TMI Blog2012 (4) TMI 802X X X X Extracts X X X X X X X X Extracts X X X X ..... ated that the following two are additional grounds: 3. For that the Ld. CIT(A) erred in partly confirming the addition to the extent of ₹ 3,39,68,495/- made by the A.O. u/s. 40(a)(ia) out of the total addition of ₹ 8,12,70,683/- and not allowing the relief in full. 4. For that the Ld. CIT(A) erred in holding that the aforesaid disallowance of ₹ 3,39,68,495/- made u/s. 40(a)(ia) is not eligible for deduction u/s. 80IC 3. We have heard rival submissions and gone through facts and circumstances of the case. Brief facts leading to the above additional grounds stated by the Ld. Counsel for the assessee are that the Assessing Officer noted in his assessment order that the amount of TDS on expenditure debited to P L Account was deducted as under: Delayed payments of TDS: Amt. of tax deducted at source Amt. of exp. On which such tax is deducted at source ₹ 1,07,008/- ₹ 49,68,495/- Rs,15,95,479/- ₹ 7,63,02,188/- ₹ 17,02,487/- ₹ 8,1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 40(a)(ia) of the Act by the Finance Act, 2010 as curative and remedial in nature by holding as under: After hearing the rival submissions and on careful perusal of the materials available on record, keeping in view of the fact that though the Ld. D.R. submitted that the decisions of the Coordinate Benches are not binding and the Kolkata benches may take a different view, since Mumbai Bench after analyzing the provisions of section 40(a)(ia) since its inception and various amendments made to the same including the suggestion made by the Industry in the form of representation in their pre-budget memorandum to the Hon ble Finance Minister and by applying the decision of the Hon ble Apex Court in the case of Alom Extrusions Ltd., has observed that The provisions of section 40(a)(ia) as stood prior to the amendments made by the Finance Act 2010 thus were resulting into unintended consequences and causing grave and genuine hardships to the assessees who had substantially complied with the relevant TDS provisions by deducting the tax at source and by paying the same to the credit of the Government before the due date of filing of their returns u/s 139(1). In order to remedy this posi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l 28, 2006 and the same were paid by the assessee in July and August 2006, i.e. well before the due date of filing of the return of income for the year under consideration. This factual position was undisputed. Moreover, the Supreme Court, as has been recorded by the learned Tribunal, in the case of Allied Motors Pvt. Ltd. and also in the case of Alom Extrusions Ltd., has already decided that the aforesaid provision has retrospective application. Again, in the case reported in 82 ITR 570, the Supreme Court held that the provision, which has inserted the remedy to make the provision workable, requires to be treated with retrospective operation so that reasonable deduction can be given to the section as well. In view of the authoritative pronouncement of the Supreme Court, this court cannot decide otherwise. Hence we dismiss the appeal without any order as to costs. 5. Once the issue is decided by Hon ble jurisdictional High Court that the amendment in the provisions of section 40(a)(ia) of the Act by Finance Act, 2010 is remedial and curative in nature and TDS paid on or before the due date of filing of return u/s. 139(1) of the Act, deduction in respect to the amount on which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Ltd.. A.Y. 05-06 9. We have heard rival submissions and gone through facts and circumstances of the case. We find that the Assessing Officer as well as CIT(A) after considering the decision of Hon ble Calcutta High Court in the case of CIT Vs. Andaman Timber Industries Ltd. (2000) 242 ITR 204 (Cal) treated the excise duty refund as not derived from industrial undertaking of the assessee and not eligible for deduction u/s. 80IC of the Act. We find that as referred by Ld. Counsel for the assessee, this issue is squarely covered in favour of assessee and against the revenue by the decision of Hon ble Guwahati High Court in the case of CIT Vs. Meghalaya Steels Ltd. (2011) 332 ITR 91 (Gau) wherein it has been held as under: The Central Board of Excise and Customs in its circular dated December 19, 2002 clarified that the refund is not on account of excess payment of excise duty but is basically designed to give effect to the exemption and to operationalise the exemption given by the notifications. In that sense, the Central excise duty refund does not appear to bear the character of income since what is refunded to the assessee is the amount paid under the modalities provided b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act as well as the decision of Hon ble Supreme Court in the case of Pandian Chemicals Ltd. (Supra) disallowed the claim by giving following finding in para 4.4 of his order: 4.4. A reading of the above ruling would show that the Hon ble Apex Court has laid down the parameters for the meaning of the words derived from . Here, reference also is made to the judgment of Hon ble Calcutta High Court in the case of CIT vs. Andaman Timber Industries Ltd. 244 ITR 204 in which it was held with reference to transport subsidy that considering the undisputed fact that the subsidy is an aid to the assessee for which the immediate source is the Government, it is an incidental income on account of the newly established industrial undertaking which has been given by the Government under the scheme. Therefore, it cannot be treated as part of the profits and gains derived from an industrial undertaking of the assessee . Considering the above, in the case of M/s. Brahmaputra Carbon Limited, the assessee, the income under narration Other Income consisting of interest income of ₹ 28,108/- and transport subsidy of ₹ 1,22,89,642/- is held not to be eligible for deduction u/s.80 ..... 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