TMI Blog2014 (3) TMI 1024X X X X Extracts X X X X X X X X Extracts X X X X ..... 847 - KERALA HIGH COURT] while examining the provisions in Second Proviso to section 40(a)(ia) found that the benefits conferred by Proviso to section 40(a)(ia) is not available for the assessment year 2007-08. In other words, Second Proviso to section 40(a)(ia) operates prospectively and not retrospectively. In view of this judgment of the Kerala High Court in M/s Prudential Logistics and Transports (supra), this Tribunal is of the considered opinion that the benefits extended by Parliament by Finance Act, 2012 with effect from 01-04-2013 by Second Proviso to section 40(a)(ia) cannot be applicable to the assessee for the assessment year under consideration. Therefore, we do not find any infirmity in the order of the lower authority. Accord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enue to them. According to the ld.representative, the assessee, however, could not deduct tax at source at the time of payment. Referring to section 40(a)(ia) of the Act, the ld.representative submitted that when the assessee pays royalty, according to the ld.representative, tax has to be deducted. However, by mistake, it could not be deducted. According to the ld.representative, the recipient, viz. Sea Food Export Association of India, however, paid tax in respect of the amount received from the assessee. Therefore, according to the ld.representative, there cannot be any further liability on the part of the assessee so as to call for any disallowance u/s 40(a)(ia). Referring to provisions of section 40(a)(ia), more particularly, Second Pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on to extend the benefit available under Second Proviso to section 40(a)(ia) of the Act. 5. We have considered the rival submissions on either side and also perused the material available on record. Admittedly, the assessee is liable to deduct and pay tax on the royalty paid to Sea Food Exporters Association of India. It is also an admitted fact that the assessee has not deducted tax while making the payment. The assessee now claims that the recipient of the amount, viz. Sea Food Exporters Association of India has paid the tax, therefore, there cannot be any disallowance u/s 40(a)(ia) of the Act in view of Second Proviso to section 40(a)(ia) which was introduced by Finance Act, 2012 with effect from 01-04-2013. The Kerala High Court whil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or any reasons, whatever may be, it is none of the concern of the assessee. The business of the assessee is letting out the processing unit on hire. Therefore, merely because Sea Food Exporters, who took the processing unit on hire from the assessee could not use the same for whatever reasons they may have, the depreciation claimed by the assessee cannot be denied. 7. On the contrary, the ld.DR submitted that the assesee has not put the processing unit to use. Therefore, the lower authorities have rightly disallowed the claim of the assessee. 8. We have carefully gone through the orders of the lower authorities and also considered the arguments made on either side. It is not in dispute that the business of the assessee is to create pr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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