M/s. Kishan Mal Oil Cotton & Ginning Factory, Distt.Bathinda V. The Income-tax Officer, Bathinda

CO 3/ASR/2014

• Counselvise Citation: [2016] 112 COUNSELVISE.COM (IT) 4031 (ITAT-AMRITSAR)
• Duration Of Justice: 2 year(s) 4 month(s) 29 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 18-07-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 30-05-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 19-02-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: UMESH TAKYAR DR ITA NOS; ASR ASST YEAR
• Assessee Lawyers: P N ARORA; PARSHOTAM K SINGLA
• Keywords: Opportunity of being heard; Retrospective amendment; TDS; Set aside
• Section: 43B; 40(a)(ia); 194C; 201; 274; 207; 139(1); 6

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR BEFORE SH. A.D.JAIN, JUDICIAL MEMBER AND SH. T.S. KAPOOR, ACCOUNTANT MEMBER I.T.A NO.268(ASR)/2010 ASSESSMENT YEAR: 2007-08 I.T.A NO. 346(ASR)/2012 ASSESSMENT YEAR: 2008-09 M/S. KISHAN MAL OIL COTTON & GINNING FACTORY, RAMPURA PHUL. AADFK4906E VS. ITO, WARD-1(3), BATHINDA. (APPELLANT) (RESPONDENT) I.T.A NO. 714 (ASR)/2 013 ASSESSMENT YEARS: 2005-06 I.T.A. NO. 715(ASR)/ 2013 ASSESSMENT YEARS: 2006-07 ITO, WARD-1(3), BATHINDA. VS. M/S. KISHAN MAL OIL COTTON & GINNING FACTORY, RAMPURA PHUL. AADFK4906E (APPELLANT) (RESPONDENT) CROSS OBJECTION NOS. 03 & 04 (ASR)/201 4 ARISING OUT OF ITA NOS.714 & 715(ASR)/2014 ASST. YEARS:2005-06 & 2006-07 M/S. KISHAN MAL OIL COTTON & GINNING FACTORY, RAMPURA PHUL. AADFK4906E VS. ITO, WARD-1(3), BATHINDA. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. P.N.ARORA & SH. PARSHOTAM K. SINGLA, (ADV.) RESPONDENT BY: SH. UMESH TAKYAR, (DR) ITA NOS.714 & 715 (ASR)/2013 ASST. YEAR: 2005-06 & 2006-07 ITA NOS.268 & 346 (ASR)/2012 ASST. YEAR 20 07-08 & 2008-09 2 DATE OF HEARING: 30.05.2016 DATE OF PRO NOUNCEMENT: 18.07.2016 ORDER PER T. S. KAPOOR (AM): THIS IS A BUNCH OF FOUR APPEALS, TWO FILED B Y REVENUE AGAINST THE SEPARATE ORDERS OF LEARNED CIT(A), BATHINDA, BOTH D ATED 30.09.2013. THE ASSESSEE HAS ALSO FILED CROSS OBJECTIONS IN THESE A PPEALS. ITA NO.268(ASR)/2010 & ITA NO.346(ASR)/2012 HAS BEEN FI LED BY ASSESSEE AGAINST THE SEPARATE ORDERS OF LEARNED CIT(A), BATH INDA, DATED 15.04.2010 & 21.06.2012 RESPECTIVELY. 2. THE APPEALS FILED BY ASSESSEE IN ITA NO.268(ASR) /2010 AND 346(ASR)/2012 WERE EARLIER DISMISSED VIDE TRIBUNAL ORDER DATED 23.07.2013, HOWEVER, VIDE TRIBUNAL ORDER DATED 30.0 1.2015 THESE WERE RECALLED AND APPEALS WERE LISTED FOR HEARING ON GRO UND NOS.2 TO 5. FOR THE SAKE OF CONVENIENCE THE GROUNDS OF APPEAL IN ITA NO . 268 & 346 AS MENTIONED IN GROUND NO.2 TO 5 ARE REPRODUCED BELOW. ITA NO.268(ASR)/2010 FOR ASS. YEAR:2007-08. 2. ON THE FACTS & CIRCUMSTANCES OF THE CASE AND I N LAW, LD. CIT(A) WAS NOT CORRECT IN HOLDING THAT THE PROVISIONS OF SECTION 1 94C ARE APPLICABLE TO THE ASSESSEE APPELLANT FIRM WHEREAS AS PER EXPLANATION AND OTHER MATERIAL ON RECORD THE ASSESSEE WAS NOT HELD DEFAULTER BY THE D EPARTMENT TILL THE ADDITION HAS BEEN MADE ON ACCOUNT OF VIOLATION OF P ROVISIONS OF SECTION 44AB OF THE ACT. 3. ON THE FACTS & CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN HOLDING THAT THE ASSESSEE APPELLANT HAS NO T PAID THE TDS BEFORE THE ITA NOS.714 & 715 (ASR)/2013 ASST. YEAR: 2005-06 & 2006-07 ITA NOS.268 & 346 (ASR)/2012 ASST. YEAR 20 07-08 & 2008-09 3 DUE DATE OF FILING OF RETURN WHEREAS AS PER SETTLED LAW IF THE DUE TAX HAS BEEN PAID BY THE PAYEE AS PER THE RETURN, NO TDS IS REQUIRED TO BE PAID BY THE PAYER. 4. ON THE FACTS & CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) IS NOT CORRECT IN REJECTING THE SUBMISSIONS OF THE ASSESSE E APPELLANT IN THE SUMMARY WAY ON ACCOUNT OF PAYMENT MADE TO THE LABOU R DIRECTLY EMPLOYED BY THE ASSESSEE APPELLANT, THROUGH ONE PERSON OUT O F THEM FOR CONVENIENCE, AND NO THROUGH ANY CONTRACTOR. 5. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW THE LD. CIT(A) HAS ERRED IN HOLDING THAT THE ASSESSEE APPELLANT IS REQUIRED TO DEDUCT TDS ON ACCOUNT OF COST OF HASSIAN PATTI & CLOTH WHEREAS THE SAME IS NOT LIABLE TO TDS. ITA NO.346(ASR)/2012 FOR ASST. YEAR:2008-09 2. ON THE FACTS & CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) NOT CORRECT IN HOLDING THAT THE PROVISIONS OF SECTION 1 94C ARE APPLICABLE TO THE ASSESSEE APPELLANT FIRM WHEREAS PER EXPLANATION AN D OTHER MATERIAL PLACED ON RECORD THE ASSESSEE WAS NOT HELD DEFAULTER BY TH E DEPARTMENT TILL THE ADDITION HAS BEEN MADE ON ACCOUNT OF VIOLATION OF P ROVISIONS OF SECTION 194C AND ALSO BY THE CHARTERED ACCOUNTANT WHO AUDITED TH E ACCOUNTS UNDER SECTION 44AB OF THE ACT. 3. ON THE FACTS & CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN HOLDING THAT THE ASSESSEE APPELLANT HAS NO T PAID THE TDS BEFORE THE DUE DATE OF FILING OF RETURN, AS SUCH, IS A ASSESSE E IN DEFAULT. WHEREAS AS PER SETTLED LAW IF THE DUE TAX HAS BEEN PAID BY THE PAYEE AS PER THE RETURN, NO TDS IS REQUIRED TO BE PAID BY THE PAYER. THE DUE TAX HAS BEEN PAID BY THE FIRM M/S LAXMI COTTON MILLS, THE PAYEE, THEREFO RE, AS PER CLARIFICATION MADE BY THE PARLIAMENT BY AMENDING SECTION 201, THE ASSESSEE APPELLANT IS NOT DEEMED TO BE IN DEFAULT. 4. ON THE FACTS & CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) IS NOT CORRECT IN REJECTING THE SUBMISSIONS OF THE ASS ESSEE APPELLANT IN THE SUMMARY WAY ON ACCOUNT OF PAYMENT MADE TO THE LABOU R DIRECTLY EMPLOYED ITA NOS.714 & 715 (ASR)/2013 ASST. YEAR: 2005-06 & 2006-07 ITA NOS.268 & 346 (ASR)/2012 ASST. YEAR 20 07-08 & 2008-09 4 BY THE ASSESSEE APPELLANT, THROUGH ONE PERSON OUT O F THEM FOR CONVENIENCE, AND NOT THROUGH ANY CONTRACTOR. 5. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW THE LD. CIT(A) HAS ERRED IN HOLDING THAT THE ASSESSEE APPELLANT IS REQUIRED TO DEDUCT TDS ON ACCOUNT OF COST OF HASSIAN PATTI & CLOTH WHEREAS THE SAME IS NOT LIABLE TO TDS. 3. THE GRIEVANCE OF REVENUE RAISED IN ITA NO.714 &7 15(ASR)/2013 ARE SIMILAR, WHEREIN THE REVENUE IS AGGRIEVED WITH THE ACTION OF LEARNED CIT(A) BY WHICH HE HAD ALLOWED RELIEF TO THE ASSESSEE ON A CCOUNT OF DISALLOWANCE MADE BY ASSESSING OFFICER U/S 40(A)(IA) OF THE ACT. 4. ALL THESE APPEALS WERE HEARD TOGETHER AND COMMON ISSUES ARE INVOLVED IN THESE APPEALS, THEREFORE, FOR THE SAKE OF CONVENIENCE A COMMON AND CONSOLIDATED ORDER IS BEING PASSED. 5. FIRST OF ALL, WE TAKE UP THE APPEAL IN ITA NO.71 4 & 715(ASR)/2013 FILED BY REVENUE. 6. THE BRIEF FACTS OF THE CASE AS NOTED IN THE ASSE SSMENT ORDER ARE THAT ASSESSEE FIRM IS RUNNING A COTTON GINNING FACTORY A T RAMPURA PHUL. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS OBSERV ED BY ASSESSING OFFICER THAT ASSESSEE HAD MADE PAYMENTS OF GINNING AND PROC ESSING CHARGES TO THE TUNE OF RS.58,33,3000/- AND RS.65,55,740/- RESP ECTIVELY IN TWO YEARS TO M/S LAXMI COTTON MILLS. THE ASSESSING OFFICER NO TED THAT ASSESSEE WAS REQUIRED TO DEDUCT TDS U/S 194C OF THE ACT WHILE MA KING PAYMENTS OF THE ABOVE EXPENSES, BUT THE ASSESSEE HAD NOT DEDUCTED T HE TAX. ACCORDINGLY ITA NOS.714 & 715 (ASR)/2013 ASST. YEAR: 2005-06 & 2006-07 ITA NOS.268 & 346 (ASR)/2012 ASST. YEAR 20 07-08 & 2008-09 5 SINCE THE ASSESSEE HAD FAILED TO DEDUCT TAX AT SOUR CE OUT OF THE ABOVE EXPENSES, THEREFORE, ASSESSING OFFICER HELD THE ASS ESSEE TO HAVE VIOLATED THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT AND IN VIEW OF THE ABOVE, AFTER OBTAINING EXPLANATION OF THE ASSESSEE THE ASSESSING OFFICER MADE DISALLOWANCE FOR THE SAME BY HOLDING SIMILAR FINDIN GS IN THE TWO YEARS. FOR THE SAKE OF CONVENIENCE THE FINDINGS AS CONTAINED I N ITA NO.714(ASR)/2013 ARE REPRODUCED BELOW. 4. THE CONTENTIONS RAISED BY THE ASSESSEE HAVE BEE N CONSIDERED CAREFULLY. PROVISIONS OF SECTION 40(A)(IA) OF THE A CT CLEARLY/UNAMBIGUOUSLY STIPULATE/MANDATE THAT WHERE TAX IS DEDUCTIBLE AT SOURCE UNDER CHAPTER XVIIB AND SUCH TAX HAS NOT BEEN DEDUCTED IN ANY Y EAR OR AFTER DEDUCTION HAS NOT BEEN PAID ON OR BEFORE THE SPECIFIED DUE DATE; SUCH SUM SHALL NOT BE ALLOWED AS DEDUCTION IN COMPUTING THE INCOME OF THAT PREVIOUS YEAR. HENCE, EXPENSES CLAIMED UNDER THE HEADS GINNING & P RESSING CHARGES AT RS.58,33,300/- AND CARTAGE (LABOUR) AT RS.10,00,400 /- ARE NOT ALLOWABLE IN VIEW OF THE PROVISIONS OF SECTION U/S 40(A)(IA) OF THE ACT AS THE PAYMENTS HAVE BEEN MADE WITHOUT DEDUCTION OF TAX AT SOURCE. THE CONTENTION RAISED BY THE ASSESSEE THAT THE LD. CIT(APPEALS) HAS DECID ED THE ISSUE IN FAVOUR OF THE ASSESSEE HAS ALSO BEEN CONSIDERED CAREFULLY, BU T IS HARDLY TENABLE. IN THIS CONNECTION, IT IS RESPECTFULLY SUBMITTED THAT ORDER OF THE LD. CIT(APPEALS) HAS NOT BEEN ACCEPTED BY THE DEPARTMENT AND THE SEC OND APPEAL HAS BEEN PREFERRED BEFORE THE HONBLE ITAT, AMRITSAR, WHICH IS STILL PENDING. AS THE ORDER OF THE LD. CIT(APPEALS) HAS NOT BEEN ACCEPTED AND THE FACTS OF THE CASE BEING SIMILAR & IDENTICAL, THE VARIOUS ARGUMENTS PU T FORTH BY THE ASSESSEE, REFERRED TO ABOVE, ARE CONSIDERED AND REJECTED. ACC ORDINGLY, EXPENSES CLAIMED UNDER THE HEADS GINNING & PRESSING CHARGES AT RS.58,33,300/- AND CARTAGE (LABOUR) AT RS.10,00,400/-, TOTALING TO RS.68,33,700 ARE HEREBY ITA NOS.714 & 715 (ASR)/2013 ASST. YEAR: 2005-06 & 2006-07 ITA NOS.268 & 346 (ASR)/2012 ASST. YEAR 20 07-08 & 2008-09 6 DISALLOWED U/S 40(A)(IA) OF THE ACT AND ADDED TO TH E INCOME OF THE ASSESSEE. 7. AGGRIEVED THE ASSESSEE FILED APPEAL BEFORE LEARN ED CIT(A) AND FILED VARIOUS SUBMISSIONS AND IT WAS SUBMITTED THAT ABOUT M/S LAXMI COTTON MILLS HAD DECLARED THESE AMOUNTS RECEIVED FROM ASSE SSEE IN ITS P & L ACCOUNT AND HAD DECLARED THE SAME IN THE INCOME TAX RETURNS FOR THE TWO YEARS AND IT WAS ALSO SUBMITTED THAT THE SAID M/S L AXMI COTTON MILLS IS BEING ASSESSED BY THE SAME ITO HAVING JURISDICTION IN THE CASE OF ASSESSEE APPELLANT, AND IN VIEW OF THE ABOVE, IT WAS SUBMITT ED THAT M/S LAXMI COTTON MILLS HAD DECLARED THE INCOME RECEIVED FROM ASSESSEE IN ITS RETURN OF INCOME AND THEREFORE THE DISALLOWANCE MAY BE DEL ETED. THE ASSESSEE PLACED HIS RELIANCE ON A NUMBER OF CASE LAWS WHICH ARE NOTED BY LEARNED CIT(A) AT PAGE 4 & 5 OF HIS ORDER. THE LEARNED CIT( A) AFTER HEARING THE ASSESSEE ALLOWED RELIEF TO THE ASSESSEE ON ACCOUNT OF PAYMENTS MADE TO M/S LAXMI COTTON MILLS BY RECORDING SIMILAR FINDING S. FOR THE SAKE OF CONVENIENCE THE FINDINGS AS RECORDED BY LEARNED CIT (A) IN ITA 714(ASR)/2013 ARE REPRODUCED BELOW. 8 TH GROUND OF APPEAL TAKEN BY ASSESSEE APPELLANT IS RE GARDING MAKING DISALLOWANCE AS PER DETAILS PLACED ON RECORD THAT NO AMOUNT ON ACCOUNT OF GINNING & PRESSING CHARGES REMAIN PAY ABLE AT THE END OF THE YEAR. AS SUCH, PROVISIONS OF SECTION 40(A)(I A) ARE NOT APPLICABLE IN THE CASE OF THE ASSESSEE APPELLANT. DURING THE A PPELLANT PROCEEDINGS FOR THE ASSESSMENT YEAR 2008-09. I HAD DECIDED THIS ISSUE IN FAVOUR OF THE ASSESSEE APPELLANT BUT THE H ONBLE ITAT, AMRITSAR BENCH, AMRITSAR HAS SET ASIDE MY ORDER ON ACCOUNT OF THIS ITA NOS.714 & 715 (ASR)/2013 ASST. YEAR: 2005-06 & 2006-07 ITA NOS.268 & 346 (ASR)/2012 ASST. YEAR 20 07-08 & 2008-09 7 GROUND OF APPEAL BY ALLOWING THE APPEAL OF THE DEPA RTMENT AND CONFIRMED THE ADDITION MADE BY THE AO AND DELETED B Y ME. SO KEEPING IN VIEW OF THE JUDGMENT OF THE HONBLE ITAT AMRITSAR BENCH, THIS GROUND OF APPEAL OF THE ASSESSEE APPELLANT IS ALSO REJECTED. 10 TH GROUND OF APPEAL OF THE ASSESSEEA APPELLANT IS AS UNDER: 10. WITHOUT PREJUDICE TO THE ABOVE, THE LEARNED AO HAS ERRED IN LAW AND ON FACTS IN MAKING DISALLOWANCE OF RS. 65,59,74 0/- ON ACCOUNT OF PAYMENTS MADE WITHOUT DEDUCTION OF TAX, WITHOUT CON SIDERING THAT M/S LAKSHMI COTTON MILLS, RAMPURA PHUL HAD FILED IT S INCOME TAX RETURN AND PAID THE TAX DUE THEREON BEFORE THE DUE DATE OF FILING OF RETURN. AS SUCH, LIABILITY ON ACCOUNT OF PAYMENT OF TDS DISCHARGED BEFORE THE DUE DATE FOR FILING OF RETURN. THEREFORE , DISALLOWANCE OF EXPENDITURE MADE IS AGAINST THE PROVISIONS OF THE A CT. AS SUCH, THE SAME BE ALLOWED. SAME GROUND OF APPEAL HAS BEEN TAKEN BY THE ASSESSE E APPELLANT DURING THE APPELLATE PROCEEDINGS AS GROUND OF APPEA L NO. 8 AND I HAD REJECTED THIS GROUND OF APPEAL OF THE ASSESSEE APPE LLANT BY OBSERVING AS UNDER:- THE EIGHTH GROUND OF APPEAL TAKEN BY THE APPELLANT IS THAT SINCE THE PAYEE HAS PAID THE FULL TAX AT THE TIME OF FILING OF RETU RN WHICH WAS FILED BEFORE THE DUE DATE OF FILING OF RETURN BY APPELLANT. THEREFOR E, THERE IS NO LIABILITY WHICH REMAINED OUTSTANDING AND AS SUCH, NO DISALLOWANCE I S CALLED FOR IN-VIOLATION OF PROVISIONS OF SECTION 194C OF THE ACT. THIS GROUND HAS ALSO BEEN TAKEN DURING THE APPELLAN T PROCEEDINGS FOR THE ASSESSMENT YEAR 2007-08 WITH THE SIMILAR SUBMISSION S BUT DURING THE PROCEEDINGS BEFORE ME THE LEARNED COUNSEL HAS FURTH ER TAKEN THE PLEA THAT NOW THIS ISSUE HAS BEEN CLARIFIED BY THE PARLIAMENT BY AMENDING THE DEFINITION OF ASSESSEE DEEMED TO BE IN DEFAULT BY AMENDING SECTION 201 AND 40(A)(IA) OF THE ACT. AS SUCH, THE ADDITION MAD E IN THIS CASE HAS TO BE DELETED. I HAVE CONSIDERED THE SUBMISSIONS OF THE A PPELLANT BUT FIND THAT THERE IS NO FORCE AS THE AMENDMENT MADE IS APPLICAB LE W.E. F. 01-04-2013, AS SUCH, THIS GROUND OF APPEAL IS ALSO DISMISSED. BUT NOW THE ASSESSEE APPELLANT HAS BROUGHT TO MY NO TICE THE LATEST JUDGMENT DELIVERED BY THE HONBLE DELHI HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. RA\\NDER KUMAR (2013 ) 260 CTR 113 (DEL.) DATED 1 ST JULY, 2013. ACCORDING TO THE A/R OF THE ASSESSEE A PPELLANT THE HONBLE DELHI HIGH COURT AFTER RELYING UPON THE JUD GMENT OF THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS. VIRGIN C REATIONS (IT APPEAL NO. 302 OF 2011 & GA NO. 3200 OF 2011 DECIDED BY THE HO NBLE CALCUTTA HIGH COURT ON 23 RD NOV., 2011 AND THE HONBLE SUPREME COURT IN THE CA SE OF ALLIED MOTORS (P) LTD. VS. CIT (1997) 139 CTR (SC) 364 AND CIT VS ALOM ITA NOS.714 & 715 (ASR)/2013 ASST. YEAR: 2005-06 & 2006-07 ITA NOS.268 & 346 (ASR)/2012 ASST. YEAR 20 07-08 & 2008-09 8 EXTRUSIONS LTD., (2009) 227 CTR (SC) 417 HAS HELD A S PER PARA 22, 23, 24, 25 OF THE JUDGMENT THAT THE AMENDMENT MADE TO SECTI ON 40(A)(IA) VIDE FINANCE ACT, 2010 SHOULD BE TREATED AMENDED AS RETR OSPECTIVELY. THE RELEVANT PARAS OF THE JUDGMENT OF HONBLE COURT ARE RE-PRODUCED HERE AS UNDER:- 22. NOW, WE REFER TO THE AMENDMENTS WHICH HAVE BEE N MADE BY FINANCE ACT, 2010 AND THE EFFECT THEREOF. WE HAVE ALREADY Q UOTED THE DECISION OF THE CALCUTTA HIGH COURT IN VIRGIN CREATIONS (SUPRA). TH E SAID DECISION REFERS TO THE EARLIER DECISION OF THE SUPREME COURT IN THE CA SE OF ALLIED MOTORS (P) LIMITED (SUPRA) AND COMMISSIONER OF INCOME TAX VERS US ALOM EXTRUSIONS LIMITED, (2009) 319 ITR 306 (SC). IN THE CASE OF AL LIED MOTORS (P) LIMITED (SUPRA), THE SUPREME COURT WAS EXAMINING THE FIRST PROVISO TO SECTION 43B AND WHETHER IT WAS RETROSPECTIVE. SECTION 43B WAS I NSERTED IN THE ACT WITH EFFECT FROM 1ST APRIL 1984 FOR CURBING CLAIMS OF TA XPAYERS WHO DID NOT DISCHARGE OR PAY STATUTORY LIABILITIES BUT CLAIMED DEDUCTIONS ON THE GROUND THAT THE STATUTORY LIABILITY HAD ACCRUED. SECTION 4 3B STATES THAT THE STATUTORY LIABILITY WOULD BE ALLOWED AS A DEDUCTION OR AS AN EXPENSE IN THE YEAR IN WHICH THE PAYMENT WAS MADE AND WOULD NOT BE ALLOWED , EVEN IN CASES OF MERCANTILE SYSTEM OF ACCOUNTANCY, IN THE YEAR OF AC CRUAL. IT WAS NOTICED THAT IN SOME CASES HARDSHIP WOULD BE CAUSED TO ASSESSEES , WHO PAID THE STATUTORY DUES WITHIN THE PRESCRIBED PERIOD THOUGH THE PAYMENTS SO MADE WOULD NOT FALL WITHIN THE RELEVANT PREVIOUS YEAR. A CCORDINGLY, A PROVISO WAS ADDED BY FINANCE ACT, 1987 APPLICABLE WITH EFFECT F ROM 1ST APRIL, 1988. THE PROVISO STIPULATED THAT WHEN STATUTORY DUES COVERED BY SECTION 43B WERE PAID ON OR BEFORE THE DUE DATE FOR FURNISHING OF TH E RETURN UNDER SECTION 139(1), THE DEDUCTION/EXPENSE, EQUAL TO THE AMOUNT PAID WOULD BE ALLOWED. THE SUPREME COURT NOTICED THE PURPOSE BEHIND THE PR OVISO AND THE REMEDIAL NATURE OF THE INSERTION MADE. OF COURSE, THE SUPREM E COURT ALSO REFERRED TO EXPLANATION 2 WHICH WAS INSERTED BY FINANCE ACT, 19 89 WHICH WAS MADE RETROSPECTIVE AND WAS TO TAKE EFFECT FROM 1 ST APRIL, 1984. HIGHLIGHTING THE OBJECT BEHIND SECTION 43B, IT WAS OBSERVED THAT THE PROVISO MAKES THE PROVISION WORKABLE, GIVES IT A REASONABLE INTERPRET ATION. IT WAS ELUCIDATED: 12. IN THE CASE OF GOODYEAR INDIA LTD. V. STATE OF HARYANA THIS COURT SAID THAT THE RULE OF REASONABLE CONSTRUCTION MUST BE AP PLIED WHILE CONSTRUING A STATUTE. LITERAL CONSTRUCTION SHOULD BE AVOIDED IF IT DEFEATS THE MANIFEST OBJECT AND PURPOSE OF THE ACT. 13. THEREFORE, IN THE WELL-KNOWN WORDS OF JUDGE LEA RNED HAND, ONE CANNOT MAKE A FORTRESS OUT OF THE DICTIONARY; AND SHOULD R EMEMBER THAT STATUTES HAVE SOME PURPOSE AND OBJECT TO ACCOMPLISH WHOSE SY MPATHETIC AND IMAGINATIVE DISCOVERY IS THE SUREST GUIDE TO THEIR MEANING. IN THE CASE OF R.B. JUDHA MAI KUTHIALA V. CIT, THIS COURT SAID THA T ONE SHOULD APPLY THE RULE OF REASONABLE INTERPRETATION. A PROVISO WHICH IS INSERTED TO REMEDY UNINTENDED CONSEQUENCES AND TO MAKE THE PROVISION W ORKABLE, A PROVISO WHICH SUPPLIES AN OBVIOUS OMISSION IN THE SECTION A ND IS REQUIRED TO BE READ ITA NOS.714 & 715 (ASR)/2013 ASST. YEAR: 2005-06 & 2006-07 ITA NOS.268 & 346 (ASR)/2012 ASST. YEAR 20 07-08 & 2008-09 9 INTO THE SECTION TO GIVE THE SECTION A REASONABLE I NTERPRETATION, REQUIRES TO BE TREATED AS RETROSPECTIVE IN OPERATION SO THAT A REA SONABLE INTERPRETATION CAN BE GIVEN TO THE SECTION AS A WHOLE. 14. THIS VIEW HAS BEEN ACCEPTED BY A NUMBER OF HIGH COURTS. IN THE CASE OF CIT V. CHANDULAL VENICHAND, THE GUJARAT HIGH COURT HAS HELD THAT THE FIRST PROVISO TO SECTION 43-B IS RETROSPECTIVE AND SALES TAX FOR THE LAST QUARTER PAID BEFORE THE FILING OF THE RETURN FOR THE ASSESS MENT YEAR IS DEDUCTIBLE. THIS DECISION DEALS WITH ASSESSMENT YEAR 1985-85. T HE CALCUTTA HIGH COURT IN THE CASE OF CIT V. SRI JAGANNATH STEEL CORPN. HA S TAKEN A SIMILAR VIEW HOLDING THAT THE STATUTORY LIABILITY FOR SALES TAX ACTUALLY DISCHARGED AFTER THE EXPIRY OF THE ACCOUNTING YEAR IN COMPLIANCE WITH TH E RELEVANT STATUTE IS ENTITLED TO DEDUCTION UNDER SECTION 43-B. THE HIGH COURT HAS HELD THE AMENDMENT TO BE CLARIFICATORY AND, THEREFORE, RETRO SPECTIVE. THE GUJARAT HIGH COURT IN THE ABOVE CASE HELD THE AMENDMENT TO BE CURATIVE AND EXPLANATORY AND HENCE RETROSPECTIVE. THE PATNA HIGH COURT HAS ALSO HELD THE AMENDMENT INSERTING THE FIRST PROVISO TO BE EXPLANA TORY IN THE CASE OF JAMSHEDPUR MOTOR ACCESSORIES STORES V. UNION OF IND IA. THE SPECIAL LEAVE PETITION FROM THIS DECISION OF THE PATNA HIGH COURT WAS DISMISSED. THE VIEW OF THE DELHI HIGH COURT, THEREFORE, THAT THE FIRST PROVISO TO 23. SECTION 43-B WILL BE AVAILABLE ONLY PROSPECTIVELY DOES NOT APPEA R TO BE CORRECT. AS OBSERVED BY G.P. SINGH IN HIS PRINCIPLES OF STATUTO RY INTERPRETATION, 4TH EDN. AT P. 201: IT IS WELL SETTLED THAT IF A STATUTE IS CURATIVE OR MERELY DECLARATORY OF THE PREVIOUS LAW RETROSPECTIVE OPERATION IS GENE RALLY INTENDED. IN FACT THE AMENDMENT WOULD NOT SERVE ITS OBJECT IN SUCH A SITU ATION UNLESS IT IS CONSTRUED AS RETROSPECTIVE. THE VIEW, THEREFORE, TA KEN BY THE DELHI HIGH COURT CANNOT BE SUSTAINED. 23. SECTION 43B DEALS WITH STATUTORY DUES AND STIPU LATES THAT THE YEAR IN WHICH THE PAYMENT IS MADE THE SAME WOULD BE ALLOWED AS A DEDUCTION EVEN IF THE ASSESSEE IS FOLLOWING THE MERCANTILE SYSTEM OF ACCOUNTANCY. THE PROVISO, HOWEVER, STIPULATES THAT DEDUCTION WOULD B E ALLOWED WHERE THE STATUTORY DUES COVERED BY SECTION 43B STAND PAID ON OR BEFORE THE DUE DATE OF FILING OF RETURN OF INCOME. SECTION 40(A)(IA) IS APPLICABLE TO CASES WHERE AN ASSESSEE IS REQUIRED TO DEDUCT TAX AT SOURCE AND FA ILS TO DEDUCT OR DOES NOT MAKE PAYMENT OF THE TDS BEFORE THE DUE DATE, IN SUC H CASES, NOTWITHSTANDING SECTIONS 30 TO 38 OF THE ACT, DEDUC TION IS TO BE ALLOWED AS AN EXPENDITURE IN THE YEAR OF PAYMENT UNLESS A CASE IS COVERED UNDER THE EXCEPTIONS CARVED OUT. THE AMENDED PROVISO AS INSER TED BY FINANCE ACT, 2010 STATES WHERE AN ASSESSEE HAS MADE PAYMENT OF T HE TDS ON OR BEFORE THE DUE DATE OF FILING OF THE RETURN UNDER SECTION 139(1), THE SUM SHALL BE ALLOWED AS AN EXPENSE IN COMPUTING THE INCOME OF TH E PREVIOUS YEAR. THE TWO PROVISIONS ARE AKIN AND THE PROVISOS TO SECTION S 40(A)(IA) AND 43B ARE TO THE SAME EFFECT AND FOR THE SAME PURPOSE. 24. IN PODAR CEMENT PRIVATE LIMITED (SUPRA), THE SU PREME COURT CONSIDERED WHETHER TERM OWNER 1 WOULD INCLUDE UNREGISTERED OWNERS WHO HAD PAID SAL E ITA NOS.714 & 715 (ASR)/2013 ASST. YEAR: 2005-06 & 2006-07 ITA NOS.268 & 346 (ASR)/2012 ASST. YEAR 20 07-08 & 2008-09 10 CONSIDERATION AND WERE COVERED BY SECTION 53A OF TH E TRANSFER OF PROPERTY ACT. THE CONTENTION OF THE ASSESSEES WAS THAT THE A MENDMENTS MADE TO THE DEFINITION OF TERM OWNER BY FINANCE BILL, 1987 SH OULD BE GIVEN RETROSPECTIVE EFFECT. IT WAS HELD THAT THE AMENDMENTS WERE RETROS PECTIVE IN NATURE AS THEY RATIONALISE AND CLEAR THE EXISTING AMBIGUITIES AND DOUBTS. REFERENCE WAS MADE TO CRAWFORD: STATUTORY CONSTRUCTION AND THE PRINCIPLE OF DECLARATORY STATUTES, FRANCIS BENNION: STATUTORY INTERPRETATI ON, JUSTICE G.P. SINGHS PRINCIPLES OF STATUTORY INTERPRETATION, IT WAS OB SERVED THAT SOMETIMES AMENDMENTS ARE MADE TO SUPPLY AN OBVIOUS OMISSION O R TO CLEAR UP DOUBTS AS TO THE MEANING OF THE PREVIOUS PROVISION. THE IS SUE WAS ACCORDINGLY DECIDED HOLDING THAT IN SUCH CASES THE AMENDMENTS W ERE RETROSPECTIVE THOUGH IT WAS NOTICED THAT AS PER TRANSFER OF PROPE RTY ACT, REGISTRATION ACT, ETC. A LEGAL OWNER MUST HAVE A REGISTERED DOCUMENT. 25. IN VIEW OF THE AFORESAID DISCUSSION IN PARAS 18 ,19 AND 20, IT IS APPARENT THAT THE RESPONDENT ASSESSE DID NOT VIOLATE THE UNA MENDED SECTION 40(A)(IA) OF THE ACT. WE HAVE NOTED THE AMBIGUITY AND REFERRE D THEIR CONTENTION OF REVENUE AND REJECTED THE INTERPRETATION PLACED BY T HEM. THE AMENDED PROVISIONS ARE CLEAR AND FREE FROM ANY AMBIGUITY AN D DOUBT. THEY WILL HELP CURTAIL LITIGATION. THE AMENDED PROVISION CLEARLY S UPPORT VIEW TAKEN IN PARAGRAPHS 17-20 THAT THE EXPRESSION SAID DUE DATE USED IN CLAUSE A OF PROVISO TO UNAMENDED SECTION REFERS TO TIME SPECIFI ED IN SECTION 139(1) OF THE ACT. THE AMENDED SECTION 40(A)(IA) EXPANDS AND FURT HER LIBERALISES THE STATUE WHEN IT STIPULATES THAT DEDUCTIONS MADE IN T HE FIRST ELEVEN MONTHS OF THE PREVIOUS YEAR BUT PAID BEFORE THE DUE DATE OF F ILING OF THE RETURN, WILL CONSTITUTE SUFFICIENT COMPLIANCE. THE A/R OF THE ASSESSEE APPELLANT HAS ALSO RELIED U PON THE JUDGMENT OF THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF COMMISSI ONER OF INCOME TAX, COL- XI, KOL VS. VIRGIN CREATIONS IN ITAT NO. 302 O F 2011 GA 3200/2011. THE JUDGMENT OF HONBLE COURT IS RE-PRODUCED HERE A S UNDER:- THE COURT: WE HAVE HEARD MR. NIZAMUDDIN AND GONE T HROUGH THE IMPUGNED JUDGMENT 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 WHETHE R 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 T HE 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 UNDE R CONSIDERATION. THIS FACTUAL POSITION WAS UNDISPUTED. MOREOVER, THE SUPREME COUR T, AS HAS BEEN RECORDED BY THE LEARNED TRIBUNAL, IN THE CASE OF AL LIED MOTORS PVT. LTD. AND ALSO IN THE CASE OF ALOM EXTRUSIONS LTD., HAS ALREA DY DECIDED THAT THE AFORESAID PROVISION HAS RETROSPECTIVE APPLICATION. AGAIN, IN THE CASE REPORTED IN 82 ITR 570, THE SUPREME COURT HELD THAT THE PROV ISION, WHICH HAS INSERTED THE REMEDY TO MAKE THE PROVISION WORKABLE, REQUIRES TO BE TREATED ITA NOS.714 & 715 (ASR)/2013 ASST. YEAR: 2005-06 & 2006-07 ITA NOS.268 & 346 (ASR)/2012 ASST. YEAR 20 07-08 & 2008-09 11 WITH RETROSPECTIVE OPERATION SO THAT REASONABLE DED UCTION CAN BE GIVEN TO THE SECTION AS WELL. IN VIEW OF THE AUTHORITATIVE PRONO UNCEMENT OF THE SUPREME COURT, THIS COURT CANNOT DECIDE OTHERWISE. HENCE WE DISMISS THE APPEAL WITHOUT ANY ORDER AS TO COSTS. 9KALYAN JYOTI SENGUPTA, J.) (JOYMALYA BAGCHI,J.) FINANCE ACT, 2012 IS OF THE SIMILAR NATURE AS AMEND MENT MADE BY THE FINANCE ACT, 2010 IN SECTION 40(A)(IA) OF THE ACT A S BOTH THE AMENDMENTS HAS BEEN MADE TO MAKE THE PROVISIONS WORKABLE. THE A/R OF THE ASSESSEE APPELLANT ALSO BROUGHT TO MY NOTICE THE FINDINGS OF THE HONBLE ITAT, DELHI IN THE CASE OF HERO MOTOCORP. LTD. VS. ADDL. CIT (2013 ) 156 TTJ )DEL) 139 FOR THE ASSESSMENT YEAR 2007-08. THE HONBLE ITAT, DELH I HAS OBSERVED IN PARA 30.16 AS UNDER:- 30.16 NEVERTHELESS THE ASSESSEE HAS RAISED AN ALTE RNATE CONTENTION THAT M/S HERO HONDA FINLEASE LTD. HAS PAID ALL THE TAXES AND FILED ITS RETURN OF INCOME AND THUS IT IS NOT ASSESSEE IN DEFAULT IN TE RMS OF PROVISO TO S. 201 INSERTED BY THE FINANCE ACT, 2012 W.E.F. 1 ST JULY, 2012 AND CONSEQUENTLY DISALLOWANCE UNDER S. 40(A)(IA) IS NOT WARRANTED IN AS MUCH AS CORRESPONDING AMENDMENT WAS MADE TO THIS SECTION AS WELL. THIS PLEA DESERVES TO BE CONSIDERED. SINCE THIS ISSUE IS NOT EXAMINED BY THE LOWER AUTHORITIES WE SET ASIDE THE MATTER TO THE FILE OF AO FOR FRESH ADJUDICATION. THIS GROUND OF THE ASSESSEE IS ALLOWED IN PART FOR STATISTICAL PURPOSES. FURTHER THE A/R OF THE ASSESSEE APPELLANT HAS ALSO RELIED UPON THE JUDGMENT OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. GODAVARIDEVI SARAF (1978) 113 ITR 589 (BOM). THE HONBLE BOMBAY HIGH C OURT HAS OBSERVED THAT AN AUTHORITY LIKE AN INCOME TAX APPELLATE TRIB UNAL, ACTING ANYWHERE IN THE COUNTRY, HAS TO RESPECT THE LAW LAID DOWN BY TH E HIGH COURT, THOUGH OF A DIFFERENT STATE, SO LONG AS THERE IS NO CONTRARY DE CISION OF ANY OTHER HIGH COURT ON THAT QUESTION. THE SIMILAR VIEW HAS BEEN TAKEN BY THE HONBLE INCO ME TAX APPELLATE TRIBUNAL, PANAJI BENCH IN THE CASE OF INCOME TAX OF FICER VS DILIP SHIRODKAR (2005) 274 ITR 6 (A.T.). THE HONBLE ITAT, PANAJI B ENCH HAS OBSERVED AS UNDER:- ONCE AN AUTHORITY HIGHER THAN THE TRIBUNAL HAS EXP RESSED AN OPINION ON AN ISSUE, THE TRIBUNAL HAS TO RESPECTFULLY FOLLOW THE SAME EVEN THOUGH THAT DECISION MAY BE OF A NON-JURISDICTIONAL HIGH COURT. CIT VS. GODAVARIDEVI SARAF (1978) 113 ITR 589 (BOM) FOLLOWED. SO KEEPING IN VIEW THE VARIOUS JUDGMENTS REFERRED A BOVE ESPECIALLY THE JUDGMENT OF HONBLE DELHI HIGH COURT I HOLD THAT TH E AMENDMENT MADE IN SECTION 40(A)(IA) OF THE INCOME TAX ACT VIDE FINANC E ACT, 2012 SHOULD BE READ AS RETROSPECTIVE, HENCE, APPLICABLE TO THE ASSESSME NT YEAR 2005-06 THE YEAR ITA NOS.714 & 715 (ASR)/2013 ASST. YEAR: 2005-06 & 2006-07 ITA NOS.268 & 346 (ASR)/2012 ASST. YEAR 20 07-08 & 2008-09 12 UNDER APPEAL. AS PER CERTIFIED COPY OF AUDIT REPORT , COPY OF RETURN FILED, DETAILS OF GINNING & PRESSING ACCOUNT I FIND THAT T HE PAYEE M/S LAKSHMI COTTON MILLS HAS FILED HIS INCOME TAX RETURN FOR TH E ASSESSMENT YEAR 2005-06 ON 26-10-2005 AND SHOWN THE GINNING AND PRESSING CH ARGES IN HIS RETURN OF INCOME. AS SUCH, PROVISIONS OF SECTION 40(A)(IA) AR E NOT APPLICABLE ON ACCOUNT OF PAYMENT OF GINNING & PRESSING CHARGES AMOUNTING TO RS.58,33,300/- MADE TO M/S LAKSHMI COTTON MILLS, RAMPURA PHUL. THE REFORE, ADDITION MADE AMOUNTING TO RS. 58,33,300/- IS DELETED FOR NON DED UCTION OF TDS. HOWEVER, THE ASSESSEE APPELLANT HAS NOT BROUGHT ON RECORD AN Y SUCH EVIDENCE THAT THE \ABOUR CONTRACTORS HAD FILED THEIR INCOME TAX R ETURN FOR THE ASSESSMENT YEAR 2006-07 AND SHO\NR\ THESE PAYMENTS IN THE RETU RN FILED, HENCE, THE ADDITION MADE ON ACCOUNT OF NON DEDUCTION OF TAX ON PAYMENT AMOUNTING TO RS. 10,00,400/- PAID TO THE CONTRACTORS IS CONFIRME D. AS SUCH, THIS GROUND OF APPEAL IS PARTLY ALLOWED WITH A RELIEF OF RS. 58,33 ,300/-. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED. 8. AGGRIEVED WITH THE DELETIONS THE REVENUE IS IN A PPEAL BEFORE US. 9. THE LEARNED DR, AT THE OUTSET, HEAVILY PLACED HI S RELIANCE ON THE ORDERS OF ASSESSING OFFICER AND SUBMITTED THAT SINC E ASSESSEE HAD NOT DEDUCTED TDS, THEREFORE, ASSESSING OFFICER HAD RIGH TLY MADE ADDITION AND LEARNED CIT(A) HAD DELETED THE ADDITION HOLDING THA T THE AMENDMENT TO SEC.40(A)(IA) MADE BY FINANCE ACT. 2012 SHOULD BE R EAD AS RETROSPECTIVE WHEREAS THE AMENDMENT MADE BY THE FINANCE ACT.2012 IS EFFECTIVE ONLY FROM 1.7.2012. 10. THE LEARNED AR, ON THE OTHER HAND PLACED HIS RE LIANCE ON THE ORDERS OF LEARNED CIT(A) AND SUBMITTED THAT THE SAID AMEND MENT WAS MADE W.E.F., 1.7.2012 BUT THE AMENDMENT IS APPLICABLE RETROSPECT IVELY. THE LEARNED AR PLACED HIS RELIANCE ON THE CASE LAWS RELIED UPON BE FORE LEARNED CIT(A) AND ALSO PLACED HIS RELIANCE ON THE CASE LAW OF M/S ASH A BUILDERS LTD. VS. JCIT, (TDS), IN ITA NOS.51,52,53(ASR)/2016 ORDER DA TED 4.05.2016. THE LEARNED AR FURTHER RELIED UPON A NUMBER OF CASE LAW S AS LISTED IN THE (PB ITA NOS.714 & 715 (ASR)/2013 ASST. YEAR: 2005-06 & 2006-07 ITA NOS.268 & 346 (ASR)/2012 ASST. YEAR 20 07-08 & 2008-09 13 PAGES 12 TO 150). BESIDES THE ABOVE CASE LAWS THE L EARNED AR RELIED UPON THE CASE LAW OF CIT VS. ALMO EXTRUSIONS LTD. 319 IT R 306 (SC), FOR THE PROPOSITION THAT PROVISIONS AMENDED TO REMOVE INTEN DED HARDSHIPS ARE TO BE TREATED AS APPLICABLE RETROSPECTIVELY. THE LEAR NED AR FURTHER SUBMITTED THAT LEARNED CIT(A) HAS FINALLY GIVEN THE RELIEF ON ACCOUNT OF THE FACT THAT HE HAD VERIFIED THAT PAYMENTS MADE BY ASSESSEE TO M /S LAXMI COTTON MILLS WERE REFLECTED BY THE PAYEE IN ITS INCOME TAX RETURNS. 11. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE THROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT ONLY CONTROVERSY INV OLVED IN THESE APPEALS IS THE DELETION OF DISALLOWANCE BY LEARNED CIT(A) W HICH THE ASSESSING OFFICER HAD MADE ON ACCOUNT OF NON DEDUCTION OF TDS U/S 40(A)(IA) OF THE ACT. THE LEARNED CIT(A) HAS MADE A FINDING OF FACT THAT M/S LAXMI COTTON MILLS THE PAYEE HAD FILED ITS RETURN OF INCOME FOR ASST. YEAR:2005-06 ON 26.10.2005 AND FOR ASST. YEAR 2006-07 ON 9.10.2006 AND HAS FURTHER MADE A FINDING OF FACT THAT M/S LAXMI COTTON MILLS HAD DECLARED THE INCOME RECEIVED FROM ASSESSEE IN ITS P&L ACCOUNT AN D THEREFORE, AS PER THE HONBLE SUPREME COURT JUDGMENT IN THE CASE OF HINDU STAN COCA COLA BEVERAGE (PVT.) LTD. VS. CIT, REPORTED IN (2007) 29 3 ITR 226 THE LIABILITY CANNOT BE FASTENED ON ASSESSEE TO AGAIN PAY TAX ON THE SAME INCOME. THE FINDINGS OF HONBLE SUPREME COURT ARE REPRODUCED BE LOW. IT IS REQUIRED TO NOTE THAT THE DEPARTMENT CONCED ED BEFORE THE TRIBUNAL THAT THE RECOVERY COULD NOT ONCE AGAIN BE MADE FROM THE TAX DEDUCTOR WHERE THE PAYEE INCLUDED THE INCOME ON WHICH TAX WAS ALLEGED TO HAVE BEEN SHORT DEDUCTED IN ITS TAXABLE INCOME AND PAID TAXES THERE ON. THERE IS NO DISPUTE ITA NOS.714 & 715 (ASR)/2013 ASST. YEAR: 2005-06 & 2006-07 ITA NOS.268 & 346 (ASR)/2012 ASST. YEAR 20 07-08 & 2008-09 14 WHATSOEVER THAT P CORPN. HAD ALREADY PAID THE TAXES DUE ON ITS INCOME RECEIVED FROM THE APPELLANT AND HAD RECEIVED REFUND FROM THE TAX DEPARTMENT. THE TRIBUNAL CAME TO THE RIGHT CONCLUSI ON THAT THE TAX ONCE AGAIN COULD NOT BE RECOVERED FROM THE APPELLANT (DE DUCTOR-ASSESSEE) SINCE THE TAX HAS ALREADY BEEN PAID BY THE RECIPIENT OF I NCOME. THE ORDER PASSED BY THE TRIBUNAL TO REOPEN THE MATTER FOR FURTHER HE ARING AS REGARDS GROUND NO. 7 HAS ATTAINED ITS FINALITY. IN THE CIRCUMSTANC ES, THE HIGH COURT COULD NOT HAVE INTERFERED WITH THE FINAL ORDER PASSED BY THE TRIBUNAL. BE THAT AS IT MAY, THE CIRCULAR NO. 275/201/95-IT(B), DT. 29TH JA N., 1997 ISSUED BY THE CBDT SHOULD PUT AN END TO THE CONTROVERSY. IN THE C IRCUMSTANCES, IT IS NOT NECESSARY TO GO IN DETAIL AS TO WHETHER THE TRIBUNA L COULD HAVE AT ALL REOPENED THE APPEAL TO RECTIFY THE ERROR APPARENT O N THE FACE OF THE RECORD. CIT VS. HINDUSTAN COCA COLA BEVERAGES (P) LTD. (2007) 207 CTR (DEL) 119 SET ASIDE. WE FIND THAT IT IS AN UNDISPUTED FACT THAT IN THE P RESENT CASE THE PAYEES HAD FILED ITS INCOME TAX RETURN DECLARING THE INCOM E RECEIVED FROM ASSESSEE IN ITS RETURN OF INCOME. IN FACT IT HAS BE EN NOTED BY LEARNED CIT(A) IN HIS ORDER THAT AND THE LEARNED DR WAS N OT ABLE TO CONTROVERT THESE FINDINGS OF LEARNED CIT(A), THEREFORE, THE DI SALLOWANCE MADE FOR THIS EXPENDITURE IN THE HANDS OF ASSESSEE WILL AMOUNT TO DOUBLE TAXATION OF THE SAME INCOME THAT IS ONE IN THE HANDS OF ASSESSEE AN D ONE IN THE HANDS OF PAYEE WHICH IS NOT PERMISSIBLE AS PER LAW. WE FURT HER FIND THAT IN THE CASE OF CIT VS. ANSAL LAND MARK TOWNSHIP (P) LTD., 377 ITR 635, IT HAS BEEN HELD THAT AMENDMENT IN SECOND PROVISO TO SECTION 40 (A)(IA) OF THE ACT IS DECLARATORY & CURATIVE AND HAS RETROSPECTIVE EFFECT FROM 01.04.2005. ACCORDINGLY, WHERE THE ASSESSEE FILED CONFIRMATION FROM THE PAYEES TO THE EFFECT THAT THEY HAVE PAID THE TAXES ON THE AMOUNTS RECEIVED FROM THE ASSESSEE, NO DISALLOWANCE U/S 40(A)(IA) OF THE ACT, IS CALLED FOR. 12. IN VIEW OF THE ABOVE, THE APPEALS FILED BY REV ENUE ARE DISMISSED. ITA NOS.714 & 715 (ASR)/2013 ASST. YEAR: 2005-06 & 2006-07 ITA NOS.268 & 346 (ASR)/2012 ASST. YEAR 20 07-08 & 2008-09 15 13. THE CROSS OBJECTIONS FILED BY ASSESSEE WERE NOT PRESSED, THEREFORE, THE SAME ARE DISMISSED AS NOT PRESSED. 14. NOW WE TAKE UP THE APPEALS IN ITA NO. 268(ASR)/ 2010 & 346(ASR)/2012. WE FIND THAT IN ITA NO.268, THE ASSE SSEE IS AGGRIEVED WITH THE ACTION OF LEARNED CIT(A) BY WHICH HE HAD CONFIR MED THE ADDITION MADE BY ASSESSING OFFICER U/S 40(A)(IA) OF THE ACT ON AC COUNT OF PAYMENTS MADE TO LABOUR CONTRACTOR WITHOUT DEDUCTION OF TDS AND F URTHER ON ACCOUNT COST OF HASSIAN PATTI & CLOTH, WHICH THE ASSESSEE HAS CLAIMED THAT THESE WERE NOT EXPENSES BUT WERE PURCHASES AND THEREFORE, WERE NOT LIABLE TO TDS. 15. IN ITA NO. 346(ASR)/2012 BESIDES THE ABOVE GRIE VANCES THE ASSESSEE IS ALSO AGGRIEVED WITH THE ACTION OF LEARNED CIT(A) , BY WHICH HE HAD CONFIRMED THE ACTION OF ASSESSING OFFICER FOR MAKIN G DISALLOWANCE ON ACCOUNT OF PAYMENTS MADE TO M/S LAXMI COTTON MILLS AS PROCESSING AND GINNING CHARGES. THE LEARNED AR ARGUED THAT THE PAY EES HAD PAID TAXES ON THE INCOME RECEIVED FROM ASSESSEE, THEREFORE, DISAL LOWANCE U/S 40(A)(IA) OF THE ACT WAS NOT WARRANTED. THE LEARNED AR ADVANCED HIS ARGUMENTS AS ADVANCED IN THE APPEALS FILED BY REVENUE. [ 16. THE LEARNED DR, ON THE OTHER HAND, HEAVILY PLAC ES HIS RELIANCE ON THE ORDERS OF AUTHORITIES BELOW. ITA NOS.714 & 715 (ASR)/2013 ASST. YEAR: 2005-06 & 2006-07 ITA NOS.268 & 346 (ASR)/2012 ASST. YEAR 20 07-08 & 2008-09 16 17. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE T HROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT THE HONBLE DELHI IT AT IN THE CASE OF HERO MOTOCORP LTD. VS. ADDL. CIT (2013) 156 TTJ (DEL), H AS HELD AS UNDER: 30. 16 NEVERTHELESS THE ASSESSEE HAS RAISED AN ALT ERNATE CONTENTION THAT M/S HERO HONDA FINLEASE LTD. HAS PAID ALL THE TAXES AND FILED ITS RETURN OF INCOME AND THUS IT IS NOT ASSESSEE IN DEFAULT IN TE RMS OF PROVISO TO SEC.201 INSERTED BY THE FINANCE ACT, 2012 W.E.F 1 ST JULY, 2012 AND CONSEQUENTLY DISALLOWANCE SEC. 40(A)(IA) IS NOT WARRANTED IN AS MUCH AS CORRESPONDING AMENDMENT WAS MADE TO THIS SECTION AS WELL. THIS PL EA DESERVES TO BE CONSIDERED. SINCE THIS ISSUE IS NOT EXAMINED BY THE LOWER AUTHORITIES WE SET ASIDE THE MATTER TO THE FILE OF AO FOR FRESH ADJUDI CATION. THIS GROUND OF THE ASSESSEE IS ALLOWED IN PART FOR STATISTICAL PURPOSE S. WE FIND THAT AS REGARDS PAYMENTS MADE TO LABOUR CON TRACTOR, THE MATERIAL ON RECORD DOES NOT SHOW THAT THE SAID CONTRACTOR HA D DECLARED THE INCOME IN ITS P&L ACCOUNT. HOWEVER, IF THE PAYEE HAD INCLU DED THE SAME IN HIS P&L ACCOUNT AND HAS OFFERED THE SAME FOR TAXATION T HEN THE DISALLOWANCE U/S 40(A)(IA) IS NOT WARRANTED AS HELD IN A NUMBER OF CASE LAWS AS NOTED BY US IN THE REVENUES APPEALS. HOWEVER, SINCE THIS ISS UE HAS NOT BEEN EXAMINED, THEREFORE, WE DEEM IT APPROPRIATE TO SET ASIDE THE ISSUE TO THIS OFFICE OF ASSESSING OFFICER WHO AFTER VERIFICATION OF THE TAX RECORDS OF CONTRACTOR WILL ARRIVE AT THE CORRECT CONCLUSION. S IMILARLY, THE ISSUE OF HASSIAN PATTI & CLOTH HAS NOT BEEN EXAMINED BY THE AUTHORITIES BELOW AS TO WHETHER THE SAME ARE EXPENSES OR PURCHASES, THE REFORE, THIS ISSUE IS REMITTED BACK TO ASSESSING OFFICER FOR FRESH ADJUDI CATION. 18. AS REGARDS THE ISSUE OF PAYMENTS MADE TO M/S LA XMI COTTON MILLS, WE HAVE ALREADY HELD THAT IN REVENUES APPEALS THAT THE DISALLOWANCE WAS ITA NOS.714 & 715 (ASR)/2013 ASST. YEAR: 2005-06 & 2006-07 ITA NOS.268 & 346 (ASR)/2012 ASST. YEAR 20 07-08 & 2008-09 17 NOT WARRANTED IN VIEW OF THE FACT THAT M/S LAXMI CO TTON MILLS HAD DECLARED THE INCOME RECEIVED FROM ASSESSEE IN ITS P&L ACCOUN T, HOWEVER THIS FACT IS NOT COMING OUT FROM THE RECORD AS TO WHETHER ASSESS EE HAD FILED ANY CERTIFICATE BEFORE THE AUTHORITIES BELOW IN SUPPORT OF THE FACT THAT PAYEE HAD DECLARED THE INCOME RECEIVED FROM ASSESSEE IN I TS P&L ACCOUNT. THEREFORE, WE DEEM IT APPROPRIATE TO SEND THIS ISSU E ALSO TO THE OFFICE OF ASSESSING OFFICER FOR FRESH ADJUDICATION. 19. NEEDLESS TO SAY THAT ASSESSEE WILL BE PROVIDE D SUFFICIENT OPPORTUNITY OF BEING HEARD. 20. IN VIEW OF THE ABOVE, THE APPEALS FILED BY ASSE SSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 21. IN NUTSHELL, THE APPEALS FILED BY REVENUE AS WE LL AS CROSS OBJECTIONS OF ASSESSEE ARE DISMISSED WHEREAS THE APPEALS FILED BY ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 18.07. 20 16. SD/- SD/- (A.D. JAIN) (T. S. KAPOOR) JUDICIAL MEMBER A CCOUNTANT MEMBER DATED:18.07.2016. /PK/PS. COPY OF THE ORDER FORWARDED TO: (1) THE ASSESSEE: (2) THE (3) THE CIT(A), (4) THE CIT, (5) THE SR DR, I.T.A.T., TRUE COPY BY ORDER