TMI Blog2012 (5) TMI 715X X X X Extracts X X X X X X X X Extracts X X X X ..... in law, the Worthy CIT(A) in Appeal No. 236.09-10 dated 26.12.2011 has erred in passing that order in contravention of the provisions of Section 250(6) of the Income Tax Act, 1961. 2. That on the facts, circumstances and legal position of the case, Worthy CIT(A) has erred in confirming the action of Ld. AO wherein he had erred in making addition of ₹ 16,70,760/- by erroneously adding payment to 5 contractors by invoking the provisions of Sec 40(a)(ia) of the Act. The other grounds are as under : 2.1 The Ld. AO has erred in wrongly invoking the provisions of Sec 40(a)(ia) even when the same was not applicable over the payments in question. 2.2 The Ld. AO wrongly added the amounts even when majority of the payments wer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had made payments to the subcontactors amounting to ₹ 16,70,760/- on which no tax was deducted at source. The Assessing Officer vide para 2.1 noted that no tax was deducted up to 28.2.2007 and as tax was required to be deducted and paid on 31.3.2007, the said payments were to be disallowed in view of the provisions of section 40(a)(ia) of the Act. The CIT (Appeals) upheld the order of the Assessing Officer. 5. The assessee is in appeal against the order of the CIT (Appeals). The learned A.R. for the assessee pointed out that the issue in this case now stands covered by the ratio laid down in CIT Vs. Virgin Creations, ITA No.302 of 2011, GA 3200/2011(Calcutta HC) Date of decision 23.11.2011, which has been followed in ACIT Vs. Raja ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... return of income which was 31.10.2007. The Assessing Officer disallowed the above said payments for non-deduction of tax as the same was required t be paid by 31.3.2000 only. 8. Section 40(a)(ia) of the Act provides that in case where any interest, commission or brokerage, rent, royalty, fees for professional services or technical services were payable to a resident, or amounts payable to a contractor or sub-contactors, being resident, on which tax was deductible at source under Chapter XVII-B and where such tax has not been deducted or after deduction has not been paid, then such amount would not be deducted while computing income under the head income from profits and gains of business or profession. 9. We find that the issue of de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interpreting the word payable in this provision, the word of a statute must be understood in its natural, ordinary or popular sense and construed according to its grammatical meaning. According to me, such construction would not lead to absurdity because there is nothing in this context or in the object of this statute to suggest to the contrary. It is a cardinal principle of interpretation that the words of a statute must be prima facie given their ordinary meaning, when the words of the statute are clear, plain and unambiguous then the courts are bound to give effect to that meaning. The literal rule of interpretation really means that there should be no interpretation of the statute, rather in other words, we should read the statute as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the Finance Act, 2008 with retrospective effect from 1.4.2005 provided that where in respect of any sum, tax had been deducted in any subsequent year or has been deducted during the last month of the previous year, but paid after the said due date or deducted during any other month of the previous year but paid after the end of the previous year, the deduction of said sum shall be allowed in computing the income of the previous year in which such tax had been paid. The proviso as substituted by Finance Act, 2010 provides that in respect of any sum, where tax has been deducted in any subsequent year or deducted during the previous year but paid after the due date specified in sub-section 139(1) of the Act, such sum shall be allowed as a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee had deducted tax at source out of payments made to sub-contractors totaling ₹ 16,70,760/- which was due to be deposited by 31.3.2007 but was deposited on 31.5.2007. The due date for filing return of income of the assessee was 31.10.2007. Following the ratio laid down by the Hon'ble Calcutta High Court in CIT Vs. Virgin Creations (supra) and various Benches of the Tribunal we hold that once the tax has been deducted and deposited by the assessee before the due date of filing return of income, there is no merit in disallowing the expenditure relatable to such tax deducted at source. The assessee succeeds on both the counts. Accordingly, we direct the Assessing Officer to allow the claim of expenditure of ₹ 16,70,760/-. The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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