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2019 (3) TMI 1595 - AT - Income TaxAddition u/s 145A - inclusion of service tax as part of trading receipts - HELD THAT:- We notice that the coordinate Bench has decided the identical issue in favour of the assessee in the assessee’s own case for the A.Y. and 2008-09 [2013 (7) TMI 1033 - ITAT MUMBAI] as held assessee is a service provider company and patently, provisions of section 145A cannot be made applicable, because the provision was specifically introduced for the purposes of manufacture segment of business because section 145A(a)(ii) submitted before the CIT (A) mentions “ by the assessee being goods to the place of location & conditions as on the date of valuation are required to be included - addition made u/s 43B would also be deleted, because no liability arises as such or on the last day of the account period - Decided in favour of assessee. Addition on account of AIR/ITS/TDS difference - HELD THAT:- Assessee has given explanation in respect of the party ACC Ltd., however could not explain the difference in respect of the remaining three parties. As alleged by the assessee since the AO did not provide the break-up in respect of the three companies despite request made by the assessee, the assessee could not explain the same before the authorities below. We further notice that the AO has made addition on the basis of the AIR data without conducting any further enquiry. The facts of the decision relied upon by the assessee is different from the facts of the present case - agree with the CIT (A) that the AO has made the addition without giving adequate opportunity to the assessee. Hence, we endorse the findings of the CIT (A) and direct the AO to verify the fact and pass a speaking order after affording opportunity of being heard to the assessee. Disallowance of referral fees for non-deduction of tax - addition u/s 40(a)(ia) - disallowance on the basis of Explanation to section 9 of the Act inserted by Finance Bill 2010 with retrospective effect - HELD THAT:- The amount was paid towards referral fees to NKF for business referred by them therefore in the light of the judgment FAIZAN SHOES PVT. LIMITED [2014 (8) TMI 170 - MADRAS HIGH COURT] the assessee was not required to deduct tax at source. So far as the applicability of the Circular No 786 of 2000 is concerned the same was applicable in case of the assessee as it was withdrawn on 22.10.2009. As per the order of the Hon’ble Bombay High court rendered in the case of UTI vs. Unny and others [2001 (4) TMI 77 - BOMBAY HIGH COURT] subsequent withdrawal of an earlier Circular cannot have retrospective operation. So far as the retrospective effect of the Explanation to section 9 is concerned, The coordinate Bench has held that disallowance on the basis of Explanation to section 9 of the Act inserted by Finance Bill 2010 with retrospective effect from 01.06.1976 was bad in law as the assessee could not have visualized to deduct the tax in the absence of any such provision at the time of making payment. Hence we set aside the findings of the Ld. CIT(A) and allow this ground of appeal of the assessee and further direct the AO to delete the addition.
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