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Asstt. Commissioner of Income Tax, Versus M/s. Kant Associates, M/s Kant Associates Versus Asstt. Commissioner of Income Tax

2015 (5) TMI 357 - ITAT AHMEDABAD

Disallowance u/s 40(a)(ia) - amount paid towards construction expenses - Non deduction of TDS - whether assessee is entitled to get benefit of amended provisions of section 40(a)(ia) brought by Finance Act, 2010 w.e.f. 01-04-2010 - Held that:- no disallowance can be made if after deduction of tax through the previous year, same has been paid on or before due date of filing of the return of income - Since tax deducted at source has been paid before due date of filing of return, no disallowance co .....

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Per: Shailendra Kr Yadav: Judicial Member:- Revenue has filed the appeal against the order of Ld. CIT(A)-IV, Ahmedabad dated 29th July, 2011 on following grounds:- "1. The Ld. C1T(A) has erred in law and on facts in deleting the addition of ₹ 8,91,500/- made by the Assessing Officer by holding that amendment made in section 40(a)(ia) of the Income Tax Act by finance Act- 2010 have retrospective effect. 1.1 In the process, the Ld. CIT(A) failed to take cognizance of object clause of a .....

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the expenditure involved is not covered by any of the provisions of section 30 to 38 and hence the question of applying sub-clause (ia) of Clause (a) of Section 40 does not arise." 3. In this case original assessment order was passed u/s. 143(3) of the Act on 29-03-2007. A disallowance of ₹ 11,07,132/- was made by invoking the provisions of Section 40(a)(ia) of the Act. Above amount was paid towards construction expenses to M/s. Dharnenedra Developers. Assessee deducted tax of ₹ .....

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on, so made by AO. 3.2 Issue was challenged before ITAT wherein vide its order dated 19-02-2009 set aside the issue to the file of Assessing Officer with direction to verify the amounts of Dharnenedra Developers and decide the issue afresh. ITAT also directed to examine the issue of TDS in view of the amendment of section 40(a)(ia) by Finance Act, 2008 w.e.f. 01-04-2005. 3.3 Assessing Officer finalized the set aside assessment order as per direction of ITAT whereby making disallowance of ₹ .....

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this, AO disallowed the claim of construction of expanses amounting to ₹ 8,91,500/- made during the period prior to the March, 2005 for which tax was deducted but not paid by the end of previous year i.e. March, 2005 by invoking the amended provision of section 40(a)(ia). 3.4 The matter was again carried before First Appellate Authority wherein various contentions were raised on behalf of assessee and having considered the same CIT(A) granted relief to the assessee. Same stand has been opp .....

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ance Act, 2010 w.e.f. 01-04-2010. As per this amended provision, no disallowance can be made if after deduction of tax through the previous year, same has been paid on or before due date of filing of the return of income. We find that ITAT in case of Kanubhai Ramjibhai Makwana held as under:- "In view of the above discussion, following the case laws of Hon'ble Apex Court and of Hon'ble High Courts cited above, we are of the view that the provisions of section 40(a)(ia) as amended by .....

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