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TMI Blog2018 (12) TMI 1383X X X X Extracts X X X X X X X X Extracts X X X X ..... to Sec.40(a)(ia) of the Act is declaratory and curative in nature and has retrospective effect from 01.04.2005. As long as payee or resident has filed its return of income disclosing the payment received by and in which the income embedded by it and has also paid taxes on such income, then no disallowance can be made u/s 40(a)(ia). Before us Revenue has not pointed out any contrary binding decision in its support - no disallowance u/s 40(a)(ia) of the Act is called for in the present case and thus, the ground of the assessee is allowed. - ITA No.1154/PUN/2017 - - - Dated:- 1-11-2018 - Shri Anil Chaturvedi, AM For the Assessee : Shri S.N. Puranik For the Revenue : Dr. Mahesh Akhade ORDER PER ANIL CHATURVEDI, AM : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the sole controversy is with respect to disallowance u/s 40(a)(ia) of the Act. 4. During the course of assessment proceedings, on perusing the details, AO noticed that assessee had paid interest of ₹ 44,41,419/- to Tata Capital Financial Services Limited on which the TDS u/s 194A of the Act was not deducted by the assessee. The assessee was asked to explain as to why the amount of interest not be disallowed u/s 40(a)(ia) of the Act on account of non-deduction of TDS. Assessee made detailed submission which was not found acceptable to the AO. AO further held that the second proviso to Sec.40(a)(ia) of the Act which was inserted by the Finance Act, 2012 cannot be held to be retrospective. He therefore disallowed payment of interest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... directions to examine the contention of the Assessee and decide the issue afresh and in accordance with law. Thus, the contention of the Appellant regarding the view taken by the Hon'ble Pune ITAT is erroneous and the reliance placed on this case is misplaced. In view of the discussion, it is held that the Proviso cannot be applied retrospectively. The question of therefore considering the CA Certificate of Tata Capital and adjudicating on it does not arise. In light of the above, the AO's action, of holding the interest payment without deduction of Tax at source u/s 194A of the Act and the same being hit by the provision of Section 40(a) (ia) and therefore warranting disallowance is upheld. The disallowance is sustained. Aggr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion, on which TDS u/s 194A of the Act was not deducted by the assessee. Assessee has however placed on record the copy of the CA Certificate (this Certificate was also produced before Ld.CIT(A)) wherein the CA has certified that the payee (Tata Capital Finance Services Ltd.,) has accounted for interest received from the assessee as its income and has paid the tax on such interest. In such a situation, I am of the view that no disallowance u/s 40(a)(ia) of the Act is called for in view of the decision of Hon ble Delhi High Court in the case of CIT Vs. Ansal Land Mark Township Pvt. Ltd., reported in (2015) 377 ITR 635, wherein it has held that insertion of second provisio to Sec.40(a)(ia) of the Act is declaratory and curative in nature and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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