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TMI Blog2012 (8) TMI 122X X X X Extracts X X X X X X X X Extracts X X X X ..... s and road sign board to the Government Departments. Return of income was filed on 24.10.2007 declaring total income at Rs. 30,04,470/-. Statutory notices were issued by Assessing Officer and compliances were made by the assessee as noted in assessment order. The Assessing Officer found that the assessee made payment of Rs. 8,25,000/- without TDS to MP Laghu Udyog Nigam. The assessee explained that this is not commission payment hence no TDS is to be made. However, the Assessing Officer did not accept the submission and made addition of Rs. 8,25,000/- being commission payment made without TDS. 4. By the impugned order, the ld. CIT(A) confirmed the addition and the assessee is in appeal before us. 5. Shri Anil Kamal Garg, CA, appeared on behalf of the assessee and contended that the assessee during the course of business of Government supply, has genuinely made payments of Rs. 8,25,000/- to MPLUN from time to time and such payments were duly claimed by the assessee under the head 'Vatav (Commission in the Audited Trading and profit and loss account. The claim of the assessee is supported by the copy of a certificate issued by MPLUN. He further contended that entire amount was paid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eduction has not been paid. On a plain reading of the provisions, it becomes abundantly clear that these provisions are applicable only when certain expenditure remains payable at the end of the relevant previous year. In other words, such provisions would not have any application in a case, alike that of the appellant, when the entire payment has already been made by the assessee in the previous year itself and at the end of the relevant previous year no amount remains payable. 7. He further submitted that the wisdom of the Special Bench comprising of three members should be allowed to prevail over the judgment of Division Bench comprising of two members. Such a position would prevail even in a case where the Special Bench did not pronounce its decision with the unanimous views but only with the majority views. Your Honours, the Special Bench of Visakhapattanam (supra), has taken all the aspects of the provisions in consideration and after thread bear reading and analysis of the relevant provisions of the Act only, the Bench has reached to the conclusion as cited above. 8. As per ld. Authorized Representative every case, unless it is over ruled by some higher Judicial Forum, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d such change was not done without any purpose. It is a basic presumption that an enactment brought in by the legislature 'is well-thought of and properly worded in order to give meaning to its intent by changing the words from "credited" or "paid" to "payable". The legislative intent has been made clear that only the outstanding amount or the provision for expense liable for TDS is sought to be disallowed in the event there is a default of TDS. Where the language is clear, the intention of the legislature is to be gathered from the language used. What is to be borne in mind is as to what has been said in the statute as also what has not been said. A construction which requires, for its support, addition or substitution of words or which results in rejection of words, has to be avoided, unless it is covered by the rule of exception, including that of necessity. In the present provision of s. 40(a)(ia) there is no such exception and the only word provided by legislature is "payable".-CIT vs. Kelvinator of India Ltd. (2010) 228 CTR (SC) 488 : (2010) 34 OTR (SC) 49 : (2010) 320 ITR 561 (SC) applied. The Revenue's argument does not have any merit that payment of earlier years ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... words paid and payable were used. However the word paid was subsequently dropped which shows that s. 40(a)(ia) was meant to be applicable only if the amount covered therein was "payable" at the end of the year. Reference may be made for the scope and effect of s. 40(a)(ia) as clarified by CBDT in Circular No. 5 of 2005, dt. 15th July, 2005 to show that the intention to introduce this provision was brought to curb bogus payments by creating bogus liability.-CIT vs Upnishad Investment (P) Ltd. & Ors. (2002) 177 CTR (Guj) 176 : (2003) 260 ITR 532 (Guj) applied. (Para 8) Sec. 40(a)(ia) creates a legal fiction for the amount outstanding or remains payable at the end of every year as on 31st March and it cannot be extended for taxing the amounts already paid. In fact, s. 201 itself takes care of tax to be collected in the hands of the payee and other TOS provisions under Chapter XVII-B. No further legal fiction from elsewhere in the statute can be borrowed to extend the field of s. 40(a)(ia). This fiction cannot be extended any further and, therefore, cannot be invoked by AO to disallow the genuine and reasonable expenditure on the amounts of expenditure already paid. While interpret ..... X X X X Extracts X X X X X X X X Extracts X X X X
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