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TMI Blog2013 (6) TMI 895X X X X Extracts X X X X X X X X Extracts X X X X ..... 2008, the Assessing Officer has disallowed job charges amounting to ₹ 1,04,80,591/- and forwarding & transportation charges of ₹ 11,22,430/- u/s 40(a)(ia) of the Income-tax Act, 1961, against this order of Assessing Officer dated 30.12.2008, the assessee filed appeal before the CIT(A). It was dismissed for non appearance of assessee before the CIT(A) vide order dated 30.10.09. Against this order of CIT(A), the assessee preferred appeal before the I.T.A.T., and vide order dated 26.3.2010, the matter was restored to the file of Assessing Officer by the Tribunal for decision thereon as per law after giving due opportunity of being heard to the assessee. In the fresh assessment order framed u/s 143(3) read with Section 254 dated 29.12.2011, the Assessing Officer has again upheld the disallowance so made. By the impugned order, the ld. CIT(A) deleted the disallowance partly by following the decision of the I.T.A.T. Special Bench in the case of Merilyn Shipping & Transport, 146 TTJ 1, Vishakhapattnam Bench. The precise observation of the CIT(A) was as under :- "4.1.5 It is held by the Hon'ble Special Bench, Vishakhapattnam that - "The legislature intent is clear from t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere tax is paid for transferring the money from one pocket of a person to his another pocket and this is only a cost sharing arrangement. In support of his contention it has placed reliance on the decisions of Bombay High Court. The appellant has not raised these issues before the Assessing Officer and not taken these in their grounds of appeal, therefore contention of the appellant could not be accepted. These are the fresh issues and argument of the appellant on these issues could not be admitted at this stage. These grounds of the appeal of the appellant are partly allowed. 5. In the result, appeal is partly allowed." 3. Against this order of CIT(A), both assessee and Revenue are in appeal before us. 4. Shri R. A. Verma, Sr. DR, appeared on behalf of the Revenue and contended that the decision of ld. CIT(A) is based on the verdict of Hon'ble I.T.A.T., Special Bench, Visakhapattnam in the case of Merilyn Shipping and Transport vs. Addl. CIT, (2012) 146 TTJ 1 (Visakha)(SB). The Hon'ble High Court of Andhra Pradesh in the appeal No. I.T.T.A.M.P. No.908 of 2012 in I.T.T.A.No.384 of 2012 vide order dated 18.10.2012 in the case of CIT-1 Visakhapatnam vs. Merilyn Shippin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not justified in deleting the addition by following the same. 8. With regard to the provisions of Section 40(a)(ia) and 201(1) amendment was brought in by Finance Act, 2012, the same are clarificatory in nature in so far as proviso so inserted are only remedies to make the provisions workable. Hon'ble Apex Court in the case of Allied Motors Private Limited (supra) and Vinay Cement (supra) have also treated similar provisions as curative in nature, therefore, applicable retrospectively. Hon'ble Kolkata High Court also in the case of Virgin Creators have taken the same view. Coordinate Bench of I.T.A.T., Indore in the case of ACIT vs. R.M. Chemicals, I.T.A.No. 461/Ind/2012, had also taken the same view. Proviso 1 and 2 to Section 40(a)(ia) have been duly amended by the Finance Act, 2010, and 2012, which reads as under :- "Any interest, commission or brokerage, fees for professional services or fees for technical services payable to a resident, or amounts payable to a contractor or sub contractor, being resident, for carrying out any work (including supply of labour for carrying out any work), on which tax is deductible at source under Chapter XVII-B and such tax has not b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held that in view of the decision of Hon'ble Kolkata High Court in the case of Virgin Creations amendment brought in by the Finance Act, 2010, were retrospective from 1.4.2005. In the case of Piyush C.Mehta, I.T.A.T., Mumbai Bench in I.T.A. No. 1231/Mum/2009 vide order dated 11th April, 2012, held as under :- "17. It can be seen from the above decision of the Hon'ble Calcutta High Court that Amendment to the provisions of Sec.40a(ia) of the Act, by the Finance Act, 2010 as aforesaid was held to be retrospective from 1.4.2005. If the amendment is considered as retrospective from 1.4.2005, the effect will be that payments of TDS to the credit of the Government on or before the last date for filing return of income u/s. 139(1) of the Act for the relevant AY have to be allowed & deduction. Admittedly, in the case of the Assessee payments were so made before the said due date and in terms of the decision of the Hon'ble Calcutta High Court no disallowance could be made by the AO u/s. 40(a)(ia) of the Act. 18. The question now is as to whether to follow the decision of the Hon'ble Special bench which has taken the view that Amendment by the Finance Act, 2010 to the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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