra Bench in case of Rajeev Kumar Agarwal Vs. ACIT (2014) 34 ITR(Trib.)479, Delhi Bench in case of ITO Vs. Dr. Jaideep Kumar Sharma (2014) 34 ITR(Trib.)565, Bangalore Bench in case of DCIT Vs. Ananda Marakala (2014) 150 ITD 323 as the amendment was made to remove the undue hardship. 3. It may also be pointed out that an amendment has been made by FA, 2014 w.e.f. 01.04.2015 in section 40(a)(ia) whereby it is provided that 30% of any sum payable to a resident shall be disallowed if tax is not deducted at source under Ch. XVIIB as against the 100% presently made. The purpose of this amendment was explained in the memorandum as under:- "the disallowance of whole of the am....

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....ut inflicting a corresponding detriment on some other person or on the public generally and where to confer such benefit appears to have been the legislators object, then the presumption would be that such legislation, giving it a purposive construction, would warrant it to be given a retrospective effect. Therefore even in a case it is held that the disallowance u/s 40(a)(ia) is warranted, same should be restricted to only 30% of the amount of interest paid. In view of above, the order of the CIT(A) be upheld by dismissing the ground of the department. 11. We have heard the rival contentions of both the parties and perused the material available on the record. On issue of amount already paid during the year or amount shown payable....