TMI Blog2015 (7) TMI 861X X X X Extracts X X X X X X X X Extracts X X X X ..... cided against assessee. Disallowance u/s 40(a)(ia) - amount of expenses on which Tax Deducted at Source (TDS) was not deposited into the Government account within due date - AO submitted that the disallowance be confirmed and it be excluded from the exemption of section 10B - Held that:- It is not in dispute that the disallowance is in respect of appellant's unit eligible for deduction under section 10 B. Since by disallowing expenses on account of non-deduction of TDS or not depositing TDS to government account in time, assessing officer only increased business profit. Such increased business profit is eligible for deduction under section 10 B, appellant is eligible for deduction under section 10 B for addition of expenses disallowed un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Commissioner of Income Tax (Appeals) dated 17th March, 2011 passed for Assessment Year 2007-08. 2. The registry has pointed out that appeal of the assessee is time barred by 42 days. The assessee has filed an application for condonation of delay. On due consideration of the application of the assessee coupled with the fact that order of the Commissioner of Income Tax (Appeals) is under challenge before the Tribunal in the appeal of revenue also, It is open for discussion and assessee could file cross objection on receipt of notice in the revenue s appeal. We condone the delay and proceed to decide both the appeals on merit. 3. The solitary grievance of the assessee is that Ld. Commissioner of Income Tax (Appeals) has erred in confir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ayments made after 20 days from the end of the month then it is not, allowable. In other words, the payments of employees contribution to the PF fund after 20th April following the end of previous year will not be allowable to the assessee. The ld. Assessing Officer therefore disallowed the claim of the assessee. 5. Appeal to the Commissioner of Income Tax (Appeals) did not bring any relief to the assessee. 6. With the assistance of Ld. representatives, we have gone through the record carefully. The issue in dispute is squarely covered against the assessee by the decision of Hon ble Gujarat High Court rendered in the case of Gujarat Road Transport Corporation reported in 366 ITR page 170 wherein Hon ble High Court has held that emplo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion amounting to setting-aside the issue to the file of the Assessing Officer. 8. As stated earlier, assessee is a 100% export oriented unit with software technology park of India. It is entitled exemption u/s. 10B. The assessee has claimed exemption at ₹ 5,12,42,970/- u/s. 10B of the Act. Ld. Assessing Officer has pointed out certain expenses which are disallowed with the help of section 40(a)(ia) of the Income Tax Act, 1961 on the ground that assessee either failed to deduct the TDS on certain payments or after deducting TDS failed to deposit in the Government account, therefore, it is not entitled for deduction of those expenses. He accordingly, disallowed the claim of assessee. On appeal, Ld. First Appellate Authority, has obs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... On account of TDS deducted not deposited within due date Assessee deposited the same amount before the due date of filing of its return of income. In the recent judgment given by Hon'ble ITAT Ahmedabad B bench that recent amendment made by Finance Act in section 40(a)(ia) is in the nature of remedial and designed to eliminate unintended consequence which may cause undue hardship to the taxpayers it has to be treated as retrospective w.e.f. April 2005 in the case of Kanubhai Ramjibhai Vs Income Tax Officer (2011) 49 DTR (Ahd Trib) 70 ₹ 4,94, 204 On account of TDS not deducted on Computer Rent u/s 1941 As per provision of the section this transaction is n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #8377; 20000.. ₹ 59,19,051/- Total x x x x x x 3.3 I have considered the facts of the case, assessment order and appellant's submission. It is not in dispute that the disallowance is in respect of appellant's unit eligible for deduction under section 10 B. Since by disallowing expenses on account of non-deduction of TDS or not depositing TDS to government account in time, assessing officer only increased business profit. Such increased business profit is eligible for deduction under section 10 B, appellant is eligible for deduction under section 10 B for addition of expenses disallowed under section 40(a) (ia) of IT Act. Accordingly the disallowance of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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