M/s Pratibha Exims Pvt. Ltd., Indore V. The ACIT, Ratlam

CO 46/IND/2013

• Counselvise Citation: [2013] 122 COUNSELVISE.COM (IT) 8698 (ITAT-INDORE)
• Duration Of Justice: 2 month(s) 13 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 21-06-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 08-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S S DESH
• Assessee Lawyers: R A VERMA
• Keywords: Opportunity of being heard
• Section: 143(3); 201(1); 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL , INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, J.M. AND SHRI R.C.SHARM A, A.M. PAN NO. : AACCP2339L I.T.A.NO. 90 /IND/201 3 A.Y. : 2006-07 ACIT, RATLAM VS. M/S.PRATIBHA EXIMS PVT.LTD., 12,SHALIMAR TOWNSHIP, A. B. ROAD, DIST. INDORE. APPELLANT RESPONDENT C.O.NO. 46/IND/2013 (ARISING OUT OF I.T.A.NO.90/IND/2013) A.Y. : 2006-07 M/S.PRATIBHA EXIMS PVT.LTD., 12,SHALIMAR TOWNSHIP, A. B. ROAD, DIST. INDORE. VS. ACIT, RATLAM CROS S OBJECTOR RESPONDENT -: 2: - 2 I.T.A.NO.99/IND/2013 A.Y. : 2006-07 M/S.PRATIBHA EXIMS PVT.LTD., 12,SHALIMAR TOWNSHIP, A. B. ROAD, DIST. INDORE. VS. ACIT, RATLAM CROSS OBJECTOR RESPONDENT DEPARTMENT BY : SHRI R.A.VERMA, SR. D R RESPONDENT BY : SHRI S. S. DESHPANDE AND SHRI G.B. AGARWAL DATE OF HEARING : 19 . 0 6 .201 3 DATE OF PRONOUNCEMENT : 21 . 0 6 .201 3 O R D E R PER R. C. SHARMA, A.M. THESE ARE CROSS APPEAL FILED BY THE ASSESSEE AND RE VENUE AS WELL AS CROSS OBJECTION FILED BY THE ASSESSEE AG AINST THE ORDER OF CIT(A) DATED 20.11.2012 FOR THE ASSESSMENT YEAR 2006-07. 2. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORDS PERUSED. FACTS IN BRIEF ARE THAT THE ASSESSEE IS A COMPANY CARRYING ON BUSINESS OF TRADING OF SOYABEAN AND OIL . DURING -: 3: - 3 THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAS CLAI MED DEDUCTION FOR JOB CHARGES OF RS. 1,04,80,591/- PAID TO M/S. KARTIK SOLVEX PRIVATE LIMITED FOR PROCESSING OF SOY ABEAN SEEDS. THE ASSESSEE HAS ALSO PAID CLEARING, FORWARDING AND TRANSPORTATION CHARGES AT RS. 11,22,460/- TO M/S. S WASTIK ENTERPRISES. IN THE ASSESSMENT FRAMED U/S 143(3) ON 30.12.2008, THE ASSESSING OFFICER HAS DISALLOWED JO B CHARGES AMOUNTING TO RS. 1,04,80,591/- AND FORWARDING & TRANSPORTATION CHARGES OF RS. 11,22,430/- U/S 40(A) (IA) OF THE INCOME-TAX ACT, 1961, AGAINST THIS ORDER OF ASSESSI NG OFFICER DATED 30.12.2008, THE ASSESSEE FILED APPEAL BEFORE THE CIT(A). IT WAS DISMISSED FOR NON APPEARANCE OF ASSESSEE BEF ORE THE CIT(A) VIDE ORDER DATED 30.10.09. AGAINST THIS ORDE R OF CIT(A), THE ASSESSEE PREFERRED APPEAL BEFORE THE I.T.A.T., AND VIDE ORDER DATED 26.3.2010, THE MATTER WAS RESTORED TO T HE FILE OF ASSESSING OFFICER BY THE TRIBUNAL FOR DECISION THER EON AS PER LAW AFTER GIVING DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. IN THE FRESH ASSESSMENT ORDER FRAMED U/S 143(3) READ WITH SECTION 254 DATED 29.12.2011, THE ASSESSI NG OFFICER HAS AGAIN UPHELD THE DISALLOWANCE SO MADE. BY THE I MPUGNED -: 4: - 4 ORDER, THE LD. CIT(A) DELETED THE DISALLOWANCE PART LY BY FOLLOWING THE DECISION OF THE I.T.A.T. SPECIAL BENC H IN THE CASE OF MERILYN SHIPPING & TRANSPORT, 146 TTJ 1, VISHAKH APATTNAM BENCH. THE PRECISE OBSERVATION OF THE CIT(A) WAS AS UNDER :- 4.1.5 IT IS HELD BY THE HON'BLE SPECIAL BENCH, VISHAKHAPATTNAM THAT THE LEGISLATURE INTENT IS CLEAR FROM THE PLAIN RE ADING OF THE PROVISION LEGISLATURE INTENTIONALLY CHANGE D THE WORDS CREDITED OR PAID TO PAYABLE BY WAY OF ENACTED PROVISION WHEREBY ONLY THOSE OUTSTANDING AMOUNTS OR THE PROVISIONS FOR EXPENSES LIABLE FOR T DS UNDER CHAPTER XVII-B ARE SOUGHT TO BE DISALLOWED IN THE EVENT THERE IS A DEFAULT IN FOLLOWING THE OBLIGATIONS CASTED UPON THE ASSESSEE UNDER CHAPTER XVII-B AS PER CARDINAL PRINCIPLE OF INTERPRETATIO N (LITERAL INTERPRETATION ) THE PROVISIONS OF S. 40(A )(IA) ARE APPLICABLE ONLY TO THE AMOUNTS OF EXPENDITURE WHICH ARE PAYABLE ON 31 ST MARCH OF EVERY YEAR AND IT CANNOT B E INVOKED TO DISALLOW WHICH HAD BEEN ACTUALLY PAI D DURING THE PREVIOUS YEAR, WITHOUT DEDUCTION OF TDS. -: 5: - 5 4.1.6 HON'BLE I.T.A.T., INDORE BENCH IN THE CASE OF ACIT VS. GOPAL TRILOKCHANDRA AGRAWAL, (2012), 20 ITJ 486 HAS TAKEN A VIEW THAT BUSINESS DISALLOWANCE U/S. 40(A)(IA) OF HE INCOME-TAX ACT, 1961, - AMOUNT PAID TO CONTRACTOR ASSESSING OFFICER HELD THAT TDS WAS NOT DEDUCTED, AND THUS, EXPENDITURE WAS LIABLE TO BE DISALLOWED HELD AS PER MERILYN SHIPPING AND TRANSPORTS VS. ADDL. CIT, (2012), 146 TTJ 1 (VISAKHA)( S.B.) ( TRI B), SECTION 40(A)(IA) USES THE WORD PAYABLE, AND THE PROVISIONS OF TDS DISTINGUISH BETWEEN PAID AND PAYABLE EXPENDITURE CAN BE DISALLOWED U/S 40(A)(IA), ONLY IF THE AMOUNT IS PAYABLE I.E. OUTSTANDING AT THE YEAR END. 4.1.7 IN THE CASE OF THE APPELLANT AMOUNT OUTSTANDING AT THE YEAR END ON ACCOUNT OF JOB WORK CHARGES AS PER THE AUDITED ACCOUNT IS AT RS. 18,70,523/- AND PROFESSION AND TECHNICAL SERVICES A T RS. 2,73,015/-. AS PER THE FINDING OF THE JUDICIAL -: 6: - 6 AUTHORITIES EXPENDITURE U/S 40(A)(IA) OF INCOME-TAX ACT, WAS LIABLE TO BE DISALLOWED, IF THE AMOUNT IS PAYABLE I.E. OUTSTANDING AT THE YEAR END. CONSIDERI NG THE ABOVE FACTS ADDITION IS SUSTAINABLE ON ACCOUNT OF JOB WORK CHARGES AT RS. 18,70,723/- AND PROFESSIONAL AND TECHNICAL SERVICES AT RS. 2,73,015 /-. THE APPELLANT WILL GET RELIEF OF RS. 86,10,068/- ON ACCOUNT OF JOB WORK CHARGES AND RS. 8,49,445/- ON ACCOUNT OF PROFESSIONAL AND TECHNICAL SERVICES. 4.1.8 THE APPELLANT HAS FURTHER TAKEN A PLEA THAT PAYMENT MADE TO M/S. KARTIK SOLVEX PVT.LTD., O N ACCOUNT OF JOB WORK CHARGES IS NOT COVERED WITHIN T HE DEFINITION OF WORK CONTRACT. FURTHER, IT HAS TAKEN A PLEA THAT PAYMENT IS MADE TO SISTER CONCERN AND DOING SO, SHALL BE EQUIVALENT TO A SITUATION WHERE TAX IS PAID FOR TRANSFERRING THE MONEY FROM ONE POCKET OF A PERSON TO HIS ANOTHER POCKET AND THIS IS ONLY A C OST SHARING ARRANGEMENT. IN SUPPORT OF HIS CONTENTION I T HAS PLACED RELIANCE ON THE DECISIONS OF BOMBAY HIGH COURT. THE APPELLANT HAS NOT RAISED THESE ISSUES -: 7: - 7 BEFORE THE ASSESSING OFFICER AND NOT TAKEN THESE IN THEIR GROUNDS OF APPEAL, THEREFORE CONTENTION OF TH E APPELLANT COULD NOT BE ACCEPTED. THESE ARE THE FRES H ISSUES AND ARGUMENT OF THE APPELLANT ON THESE ISSUE S COULD NOT BE ADMITTED AT THIS STAGE. THESE GROUNDS OF THE APPEAL OF THE APPELLANT ARE PARTLY ALLOWED. 5. IN THE RESULT, APPEAL IS PARTLY ALLOWED. 3. AGAINST THIS ORDER OF CIT(A), BOTH ASSESSEE AND REVENUE ARE IN APPEAL BEFORE US. 4. SHRI R. A. VERMA, SR. DR, APPEARED ON BEHALF OF THE REVENUE AND CONTENDED THAT THE DECISION OF LD. CIT( A) IS BASED ON THE VERDICT OF HON'BLE I.T.A.T., SPECIAL BENCH, VISAKHAPATTNAM IN THE CASE OF MERILYN SHIPPING AND TRANSPORT VS. ADDL. CIT, (2012) 146 TTJ 1 (VISAKHA) (SB). THE HON'BLE HIGH COURT OF ANDHRA PRADESH IN THE APPEAL NO. I.T.T.A.M.P. NO.908 OF 2012 IN I.T.T.A.NO.384 OF 20 12 VIDE ORDER DATED 18.10.2012 IN THE CASE OF CIT-1 VISAKHA PATNAM VS. MERILYN SHIPPING AND TRANSPORT HAS SUSPENDED TH E -: 8: - 8 OPERATION OF THE ORDER OF I.T.A.T. IN THE CASE OF M ERILYN SHIPPING AND TRANSPORT VS. ADDL. CIT, (2012) 146 TT J 1 (VISAKHA) (S.B.). THUS, THE LD. CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE MADE BY THE ASSESSING OFFICER. 5. ON THE OTHER HAND, SHRI S. S. DESHPANDE, APPEARED O N BEHALF OF THE ASSESSEE AND FAIRLY CONCEDED THAT DEC ISION RENDERED IN THE CASE MERILYN SHIPPING (SUPRA) IS NO MORE A GOOD LAW. HE FURTHER CONTENDED THAT PROVISO 1 & 2 O F SECTION 40(A)(IA) HAVE BEEN ADDED BY THE FINANCE ACT, 2010 AND 2012, AND THE SAME ARE CURATIVE IN NATURE. HE FURTHER SUB MITTED THAT THE ASSESSEE HAS NOT BEEN TREATED AS ASSESSEE IN DEFAULT U/S 201(1) AND THE RECIPIENTS HAVE FILED THEIR RESP ECTIVE RETURNS AND NECESSARY FORMS NO. 26A HAVE BEEN FILED BEFORE THE CIT(A). THUS, THE PROVISO WOULD BE APPLICABLE A ND DISALLOWANCE COULD NOT BE MADE UNDER THIS SECTION. AS PER LD. AUTHORIZED REPRESENTATIVE, THE AMOUNT PAID BY ASSES SEE ON ACCOUNT OF PROCESSING CHARGES AND TRANSPORTATION CH ARGES HAVE BEEN INCLUDED BY PAYEE IN THEIR INCOME AND DUE TAXES HAD BEEN PAID BY THEM AND RESPECTIVE RETURNS OF INC OME HAVE BEEN FILED ACCORDINGLY. BY RELYING ON THE DECISION OF HON'BLE -: 9: - 9 SUPREME COURT IN THE CASE OF ALLIED MOTORS, 224 ITR 677, AND M/S. VINAY CEMENT, 213 CTR 268, AND M/S. ALAM EXTRA CTION LIMITED, 319 ITR 306, HE CONTENDED THAT AMENDMENT B ROUGHT IN SECTION 43B, AND U/S 40(A)(IA), THE FIRST PROVIS O, WERE CLARIFICATORY IN NATURE, THEREFORE, APPLICABLE RETR OSPECTIVELY. RELIANCE WAS ALSO PLACED ON THE DECISION OF HON'BLE KOLKATA HIGH COURT IN THE CASE OF VIRGIN CREATORS, WHEREIN IT WAS HELD THAT FIRST PROVISO TO SECTION 40(A)(IA) WOULD BE RE TROSPECTIVE. 6. IN VIEW OF THE ABOVE, IT WAS PLEADED THAT SINCE THE ASSESSEE HAS FILED FORM NO.26A BEFORE THE CIT(A) AN D HAD ALSO APPLIED TO ADMIT THESE FORMS UNDER RULE 29 FOR CONS IDERATION F HON'BLE BENCH, THE DISALLOWANCE SO MADE SHOULD BE D ELETED. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. S O FAR AS THE DISALLOWANCE HAS BEEN DELETED BY THE LD.CIT(A) BY R ELYING ON THE DECISION IN THE CASE OF MERILYN SHIPPING AND TR ANSPORT (SUPRA), WE ARE IN AGREEMENT WITH THE CONTENTION OF THE LD. SR. DR TO THE EFFECT THAT HON'BLE ANDHRA PRADESH HIGH C OURT VIDE ORDER DATED 18.10.2012 HAS SUSPENDED THE OPERATION OF THIS -: 10: - 10 ORDER OF SPECIAL BENCH, THE CIT(A) WAS NOT JUSTIFIE D IN DELETING THE ADDITION BY FOLLOWING THE SAME. 8. WITH REGARD TO THE PROVISIONS OF SECTION 40(A)(IA) AND 201(1) AMENDMENT WAS BROUGHT IN BY FINANCE ACT, 201 2, THE SAME ARE CLARIFICATORY IN NATURE IN SO FAR AS PROVI SO SO INSERTED ARE ONLY REMEDIES TO MAKE THE PROVISIONS WORKABLE. HON'BLE APEX COURT IN THE CASE OF ALLIED MOTORS PRIVATE LIM ITED (SUPRA) AND VINAY CEMENT (SUPRA) HAVE ALSO TREATED SIMILAR PROVISIONS AS CURATIVE IN NATURE, THEREFORE, APPLICABLE RETROS PECTIVELY. HON'BLE KOLKATA HIGH COURT ALSO IN THE CASE OF VIRG IN CREATORS HAVE TAKEN THE SAME VIEW. COORDINATE BENCH OF I.T.A .T., INDORE IN THE CASE OF ACIT VS. R.M. CHEMICALS, I.T.A.NO. 461/IND/2012, HAD ALSO TAKEN THE SAME VIEW. PROVISO 1 AND 2 TO SECTION 40(A)(IA) HAVE BEEN DULY AMENDED BY THE FINANCE ACT, 2010, AND 2012, WHICH READS AS UNDER :- ANY INTEREST, COMMISSION OR BROKERAGE, FEES FOR PROFESSIONAL SERVICES OR FEES FOR TECHNICAL SERVIC ES PAYABLE TO A RESIDENT, OR AMOUNTS PAYABLE TO A CONTRACTOR OR SUB CONTRACTOR, BEING RESIDENT, FOR CARRYING OUT ANY WORK (INCLUDING SUPPLY OF LABOUR F OR -: 11: - 11 CARRYING OUT ANY WORK), ON WHICH TAX IS DEDUCTIBLE AT SOURCE UNDER CHAPTER XVII-B AND SUCH TAX HAS NOT BEEN DEDUCTED OR, AFTER DEDUCTION, [HAS NOT BEEN PA ID ON OR BEFORE THE DUE DATE SPECIFIED IN THE SUB-SECT ION (1) OF SECTION 139: PROVIDED THAT WHEREIN RESPECT OF ANY SUCH SUM, TA X HAS BEEN DEDUCTED IN ANY SUBSEQUENT YEAR, OR HAS BEEN DEDUCTED DURING THE PREVIOUS YEAR BUT PAID AFTER THE DUE DATE SPECIFIED IN SUB SECTION (1) OF SECTION 139, SUCH SUM SHALL BE ALLOWED AS A DEDUCTION IN COMPUTING THE INCOME OF THE PREVIOUS YEAR IN WHICH SUCH TAX HAS BEEN PAID. PROVIDED FURTHER THAT WHERE AN ASSESSEE FAILS TO DEDUCT THE WHOLE OR ANY PART OF THE TAX IN ACCORDAN CE WITH THE PROVISIONS OF CHAPTER XVII-B ANY SUCH SUM BUT IS NOT DEEMED TO BE AN ASSESSEE IN DEFAULT UNDE R THE FIRST PROVISO TO SUB-SECTION (1) OF SECTION 201 , THEN, FOR THE PURPOSE OF THIS SUB-CLAUSE, IT SHALL BE DEEMED THAT THE ASSESSEE HAS DEDUCTED AND PAID THE TAX ON SUCH SUM ON THE DATE OF FURNISHING THE RETU RN -: 12: - 12 OF INCOME BY THE RESIDENT PAYEE REFERRED TO IN THE SAID PROVISO. SECTION 201(1), PROVISO STATES AS UNDER : PROVIDED THAT ANY PERSON, INCLUDING THE PRINCIPAL OFFICER OF THE COMPANY WHO FAILS TO DEDUC T THE WHOLE OR ANY PART OF THE TAX IN ACCORDANCE WITH THE PROVISIONS OF THIS CHAPTER ON THE SUM PAID TO A RESIDENT OR ON THE SUM CREDITED TO THE ACCOUNT OF RESIDENT SHALL NOT BE DEEMED TO BE AN ASSESSEE IN DEFAULT IN RESPECT OF SUCH TAX IF SUCH RESIDENT - I. HAS FURNISHED HIS RETURN OF INCOME U/S 139 II. HAS TAKEN INTO ACCOUNT SUCH SUM FOR COMPUTING INCOME ON SUCH RETURN OF INCOME, AND III. HAS PAID THE TAX DUE ON THE INCOME DECLARED BY HIM IN SUCH RETURN OF INCOME, AND THE PERSON FURNISHES CERTIFICATE TO THIS EFFECT FROM AN ACCOUNTANT IN SUCH FORM AS MAY BE PRESCRIBED . -: 13: - 13 COORDINATE BENCH IN THE CASE OF SHRI JAWAHAR LAL, I .T.A.NO. 204 & 205/IND/2011, ORDER DATED 31 ST AUGUST, 2012, HELD THAT AMENDMENT BROUGHT IN SECTION 40A(IA) BY FINANCE ACT , 2010, WAS RETROSPECTIVE FROM 1.4.2005. PRECISE OBSERVATIO N WAS AS UNDER :- 16. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND H AVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AN D ALSO DELIBERATED ON THE DECISIONS RELIED ON BY THE CIT D R IN THE CASE OF BHARTI SHIPYARD, AS WELL AS THE DECISION OF HON'BLE KOLKATA HIGH COURT IN THE CASE OF VIRGIN CREATIONS. WE FOUND THAT VARIOUS BENCHES OF THE TRIBUNAL HAVE DEA LT WITH THE ISSUE OF ALLOWABILITY OF CLAIM OF DEDUCTION U/S 40A(IA) DURING THE ASSESSMENT YEAR 2005-06 AND SUBSEQUENTLY , WHEREIN IT WAS HELD THAT IN VIEW OF THE DECISION OF HON'BLE KOLKATA HIGH COURT IN THE CASE OF VIRGIN CREATIONS AMENDMENT BROUGHT IN BY THE FINANCE ACT, 2010, WERE RETROSPECTIVE FROM 1.4.2005. IN THE CASE OF PIYUSH C.MEHTA, I.T.A.T., MUMBAI BENCH IN I.T.A.NO. 1231/MUM/2009 V IDE ORDER DATED 11 TH APRIL, 2012, HELD AS UNDER :- -: 14: - 14 17. IT CAN BE SEEN FROM THE ABOVE DECISION OF THE HON'BLE CALCUTTA HIGH COURT THAT AMENDMENT TO THE PROVISIONS OF SEC.40A(IA) OF THE ACT, BY THE FINANCE ACT, 2010 AS AFORESAID WAS HELD TO BE RETROSPECTIVE FROM 1.4.2005. IF THE AMENDMENT IS CONSIDERED AS RETROSPECTIVE FROM 1.4.2005, THE EFFECT WILL BE THAT PAYMENTS OF TDS TO THE CREDIT OF THE GOVERNMENT ON OR BEFORE THE LAST DATE FOR FILING RETURN OF INCOME U/S. 139(1) OF THE ACT FOR THE RELEVANT AY HAVE TO BE ALLOWED & DEDUCTION. ADMITTEDLY, IN THE CASE OF THE ASSESSEE PAYMENTS WERE SO MADE BEFORE THE SAID DUE DATE AND IN TERMS OF THE DECISION OF THE HON'BLE CALCUTTA HIGH COURT NO DISALLOWANCE COULD BE MADE BY THE AO U/S. 40(A)(IA) OF THE ACT. 18. THE QUESTION NOW IS AS TO WHETHER TO FOLLOW THE DECISION OF THE HON'BLE SPECIAL BENCH WHICH HAS TAKEN THE VIEW THAT -: 15: - 15 AMENDMENT BY THE FINANCE ACT, 2010 TO THE PROVISIONS OF SEC.40(A)(IA) OF THE ACT IS PROSPECTIVE AND NOT RETROSPECTIVE FROM 1.4.2005 OR THE DECISION OF THE HON'BLE CALCUTTA HIGH COURT TAKING A CONTRARY VIEW. ON THE ABOVE QUESTION, THE LEARNED COUNSEL FOR THE ASSESSEE BROUGHT TO OUR NOTICE THE DECISION OF THE ITAT DELHI IN THE CASE OF TEJ INTERNATIONAL (P) LTD. V. DY. CIT (2000) 69 TTJ (DEL) 650, WHEREIN IT WAS HELD THAT IN THE HIERARCHICAL JUDICIAL SYSTEM THAT WE HAVE IN INDIA, THE WISDOM OF THE COURT BELOW HAS TO YIELD TO THE HIGHER WISDOM OF THE COURT ABOVE, AND THEREFORE, ONCE AN AUTHORITY HIGHER THAN THIS TRIBUNAL HAS EXPRESSED ITS ESTEEMED VIEWS ON AN ISSUE, NORMALLY, THE DECISION OF THE HIGHER JUDICIAL AUTHORITY IS TO BE FOLLOWED. THE BENCH HAS FURTHER HELD THAT THE FACT THAT THE JUDGMENT OF THE HIGHER JUDICIAL FORUM IS FROM A NON-JURISDICTIONAL -: 16: - 16 HIGH COURT DOES NOT REALLY ALTER THIS POSITION, AS LAID DOWN BY THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT V. GODAVARIDEVI SARAF, 113 ITR 589(BOM). 19. IN VIEW OF THE ABOVE, WE HOLD FOLLOWING THE DECISION OF THE HON'BLE CALCUTTA HIGH COURT THAT AMENDMENT TO THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT, BY THE FINANCE ACT, 2010 IS RETROSPECTIVE FROM 1.4.2005. CONSEQUENTLY, ANY PAYMENT OF TAX DEDUCTED AT SOURCE DURING PREVIOUS YEARS RELEVANT TO AND FROM AY 05-06 CAN BE MADE TO THE GOVERNMENT ON OR BEFORE THE DUE DATE FOR FILING RETURN OF INCOME U/S.139(1) OF THE ACT. IF PAYMENTS ARE MADE AS AFORESAID, THEN NO DISALLOWANCE U/S 40(A)(IA) OF THE ACT CAN BE MADE. ADMITTEDLY IN THE PRESENT CASE THE ASSESSEE HAD DEPOSITED THE TAX DEDUCTED AT SOURCE BEFORE THE DUE DATE FOR FILING RETURN OF INCOME U/S. 139(1) OF THE ACT AND THEREFORE THE IMPUGNED DISALLOWANCE -: 17: - 17 DESERVES TO BE DELETED. WE ORDER ACCORDINGLY AND ALLOW THE APPEAL BY THE ASSESSEE. 9. AS PER CONTENTION OF LD. AUTHORIZED REPRESENTATIVE THE ASSESSEE HAS NOT BEEN TREATED AS ASSESSEE IN DEFAUL T U/S 201(1). AS PER LD. AUTHORIZED REPRESENTATIVE, THE A MOUNT OF EXPENDITURE INCURRED BY ASSESSEE HAVE BEEN DULY INC LUDED BY RECIPIENT IN THEIR INCOME. RECIPIENT OF INCOME HAV E FILED THEIR RESPECTIVE RETURNS DULY INCORPORATING THE INCOME RE CEIVED FROM THE ASSESSEE ON WHICH DUE TAXES HAVE BEEN PAID TO T HE DEPARTMENT AND NECESSARY FORMS 26A WAS ALSO CLAIMED TO BE FILED BEFORE THE CIT(A). 10. IN VIEW OF THE ABOVE DISCUSSION, WE RESTORE THE MAT TER BACK TO THE FILE OF THE ASSESSING OFFICER TO VERIFY THE RESPECTIVE RETURNS FILED BY THE RECIPIENTS OF INCOME U/S 139, CLAIM OF ASSESSEE THAT RECIPIENTS OF SUCH INCOME HAVE ALREAD Y INCORPORATED THE AMOUNT RECEIVED FORM ASSESSEE ON A CCOUNT OF JOB WORK CHARGES OF RS. 1,04,80,591/- PAID TO M/S. KARTIK SOLVEX PVT.LTD. AND ALSO CLEARING, FORWARDING AND TRANSPORTATION CHARGES OF RS. 11,22,460/- PAID TO M /S. SWASTIK ENTERPRISES. THE ASSESSING OFFICER SHOULD A LSO VERIFY -: 18: - 18 CORRECTNESS OF ASSESSEES CLAIM THAT IT HAS NOT BEE N TREATED AS ASSESSEE IN DEFAULT U/S 201(1), IN ADDITION TO VERI FYING THE CERTIFICATE FURNISHED BY THE CHARTERED ACCOUNTANT OF THESE CONCERNS. THE ASSESSEE HAS AN OPPORTUNITY TO SUBSTA NTIATE ITS CLAIM BY FILING ANY OTHER DOCUMENTS AS PER LAW. THE ASSESSING OFFICER IS TO DECIDE AFRESH IN TERMS OF OUR ABOVE O BSERVATION. 11. SINCE THE MATTER IS SET-ASIDE, THE CROSS OBJECTION HAS BECOME INFRUCTUOUS. 12. IN THE RESULT, THE APPEAL FILED BY THE REVENUE AND ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES AND C ROSS OBJECTION IS DISMISSED. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 21 ST JUNE, 2013. SD/- SD/- (JOGINDER SINGH) (R. C. SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 21 ST JUNE, 2013. CPU* 19206