TMI Blog2015 (1) TMI 1233X X X X Extracts X X X X X X X X Extracts X X X X ..... aid the tax duly. The amended second proviso to Section 40(a)(ia) of the Act was also referred. The Tribunal in the case of Rajeev Kumar Agarwal Vs. Additional Commissioner of Income Tax [2014 (6) TMI 79 - ITAT AGRA ] has held that “the insertion of second proviso to Section 40(a)(ia) is declaratory and curative in nature and it has retrospective effect from 1st April, 2005, being the date from which sub clause (ia) of section 40(a) was inserted by the Finance (No.2) Act, 2004.” In such circumstances, it cannot be construed that the Ld. Assessing Officer had passed the order without application of mind. He has considered all these facts and had consciously decided the matter. From the above facts, it appears that the Ld.CIT has passed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usiness of investments. The assessee company had filed its return of income for the assessment year 2009-10 on 30.09.2009 admitting its total income of ₹ 9,95,70,010/-. Subsequently, the assessee filed a revised return on 15/4/10 recasting its income as ₹ 9,03,01,180/-. Subsequently the case was taken up for scrutiny and the assessment was completed U/s.143(3) of the Act on 29.10.2011 computing its taxable income along with surcharge and cess as ₹ 3,08,98,876/-. The Ld. CIT on perusing the assessment order and the assessment records, made the following observations:- (1) The assessee company had claimed an expenditure of ₹ 33 crores towards providing access to branch net work. (2) The assessee company had made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nature. The assessee company has not deducted the tax deductible at source as per the provisions of Section194C of the Act. As per the provisions of 40(a)(ia), if the TDS liable to be deductible is not deducted by the assessee, then the expenditure has to be disallowed and the same can be allowed as expenditure only in the year in which, the assessee deducts tax at source as per the provisions of Income Tax Act. Accordingly, the expenditure of ₹ 33 crores claimed by the assessee cannot be allowed for the assessment year 2009-10. It can be allowed in the year in which, the assessee deducts the tax and remits the same to the Government of India account. 8. In view of the above, the Assessing Officer is hereby directed to re-do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ld.CIT and prayed that the same may be sustained. 5.1. We have heard both the parties and carefully perused the materials available on record. From the above facts, we find that the Ld.CIT had made several observations based on the materials which have already been examined by the Ld. Assessing Officer while passing the assessment order. Having made such observations the Ld.CIT had finally concluded as follows:- i) The nature of transactions amounts to contractual obligations ii) The assessee company did not deduct at source for the payments made. iii) Provisions of section 40(a)(ia) of the Act will be attracted in this case. iv) Accordingly the expenditure of ₹ 33 crores claimed by the assessee cannot be allowed for a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the order U/s.263 based on difference of opinion and by reviewing the issue which was already decided by the Ld. Assessing Officer. Moreover, it is pertinent to mention at this juncture that the decision rendered in the case of Merilyn Shipping and Transports Vs. Additional CIT in 16 ITR (Trib) 1 is also in favour of the case of the assessee. In the aforesaid case the order of the learned Judicial Member was upheld by the Hon ble Vice President sitting as the Third Member wherein it was held that:- the provisions of Section 40(a)(ia) are applicable only to the amounts of expenditure which are payable as on the dated 31st March of every year and it cannot be invoked to disallow which had been actually paid during the previous year, without ..... X X X X Extracts X X X X X X X X Extracts X X X X
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