TMI Blog2011 (2) TMI 1481X X X X Extracts X X X X X X X X Extracts X X X X ..... 25/Ahd/2008 (Assessee s appeal) 2. The only ground raised in this appeal by the assessee reads as under: 1. The ld.CIT(A) grossly erred in confirming addition of ₹ 13,33,500/- under Section 40(a) (ia) of the Act as per page no.2 of the appeal order. 3. At the time of hearing before us, it is stated by the learned counsel that the issue is covered in favour of the assessee by the decision of the ITAT, in the case of Shri Kanubhai Ramjibhai Vs. ITO, in ITA No.3983/Ahd/2008 dated 3-12-2010 wherein the ITAT has held the amendment in section 40(a)(ia) to be retrospective. That the assessee has made payment of TDS before the due date of filing of the return and therefore as per the decision of the ITAT no disallowance under S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rued is merely explanatory, clarificatory or declaratory it cannot be disputed that the object of the Explanation is to explain the meaning and intendment of the Act itself and this view has been hold by Ho ble Calcutta High Court in the case of CIT v. India Steamship Co. Ltd. (1992) 196 ITR 917, 936 (Cal)]. In that case, Explanation 8, which has newly been inserted by the Finance Act, 1986, with retrospective effect from 1st April, 1974, to section 43(1), has been held to be clarificatory in nature and the same has been held to be deemed to be always in existence even before 1-4-1974. Similarly, in the case of Allied Motors (P) Ltd (supra), it has been held that the provisions of the first proviso, which has newly been inserted by the Fina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with effect from 1st April, 2005, the date on which section 40(a)(ia) has been inserted by the Finance (No.2) Act, 2004. Accordingly, this issue of the assessee s appeal is allowed. No contrary decision is brought to our notice. We therefore respectfully following the above decision of the ITAT, Ahmedabad hold that if the payment for TDS is made before the due date of filing of the return no disallowance under Section 40(a)(ia) is required to be made. However for factual verification of the payment of TDS we set aside the matter back to the file of the AO. He will examine the assessee s contention that the TDS is actually paid before the due date of filing of the return and if his contention is factually found to be correct, no disall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cost of manufacturing at ₹ 30.26 per meter and on this basis has valued the closing stock of such goods. The averaging of a high quality and low quality finished material would never give correct results regarding the value of such stock. Further, making a higher valuation of closing stock in one year would mean that the value of opening stock of the next year will have to be correspondingly increased and therefore the exercise would be revenue neutral. It is for the appellant to adopt market value or the cost whichever is lower as the value of closing stock provided he consistently follows the same method year after year. I am therefore of the considered view that the appellant has taken the value of closing stock at a lower price on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ister concern. The AO held the same to be excessive and restricted the job charges at ₹ 9/- per meter which resulted in addition of ₹ 4,07,658/-. On appeal, the CIT(A) recorded the finding that the same sister concern has charged ₹ 18/- per meter as job charges from outside parties. This factual finding recorded by the CIT(A) has not been controverted before us. When the sister concern is charging more job work charges to others, then it cannot said that the payment of job charges made by the assessee either excessive or unreasonable. In view of the above, we uphold the order of the CIT(A) on this point and reject ground no.2 of the Revenue s appeal. 10. In the result, assessee s appeal is deemed to be allowed for stati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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