Case Law Details
CIT Vs. Virgin Creations (Calcutta High Court)-
Court has held that amendment made in section 40(a)(ia) by Finance Act, 2010 is retrospective in nature and would apply from 01.04.2005. The said amendment provides that no dis allowance under section 40(a)(ia) could be made where the TDS has been paid before the due date of filing of return of income. This is first ruling of any High Court on this issue.
Supreme Court, as has been recorded by the learned Tribunal, in the case of Allied Motors Pvt. Ltd. and also in the case of Alom Extrusions Ltd., has already decided that the aforesaid provision has retrospective application. Again, in the case reported in 82 ITR 570, the Supreme Court held that the provision, which has inserted the remedy to make the provision workable, requires to be treated with retrospective operation so that reasonable deduction can be given to the section as well.
Note: It is to be noted that recently the Special Bench of the Tribunal in the case of Bharati Shipyard Ltd. vs.DCIT: 141 TTJ 129 has, however, taken a contrary view whereby it held that the above amendment in section 40(a)(ia) is prospective in nature to be applied w.e.f. 01.04.2011 relevant to AY 2011-12.
IN THE HIGH COURT AT CALCUTTA
ITAT No. 302 of 2011
GA 3200/2011
COMMISSIONER OF INCOME TAX, KOL- XI, KOL
Versus
VIRGIN CREATIONS
Date : 23rd November, 2011.
The Court : We have heard Mr. Nizamuddin and gone through the impugned judgement and order. We have also examined the point formulated for which the present appeal is sought to be admitted.
It is argued by Mr. Nizamuddin that this court needs to take decision as to whether section 40(A) (ia) is having retrospective operation or not.
The learned Tribunal on fact found that the assessee had deducted tax at source from the paid charges between the period April 1, 2005 and April 28, 2006 and the same were paid by the assessee in July and August 2006, i.e. well before the due date of filing of the return of income for the year under consideration. This factual position was undisputed.
Moreover, the Supreme Court, as has been recorded by the learned Tribunal, in the case of Allied Motors Pvt. Ltd. and also in the case of Alom Extrusions Ltd., has already decided that the aforesaid provision has retrospective application. Again, in the case reported in 82 ITR 570, the Supreme Court held that the provision, which has inserted the remedy to make the provision workable, requires to be treated with retrospective operation so that reasonable deduction can be given to the section as well.
In view of the authoritative pronouncement of the Supreme Court, this court cannot decide otherwise. Hence we dismiss the appeal without any order as to costs.
(KALYAN JYOTI SENGUPTA, J.)
(JOYMALYA BAGCHI, J.)
