2012 (5) TMI 820 - AT - Income Tax

Summary

Issues involved: Appeal filed by Revenue against CIT(A) order for A.Yr. 2005-06 regarding disallowance of deduction u/s 40(a)(ia) of the IT Act and estimation of profit from business.

Issue 1: Disallowance of deduction u/s 40(a)(ia) of the IT Act:
- Revenue contended that CIT(A) erred in holding no further disallowance of deduction is allowed once profit is estimated after rejecting books of accounts.
- Tribunal observed issue is covered by earlier order in M/s. Designer Exports vs DCIT.
- Citing decisions of various benches, Tribunal found the amendment in section 40(a)(ia) by Finance Act, 2010 to be remedial and curative, allowing retrospective application.
- High Court confirmed the Tribunal's view that TDS paid before due date of filing return u/s. 139(1) is allowable deduction.
- Tribunal dismissed revenue's issue, allowing assessee's claim based on High Court decision.

Issue 2: Estimation of profit from business:
- Revenue argued CIT(A) erred in estimating profit based on assessee's declared rate without basis.
- Tribunal did not delve into this issue as it was not the primary focus of the appeal.
- No specific judgment or decision was provided regarding this issue in the summary.

In conclusion, the Tribunal dismissed the revenue's appeal based on the interpretation of the remedial and curative nature of the amendment in section 40(a)(ia) of the IT Act, allowing for the deduction of TDS paid before the due date of filing the return. The decision was in line with the High Court's ruling, affirming the retrospective application of the amendment.