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TMI Blog2011 (8) TMI 1336X X X X Extracts X X X X X X X X Extracts X X X X ..... orth ₹ 123.16 lacs from sub-contractors. There are 10 sub-contractors to whom gross amount payable was of ₹ 1,23,16,160/-. The amount paid upto 28thd Feb. 2007 was to the tune of ₹ 66,00,882/-. The amount paid after 28-0207 was 41,51,834/-. Such details are available at page 3 of the assessment order. The amounts paid or payable have been considered after excluding the tax deducted at source and profit on sub-contracts by the contractor. The AO verified the payment made to the sub-contractors from the bank statement and the payments made upto 28-02-07 in respect of different sub-contractors are as under:- Name Amount 1. Pushpendra Singh Gehlot ₹ 12.50 lacs 2. Gajendra Singh Gehlot ₹ 12.00 lacs 3. Rajesh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng of return. 2.4 Before the ld. CIT(A), the assessee has relied upon the decision of ITAT Mumbai Bench in the case of Bapusaheb Nanasaheb Dhumal vs ACIT (ITA No. 6628 /Mum/2009 for the assessment year 2005-06) dated 25-062010. 2.5 The ld. CIT(A) rejected the contentions of the assessee after observing as under:- 3.4 From the language of Section 40(a)(ia), it is clear that only where the tax was deductible during the last month and was actually deducted during the last month of previous year, allowance has to be made if the amount is deposited before the due date of filing of return. In the case of appellant, the sum was deducted during the last month but was not deductible in that month. The sum was deductible in earlier months of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d of year, but before due date of filing of return. Obviously this can never be the intention of the legislature. This itself proves the fallacy of argument of the appellant. 3.6 As mentioned 2.6 Before us, the ld. AR has submitted that the assessee claimed before that AO that entire payments was credited in the month of March 07 and tax was deducted in the month of March 07 only. Therefore, the tax deposited on 28-05-07 is within the statutory period of payment i.e. 31-05-07. Hence, the expenditure was not disallowable in view of the provisions available at that relevant time. It was further submitted that provisions of Section 40(a)(ia) of the Act and Chapter XVII B are mutually exclusive. It was further submitted that the amendment ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, 1987 in respect of the insertion of first proviso to Section 43B was held as curative in nature and the same was given retrospective effect from the date of inception of Section 43A. 2. CIT Vs. Alom Extrusions Ltd. , 319 ITR 306 (SC) The amendment by Finance Act , 2003 for bringing about uniformity about payment in tax, duty, ceee and fee with contribution to welfare funds was held as curative in nature and held applicable retrospectively w.e.f. 01-04-1988. 3. CIT Vs. Poddar Cement (P) ltde, 226 ITR 625 By Finance Bill, 1987, the meaning and expression of house property in Section 27 was enlarged. The Hon'ble Apex Court in this case held that the amendment was intended to supply an obvious omission or to clear up the doubts a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paid before the end of the previous year. In the instant case, it is undisputed that the assessee has deducted the tax at source in the last month. Therefore, disallowance was not required to be made u/s 40(a)(ia) of the Act. Before us, the ld. AR has filed the copy of the TDS return showing the payment of TDS in the month of May 2007. Hence, we hold that the ld. CIT(A) was not justified in confirming the addition of ₹ 1,01,50,000. 3.1 The second ground of the assessee is that the ld. CIT(A) has erred in treating interest income of ₹ 7,55,721/- on FDR of banks, earnest money etc of firm as Income from other sources instead of a business income and thus making double addition. 3.2 The AO has accepted the business profit as show ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tured at his own sweet will. Therefore, the interest on such FDRs is to be considered as income from business and this will be the set off against deduction of interest. In other words, no separate deduction in respect of interest on FDR to the extent of ₹ 6,36,341/- is to be made. Similarly the interest of ₹ 86,545/ in Bank of Baroda CC A/c is in respect of available of surplus funds for temporary period. Such funds are for the purpose of business and therefore, the interest of ₹ 86,545/- is also the business income. Thus the interest to the extent of ₹ 86,545 plus ₹ 6,36,341 = ₹ 7,22,886/- will have to be considered as income under the head business. Moreover, the AO has accepted the interest receipts u ..... X X X X Extracts X X X X X X X X Extracts X X X X
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