TMI Blog2019 (11) TMI 1373X X X X Extracts X X X X X X X X Extracts X X X X ..... ation. Finally, after considering various case laws, the Hon ble Supreme Court held that the purpose of amendment would not serve its object in such a situation unless, it is construed as retrospective. We direct the AO to restrict the 100% disallowance confirmed by the CIT(A) to the extent of 30% only taking into account the actual claim of the assessee in its profit and loss account. We order accordingly. Thus, the sole ground of appeal of the assessee is partly allowed. - ITA No. 296/CTK/2018 - - - Dated:- 26-11-2019 - SHRI C.M. GARG, JM AND SHRI L.P. SAHU, AM For the Appellant : Shri S.K. Agarwalla, CA For the Respondent : Shri J.K. Lenka, DR ORDER Per L.P.Sahu, AM: This is an appeal filed by the assessee against the order of CIT(A)-1, Bhubaneswar, dated 16.05.2018 for the assessment year 2014-2015 on the following grounds of appeal :- 1. That, the Ld. Commissioner of Income Tax (Appeals) has wrongly interpreted the provisions of section 40(a)(ia) of the Act and has committed an error of law in confirming the disallowance of ₹ 35,46,286 out of ₹ 39,62,695 and therefore the disallowance of expenses is liable to be deleted. 2. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payments u/s.40(a)(ia) of the Act for deposit of TDS within the stipulated time limit. It was also the contention of ld. AR that out of ₹ 39,62,695/-, the assessee has claimed only expenses of ₹ 35,46,286/- in its profit and loss account, which has been accepted by the CIT(A) in the appellate order at para 3.2 and after deducting the same, upheld the balance addition made by the AO, which amounts to 100% of disallowance. It was further contended by the ld. AR that the benefit of TDS deposit made against this disallowance has not been taken in the computation of income for A.Y.2015-2016, copy of computation of income was also filed by the assessee during the course of appellate proceedings. However, as per the amended provisions of Section 40(a)(ia) of the Act vide Finance Act, 2014 w.e.f. 1st April, 2015, 100% disallowance made u/s.40(a)(ia) of the Act has been restricted to 30% and this amendment is curative one having retrospective effect. Therefore, the actual addition (100% disallowance) upheld by the CIT(A) may kindly be restricted to 30%. In this regard, ld. AR relied on the following case laws :- i) Tripura State Electricity Corporation Ltd., (2019) 33 NYPTT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m(s) on account of non-deduction of TDS. His case is that the assessee had not availed any technical services from its payees. The fact remains that this taxpayer has not tendered any details of the actual nature of expenditure. We therefore find no reason to disagree with the lower authorities' conclusion quoting assessee's failure in filing the relevant details. Coupled with this, the fact also remains that the legislature has itself amended Section 40(a)(ia) vide the Finance Act, 2014 w.e.f. 01.04.2015 restricting a disallowance made u/s 40(a)(ia) from 100% to 30% only. This tribunal's order in ITA No. 767/Kol/2016 Dipak Parui vs. JCIT decided on 20.07.2018 holds the above proviso inserted in the Act to be a curative one having retrospective effect. We therefore, direct the Assessing Officer to restrict the impugned disallowance to the extent of 30% only. Necessary computation to follow. This first substantive ground is taken as partly accepted in foregoing terms. Similarly, the Kolkata Bench of the Tribunal in the case of Dipak Parui (supra), wherein it has been held that the amendment w.e.f. 01.04.2015 to be retrospective effect being curative nature and observ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted that there is no mention in the amendment that the same shall be applied retrospectively, however, in our considered opinion, if a statute is curative of the previous law, retrospective operation is generally intended. The Hon ble Supreme Court in the case of CIT vs. Calcutta Export Company, [2018] 93 taxmann.com 51 (SC), while deciding the issue as to whether amendment made by Finance Act, 2010, to provisions of section 40(a)(ia) is curative in nature and it should be given retrospective operation from date of insertion of said provision i.e. with effect from assessment year 2005-06, has held as under :- The purpose for bringing said amendment is to ensure tax compliance. The fact that the intention of the legislature was not to punish the assessee is further reflected from a bare reading of the provisions of section 40(a)(ia). It only results in shifting of the year in which the expenditure can be claimed as deduction. In a case where the tax deducted at source was duly deposited with the Government within the prescribed time, the said amount can be claimed as a deduction from the income in the previous year in which the TDS was deducted. However, when the amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4-85. The Calcutta High Court in the case of CIT v. Sri Jagannath Steel Corpn. [1991] 191 ITR 676 , has taken a similar view holding that the statutory liability for sales-tax actually discharged after the expiry of the accounting year in compliance with the relevant statute is entitled to deduction under section 43B. The High Court has held the amendment to be clarificatory and, therefore, retrospective. The Gujarat High Court in the above case held the amendment to be curative and explanatory and hence retrospective. The Patna High Court has also held the amendment inserting the first proviso to be explanatory in the case of Jamshedpur Motor Accessories Stores v. Union of India [1991] 189 ITR 70/ 54 Taxman 521. It has held the amendment inserting first proviso to be retrospective. The special leave petition from this decision of the Patna High Court was dismissed. The view of the Delhi High Court, therefore, that the first proviso to section 43B will be available only prospectively does not appear to be correct. As observed by G.P. Singh in his Principles of Statutory Interpretation, Fourth edn., page 291, It is well-settled that if a statute is curative or merely declaratory of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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