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TMI Blog2012 (4) TMI 802X X X X Extracts X X X X X X X X Extracts X X X X ..... . Counsel for the assessee stated that the following two are additional grounds: "3. For that the Ld. CIT(A) erred in partly confirming the addition to the extent of ₹ 3,39,68,495/- made by the A.O. u/s. 40(a)(ia) out of the total addition of ₹ 8,12,70,683/- and not allowing the relief in full. 4. For that the Ld. CIT(A) erred in holding that the aforesaid disallowance of ₹ 3,39,68,495/- made u/s. 40(a)(ia) is not eligible for deduction u/s. 80IC" 3. We have heard rival submissions and gone through facts and circumstances of the case. Brief facts leading to the above additional grounds stated by the Ld. Counsel for the assessee are that the Assessing Officer noted in his assessment order that the amount of TDS on expenditure debited to P&L Account was deducted as under: "Delayed payments of TDS: Amt. of tax deducted at source Amt. of exp. On which such tax is deducted at source ₹ 1,07,008/- ₹ 49,68,495/- Rs,15,95,479/- ₹ 7,63,02,188/- ₹ 17,02,487/- ₹ 8,12,70,683/- According to Ld. Counsel, the following are the details of expenditure incurred TDS deducted and paid to government account: Name, Address & PAN of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ments made to the same including the suggestion made by the Industry in the form of representation in their pre-budget memorandum to the Hon'ble Finance Minister and by applying the decision of the Hon'ble Apex Court in the case of Alom Extrusions Ltd., has observed that "The provisions of section 40(a)(ia) as stood prior to the amendments made by the Finance Act 2010 thus were resulting into unintended consequences and causing grave and genuine hardships to the assessees who had substantially complied with the relevant TDS provisions by deducting the tax at source and by paying the same to the credit of the Government before the due date of filing of their returns u/s 139(1). In order to remedy this position and to remove the hardships which was being caused to the assessees belonging to such category, amendments have been made in the provisions of section 40(a)(ia) by the Finance Act 2010. The said amendments, in our opinion, thus are clearly remedial/curative in nature as held by Hon'ble Supreme Court in the case of Allied Motors Pvt. Ltd. (supra) and Mom Extrusions Ltd. (supra) and the same therefore would apply retrospectively w.e.f. 1st April, 2005. In the case of R.B. Jodha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0, the Supreme Court held that the provision, which has inserted the remedy to make the provision workable, requires to be treated with retrospective operation so that reasonable deduction can be given to the section as well. In view of the authoritative pronouncement of the Supreme Court, this court cannot decide otherwise. Hence we dismiss the appeal without any order as to costs. 5. Once the issue is decided by Hon'ble jurisdictional High Court that the amendment in the provisions of section 40(a)(ia) of the Act by Finance Act, 2010 is remedial and curative in nature and TDS paid on or before the due date of filing of return u/s. 139(1) of the Act, deduction in respect to the amount on which TDS is so paid, is allowable. In the present case the assessee deducted tax in March, 2005 but the same was deposited on two different dates i.e. 17.06.2005 and 21.10.2005 for the AY 2005-06, that means the TDS was paid before due date of filing of return u/s. 139(1) of the Act by the assessee, hence, we allow the claim of assessee. This issue of assessee's appeal is allowed. 6. The Ld. Counsel for the assessee further stated that the assessee has revised the ground and the revised groun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee, this issue is squarely covered in favour of assessee and against the revenue by the decision of Hon'ble Guwahati High Court in the case of CIT Vs. Meghalaya Steels Ltd. (2011) 332 ITR 91 (Gau) wherein it has been held as under: "The Central Board of Excise and Customs in its circular dated December 19, 2002 clarified that the refund is not on account of excess payment of excise duty but is basically designed to give effect to the exemption and to operationalise the exemption given by the notifications. In that sense, the Central excise duty refund does not appear to bear the character of income since what is refunded to the assessee is the amount paid under the modalities provided by the Department of Revenue for giving effect to the exemption notifications. There is also nothing to suggest that the assessee has recovered or passed on the excise duty element to its customers. Even assuming the refund does amount to income in the hands of the assessee, it is a profit or gain directly derived by the assessee from its industrial activity. The payment of Central excise duty has a direct nexus with the manufacturing activity and similarly, the refund of the Central excise duty a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transport subsidy that "considering the undisputed fact that the subsidy is an aid to the assessee for which the immediate source is the Government, it is an incidental income on account of the newly established industrial undertaking which has been given by the Government under the scheme. Therefore, it cannot be treated as part of the profits and gains 'derived from' an industrial undertaking of the assessee"." Considering the above, in the case of M/s. Brahmaputra Carbon Limited, the assessee, the income under narration "Other Income" consisting of interest income of ₹ 28,108/- and transport subsidy of ₹ 1,22,89,642/- is held not to be eligible for deduction u/s.80- IC as claimed by the assessee. Therefore, if the "other income" of ₹ 1,23,17,750/ - is taken aside and not considered for deduction U/s.801C, the total income which would be eligible for deduction u/s.80-IC would be as under: Aggrieved, assessee preferred appeal before CIT(A), who also confirmed the action of Assessing Officer. Aggrieved, assessee came in appeal before us. 11. We find that the assessee before us contended that this income also does fall under the category of exempted income as t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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