9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (7) TMI 1246 - AT - Income TaxTDS u/s 194C - payment to transport contractors - amendment to Section 40(a)(ia) - retrospectivity - Held that - Respectfully following the judgment of Vatika Township Private Limited (2014 (9) TMI 576 - SUPREME COURT), the amendment brought in by Finance (No.2) Act of 2014 in Section 40(a)(ia), the same is held to be retrospective in nature; therefore, the amount to be disallowed u/s 40(a)(ia) should be restricted to 30% of the impugned amount. Thus, the assessee s appeal is partly allowed.
Issues:
1. Disallowance under Sec. 40(a)(ia) of the I.T. Act, 1961 2. Applicability of the amendment in Section 40(a)(ia) brought in by Finance (No.2) Act, 2014 Issue 1: Disallowance under Sec. 40(a)(ia) of the I.T. Act, 1961: The appeal was filed against the order of the ld. Commissioner of Income-tax (Appeals)-VIII, Ahmedabad for Assessment Year 2008-09. The assessee raised two grounds challenging the disallowance of amounts under Sec. 40(a)(ia). The Assessing Officer disallowed amounts paid to two individuals, considering them as transport contractors for whom TDS u/s 194C was not deducted. The first appeal confirmed the disallowance, leading to the second appeal. Issue 2: Applicability of the amendment in Section 40(a)(ia) brought in by Finance (No.2) Act, 2014: The counsel for the assessee argued that the amendment in Section 40(a)(ia) by Finance (No.2) Act, 2014, restricted the disallowance to 30% of the expenditure claimed in case of non-deduction of TDS. The counsel contended that the amendment was clarificatory and should be applied retrospectively. Citing the judgment of Vatika Township Private Limited, it was argued that amendments to remove hardships are clarificatory in nature. The Tribunal agreed with the counsel, holding the amendment to be retrospective and restricting the disallowance to 30% of the amount on which TDS was not deducted. In conclusion, the Appellate Tribunal at Ahmedabad partially allowed the assessee's appeal, citing the retrospective applicability of the amendment in Section 40(a)(ia) brought in by Finance (No.2) Act, 2014. The disallowance under Sec. 40(a)(ia) was restricted to 30% of the amount, in line with the clarificatory nature of the amendment.
|
