The issue involved in the present appeal has now been decided by the Hon’ble Calcutta High Court in the case of CIT v. Virgin Creation in GA No. 3200/2011 dated 23-11-2011 against the Revenue. However, it is noteworthy that the Special Bench of ITAT Mumbai in the case of Bharati Shipyard Ltd. v. DCIT in ITA No.2404/Mum/2009 in order dated 12-09-2011 has taken a view that the amendment is prospective in nature and would apply accordingly. Respectfully following the decision of Hon’ble Calcutta High Court in the case of Virgin Creators (supra) the order of Ld. CIT(A) is not sustainable. Hence, this ground of assessee’s appeal is allowed. The Assessing Officer is directed to delete the dis allowance of Rs.3,69,568/- as made u/s. 40(a)(ia) of the Act.
INCOME TAX APPELLATE TRIBUNAL, AHMEDABAD
ITA No. 2869/Ahd/2011 – Assessment Year: 2005- 06
M/s. Alpha Projects Society P. Ltd V/s. DCIT
Date of Pronouncement 23-03-2012
O R D E R
PER Kul Bharat, Judicial Member:-
The present appeal has been filed by the assessee against the order directed by Ld. Commissioner of Income-tax (Appeals)-I, Baroda dated 14-09- 2011 for assessment year 2005-06.
2. The facts in brief are that the in this case the assessment u/s. 143(3) of the Income-tax Act, 1961 was completed on 24-04-2007. Subsequently it was noticed by the Assessing Officer that the income chargeable to tax has escaped income and a notice u/s. 148 of the Act after recording the reasons u/s. 147 of the Act was served upon the assessee on 22-02-2010. The reasoning given for reopening of the assessment reproduced as under:-
“From the perusal of the return of income filed by the assessee it is seen that assessee company made payment to contractors and to professional and technical service. TDS was deducted on various dates from April 2004 to Feb 2005, but paid after the financial year i.e. 313.2005 i.e. assessee had remitted the TDS amount in govt. Account on 11.4.2005 and 6.4.2005.
