INCOME TAX ACT, 1961

Section 40(a)(ia)

Business disallowance under section 40(a)(ia) - Non-deduction of tax at source - Applicability of amendment made by Finance Act, 2010 -

Revenue filed appeal against the order of Tribunal deleting the disallowance made by the AO under section 40(a)(ia) holding that the amendment made to section 40(a)(ia) by Finance Act, 2010 would apply retrospectively, though the amendment is made with effect from 1-4-2010. Held: On reading on judgment of Supreme Court in CIT v. Calcutta Export Company [(2018) 93 Taxmann.com 51 (SC) : 2018 TaxPub(DT) 2136 (SC)], it is clear that the amendment made by the Finance Act, 2010 was curative in nature and it should be given retrospective operation as if the amended provision existed even at the time of its insertion. Since the assessee filed its return of income on 17-10-2009, as per the ratio laid down by apex court in said case, assessee should be allowed to claim the benefit of the amendment made by the Finance Act to the provisions of section 40(a)(ia). Revenue had also not produced any contra judgment in support of its claim. Thus, ratio laid down by Supreme Court in CIT v. Calcutta Export Company [(2018) 93 Taxmann.com 51 (SC) : 2018 TaxPub(DT) 2136 (SC)] squarely applies to the facts and circumstances of the present case and accordingly issue was decided in favour of assessee.

Followed:CIT v. Calcutta Export Company [(2018) 93 Taxmann.com 51 (SC) : 2018 TaxPub(DT) 2136 (SC)].

REFERRED :

FAVOUR : In favour of assessee.

A.Y. : 2008-09

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