Parag Engineering Products P. Ltd, ... vs Department Of Income Tax

BEFORE HON'BLE S/SHRI H.L. KARWA, PRESIDENT AND B.R.BASKARAN (AM) सव ी एच.एल. कावा, अ य एवं बी.आर.बा करन, लेखा सद य

आयकर अपील सं./I.T.A. No.5558/Mum/2013 ( नधारण वष / Assessment Year :2007-08)

Income Tax Officer, बनाम/ M/s Parag Engineering Products Ward 9(2)(4), Vs. Pvt Ltd., Room No.261, 6th Floor, 121, ABCD Govt. Industrial Estate Aayakar Bhavan, Charkop, Kandivali8 (W), M K Road, Mumbai-400020 Mumbai-400067 (अपीलाथ /Appellant) .. ( यथ / Respondent)

थायी ले ख ा सं . /जीआइआर सं . /PAN/GIRNo. :AACCP2592D

अपीलाथ ओर से / Assessee by : Shri Neil Phlip. यथ क ओर से/Respondent by : Shri G S Lalka

सन ु वाई क तार ख / Date of Hearing : 31.12.2014 घोषणा क तार ख /Date of Pronouncement : .01.2015

आदे श / O R D E R Per B.R.BASKARAN, Accountant Member:

The appeal filed by the revenue is directed against the order dated 28-06- 2013 passed by Ld CIT(A)-20, Mumbai and it relates to the assessment year 2007-08. The revenue is aggrieved by the decision of Ld CIT(A) in deleting the addition made u/s 40(a)(ia) of the Act.

2. We heard the parties and perused the record. The assessing officer noticed that the assessee has failed to pay the TDS amount within the due date prescribed under the Act. Hence, the AO disallowed the expenditure of Rs.9,08,221/- relating to the belated payment of TDS amount by invoking the provisions of sec. 40(a)(ia) of the Act. Before the Ld CIT(A), the assessee submitted that the TDS amount has been paid before the due date prescribed for filing return of income. It was further submitted that the amendment brought into the sec. 40(a)(ia) by Finance Act 2010 providing for deduction of the expenditure 2 ITA No.5558/M/13

if the TDS payment is made before the due date for filing return of income is held to be retrospective in nature in the following cases:-

(a) Piyush C Mehta (ITA No.1321/Mum/2009)

(b) ITO Vs. Virgin Creations (Calcutta HC - ITA No.302 of 2011).

The Ld CIT(A) was convinced with the same and he further noticed that the Hon'ble Karnataka High Court has expressed identical view in the case of ITO Vs. Anil Kumar and Co. (2013)(354 ITR 170)(Kar). Since the assessee had paid the TDS amount before the due date prescribed for filing return of income for the assessment year under consideration, the Ld CIT(A) deleted the disallowance made u/s 40(a)(ia) of the Act.

3. At the time of hearing, the Ld A.R submitted that the order of Ld CIT(A) is required to be sustained, since the assessee had paid the TDS amount before the due date prescribed for filing return of income. He further submitted that the Hon'ble Gujarat High Court, in the case of CIT Vs. J.K. Construction Co. (2014)(361 ITR 181), has expressed the view that the amendment brought in by the finance Act 2010 should be considered as effective from 1.4.2005.

4. Thus, we notice that the ld CIT(A) has followed the decision rendered by the Hon'ble Calcutta High Court in the case of Virgin Creations (supra) and other high courts and tribunals, wherein it has been held that the amendment brought in by the Finance Act 2010 is retrospective in nature. Hence, if the amended provisions are applied to the facts of the instant case, there was no requirement to make disallowance u/s 40(a)(ia) of the Act. Under these set of facts, we do not find any reason to interfere with the order of Ld CIT(A).

5. In the result, the appeal filed by the revenue is dismissed.

The above order was pronounced in the open court on 7th Jan,2015.

घोषणा खुले यायालय म दनांकः 7th Jan 2015 को क गई ।

sd sd

(एच.एल. कावा/ H.L. KARWA) (बी.आर. बा करन,/ B.R. BASKARAN) अ य / PRESIDENT लेखा सद य/Accountant Member

मब ुं ई Mumbai: 7th Jan, 2015. 3 ITA No.5558/M/13

व. न.स./ SRL , Sr. PS

आदे श क त ल प अ े षत/Copy of the Order forwarded to :

1. अपीलाथ / The Appellant

2. यथ / The Respondent.

3. आयकर आयु त(अपील) / The CIT(A)- concerned

4. आयकर आयु त / CIT concerned

5. वभागीय त न ध, आयकर अपील य अ धकरण, मब ुं ई / DR, ITAT, Mumbai concerned

6. गाड फाईल / Guard file.

आदे शानस ु ार/ BY ORDER, true copy सहायक पंजीकार (Asstt. Registrar) आयकर अपील य अ धकरण, मंब ु ई /ITAT, Mumbai