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TMI Blog2012 (11) TMI 228X X X X Extracts X X X X X X X X Extracts X X X X ..... order for the sake of convenience. 2. First, we take up the appeal of the assessee in the case of Backbone Tarmat N G Joint Venture in I.T.A.No. 3549/Ahd/2008. The grounds raised by the assessee are as under: "i) That the Ld. CIT(A), has grievously erred in law and on facts in holding that the appellant assessee is liable to deduct tax at source within the meaning of section 194C and thereby confirming the addition of Rs.36,81,88,846/- made u/s 40(a)(ia) of the Income tax Act. ii) That on facts and in law it ought to have been held that it is not a payment to subcontractor but only allocation of receipt to members of assessee AOP, on which tax is not deductible at source. iii) That the Ld. CIT(A) ought to have deleted the interest char ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the amount payable as on 31.03.2005 was only Rs.2,30,59,781/- and in support of this contention, he submitted a copy of the balance sheet of the assessee as on 31.03.2005 along with schedule II of current liability. It is submitted that the balance amount was already paid and hence, for that portion, no disallowance is justified as per the decision of Special bench of the Tribunal rendered in the case of Marilyn Shipping & Transports Vs ACIT as reported in 136 ITD 23 (Vizag)(SB) He submitted that in view of this decision of Special bench of the Tribunal disallowance of only Rs.2,30,59,781/- can be made. 2.3 Ld. D.R. supported the orders of authorities below. 2.4 We have considered the rival submissions, perused the material on record an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le to the creditors for labour as per the balance sheet and Schedule II of the current liability submitted by him before us. As per this decision of Special bench of the Tribunal, disallowance u/s 40(a)(ia) can be made only in respect of the amount payable on the last day of previous year and no disallowance can be made from the amount already paid in the previous year. Respectfully following this decision of Special bench of the Tribunal, we confirm the disallowance of only Rs.2,30,59,781/- being the amount payable by the assessee to the creditors for labour work as on 31.03.2005 and the disallowance of balance amount is deleted because the same was already paid in the previous year itself and no disallowance is called for in respect of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f income by the assessee, no disallowance is justified u/s 40(a)(ia) as per the recent judgement of Hon'ble Calcutta high Court rendered in the case of Virgin Creations (supra). 6.2 Ld. D.R. supported the orders of authorities below. 6.3 We have considered the rival submissions and we find that this issue is squarely covered in favour of the assessee by the judgement of Hon'ble Calcutta High Court rendered in the case of Virgin Creations (supra) since it was held by Hon'ble Calcutta High Court in that case that amendment in section 40(a)(ia) is retrospective and therefore, if the TDS is deposited by the assessee before the due date for filing the return of income, no disallowance is called for u/s 40(a)(ia). In the present case, entire am ..... X X X X Extracts X X X X X X X X Extracts X X X X
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