The Tax Publishers2020 TaxPub(DT) 2813 (Karn-HC) : (2020) 273 TAXMAN 0162

INCOME TAX ACT, 1961

Section 40(a)(ia)

Amendment made by Finance Act, 2010 in section 40(a)(ia) being curative in nature is required to be given retrospective operation.

Business disallowance under section 40(a)(ia) - Applicability of provision - Amendment brought in Finance Act, 2010 in section 40(a)(ia) whether retrospective in nature -

Issue arose as to whether amendment made by Finance Act, 2010 in section 40(a)(ia) is required to be given retrospective operation. Held: Issue whether aforesaid amendment being curative in nature has retrospective operation was considered by Supreme Court in case of Calcutta Exports Company and it was held that purpose of amendment made by Finance Act, 2010 is to solve anomalies and proviso was inserted to remedy unintended consequences and to make provision workable. A proviso, which supplies an obvious omission in section is required to be read into section to give it a reasonable interpretation and requires to be treated as retrospective in operation so that a reasonable interpretation can be given to section as a whole. Thus, it was held that amendment made by Finance Act, 2010 in Section 40(a)(ia) being curative in nature is required to be given retrospective operation.

Followed:CIT v. Calcutta Export Company (2018) 404 ITR 654 (SC) : 2018 TaxPub(DT) 2136 (SC) CIT v. Santosh Kumar Shetty (2015) 227 Taxman 170 (Karnataka) : 2015 TaxPub(DT) 0635 (Karn-HC)

REFERRED :

FAVOUR : In assessee's favour

A.Y. :



IN THE KARNATAKA HIGH COURT

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