TMI Blog2022 (4) TMI 1067X X X X Extracts X X X X X X X X Extracts X X X X ..... ue on the income declared by it in the said return - HELD THAT:- We find that the issue is settled in PERFECT CIRCLE INDIA PVT LTD [ 2019 (1) TMI 1532 - BOMBAY HIGH COURT] held as the insertion of the 2nd proviso to section 40(a)(ia) of the Act was declaratory and curative in nature, therefore, the same would have a retrospective effect from 01.04.2005 i.e., the date of insertion of Section 40(a)(ia) - even in absence of the 2nd proviso to Section 40(a)(ia) of the Act, had held, that where a payee had already paid the tax, then, in such circumstances, the payer/deductor can only be asked to pay the interest qua the delay in depositing of the tax - See M/S. HINDUSTAN COCA COLA BEVERAGE PVT. LTD VERSUS COMMISSIONER OF INCOME TAX [ 2007 ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ORDER Per Ravish Sood, JM The present appeal filed by the assessee is directed against the order passed by the CIT(Appeals)-2, Panaji, dated 22.12.2017, which in turn arises from the order passed by the A.O. under Sec. 143(3) of the Income-tax Act, 1961 [in short Act ], dated 25.03.2015 for A.Y. 2012-13. The assessee has assailed the impugned order by raising the following grounds before us: 1. In the facts and circumstances of the case the Commissioner of Income Tax(Appeals) Panaji Goa erred in confirming the action of the Assessing officer of disallowing the construction expenses of ₹ 29,00,838/- u/s. 40(a)(ia) of I.T. Act on the ground that no taxes were deducted at source from contractual payments related to said e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 40(a)(ia) is declaratory and curative and hence has retrospective effect from 01.04.2005. The Appellant craves leave to add, alter, amend or modify any of the above grounds of the appeal. 2. Succinctly stated, the solitary controversy involved in the present appeal hinges around the disallowance under section 40(a)(ia) of the Income-Tax Act, 1961 of the assessee's claim for deduction of construction expenses of ₹ 29,00,838/- that were payable by the assessee to M/s. Buildtech Real Estate Developers [in short M/s. BRED ] on 31.03.2012. As is discernible from the orders of the lower authorities, the assessee had credited contract charges of ₹ 2,23,49,460/- to M/s. BRED i.e., a firm in which it was one of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held as an assessee-in-default, and as a consequence thereto the said amount could not be disallowed under Sec. 40(a)(ia) of the Act in her hands. However, the A.O. was not persuaded to subscribe the aforesaid claim of the assessee and rejected the same. It was observed by the A.O. that as the 2nd proviso to section 40(a)(ia) was made available on the statute by the legislature vide the Finance Act, 2012 i.e., w.e.f. 01.04.2013, therefore, the same would not come to the rescue of the assessee for the year under consideration i.e., A.Y. 2012-13. Backed by his aforesaid conviction the A.O. disallowed under Section 40(a)(ia) the assessee's claim for deduction of construction expenses of ₹ 29,00,838/-. 3. On appeal, the CIT(A) co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prospective in nature and cannot be applied retrospectively? Answering the aforesaid question of law, the Hon'ble jurisdictional High Court had after drawing support from the judgment of the Hon'ble High Court of Delhi in the case of CIT vs. Ansal Landmark Township (P.) Ltd., 61 taxmann.com 45 (Del.) observed, that as the insertion of the 2nd proviso to section 40(a)(ia) of the Act was declaratory and curative in nature, therefore, the same would have a retrospective effect from 01.04.2005 i.e., the date of insertion of Section 40(a)(ia) of the Act. Apart from that, it was observed by the Hon'ble High Court that the Hon'ble Apex Court had way back in the case of Hindustan Coca Cola Beverage P. Ltd. vs. CIT, 293 ITR 22 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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