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2015 (11) TMI 1211 - HC - Income TaxDisallowance made u/s.40(a)(ia) - non deduction of tax at source towards sub-contracting of work of the joint venture? - ITAT deleted the disallowance holding that the insertion of second proviso to Section 40(a)(ia) by Finance Act, 2012 with effect from 01.04.2013 is retrospective in operation - Held that:- The Tribunal, as a matter of fact, found that a sum was not received by the assessee from the Department and that payment was made over directly to one M/s.Kranti Constructions, who are sub-contractors and who had in fact executed the work in terms of Memorandum of Understanding that was entered into by the assessee. The Tribunal also found that the Department made T.D.S. on payments made to M/s.Kranti Constructions and the same is reflected in the returns. In other words, the Tribunal, as a matter of fact, found that these amounts paid to M/s.Kranti Constructions could not be made as forming part of the assessment of the assessee. In that view of the matter, invocation of Section 40(a)(ia) itself would not arise. This finding of fact is not challenged before us. Hence, the appeal is liable to be dismissed on this ground alone. However, the Tribunal, having rendered a finding that the facts of the case under Section 40(a)(ia) could not be invoked, went on to discuss the retrospective effect given to Section 40(a)(ia) by Finance Act, 2012 with effect from 01.04.2013 while relying on the order of Antony D. Mundackal v. A.C.I.T. [2013 (12) TMI 67 - ITAT COCHIN]. Inasmuch as there was no necessity for the Tribunal to enter into this arena since the order of the Tribunal is erroneous to the extent of rendering the finding with regard to the retrospective aspect of the Finance Act, 2012, the issue is left open to the respective parties to canvass the matter in appropriate forum. - Decided against revenue
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