TMI Blog2012 (9) TMI 987X X X X Extracts X X X X X X X X Extracts X X X X ..... in its appeal has raised the following grounds: 1. On the facts and in the circumstances of the case, the CIT(A) erred in deleting the addition made to the tune of ₹ 19,99,800/- on account of disallowance of payment to labour u/s 40(a)(ia) without deducting and payment of TDS into Central Govt. Account without considering the fact that the TDS amount was already paid and not payable. 2. On the facts and in the circumstances of the case, the CIT(A) erred in relying upon the decision of ITT Pune Bench, Pune in the case of M/s. Sanap Agro Animals Pvt. Ltd., Vs. ACIT dated 17-1-2011 vide order no.1192/PN/2009 for A.Y. 2006-07 without considering the decision of Hon ble ITT Mumbai Special Bench in the case of Bharati Shipyard Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of ₹ 19,99,800/- on account of labour charges before close of the year, disallowance u/s 40(a)(ia) of the Act was thus deleted. Against the aforesaid, Revenue is in appeal before us. 5. Before us, the learned DR has justified the stand of the Assessing Officer by pointing out that in terms of the provisions of section 40(a)(ia) as amended by the Finance Act, 2003 the amount of tax deducted on payment made till 28-2-2007 was liable to be deposited in the account of Central Government by 31-3-2007 to avoid the disallowance envisaged u/s 40(a)(ia) of the Act. In this case, the assessee had deposited the amount of TDS on 31-5-2007 and thus the disallowance was made for justifiable reasons. On the other hand, learned representativ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade out by the Assessing Officer is that the tax deducted on such payment of labour charges, has been deposited in the Government Treasury belatedly i.e. on 31-5- 2007. In terms of an amendment made to Section 40(a)(ia) of the Act by the Finance Act, 2010 with retrospective effect from 1-4-2010 the position emerges that the assessee deducting tax at source at any time in the previous year shall be entitled to deduction of the expenditure in the year of its incurrence so long as the tax deducted has been deposited in the State Exchequer on or before the due date for filing of the return specified u/s 139(1) of the Act. Clearly, the case of the assessee is covered by the said amendment inasmuch as the tax deducted at source of ₹ 21,144 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of Hon ble Calcutta High Court dated 23-11-2011 (supra), the impugned amendment made to the provision of section 40(a)(ia) by the Finance Act, 2010 has been held to be retrospective from 1-4-2005. As a result thereof, it has to be understood that from 1-4-2005 the effect would be that the payment of TDS to the credit of Government made on or before the due date for filing of the return u/s 139(1) of the Act for the relevant assessment year would mitigate the rigors of section 40(a)(ia) of the Act with respect to the corresponding expenditure. 8. In this background of the matter, we therefore, are of the view that the judgment of Hon ble Calcutta High Court which ostensibly supports the view contrary to that of the Special Bench of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cutta High Court that Amendment to the provisions of sec. 40(a)(ia) of the Act by the Finance Act, 2010 is retrospective from 1-4-2005. Consequently, any payment of tax deducted at source during previous years relevant to and from A.Y. 2005-06 can be made to the Government on or before the due date for filing return of income u/s 139(1) of the Act. If payments are made as aforesaid, then no deduction u/s 40(a)(ia) of the Act can be made. Admittedly, in the present case the Assessee had deposited the tax deducted at source on or before the due date for filing return of income u/s 139(1) of the Act and therefore the impugned disallowance deserves to be deleted. We order accordingly and allow the appeal of the assessee. 9. In view of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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