Query regarding section 40a(ia) of income tax act, 1961

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

03 February 2012 Dear Friends,

In the assessment of AY 2009-10 the AO disallowed the rent the reason being the tds deducted but not paid to central government account with in the time allowed.

But, the Finance Act, 2010 has amended the same retrospectively from the AY 2005-06 as if the TDS has deposited before filing of the return of income then the 40a(ia) disallowance can not be done.

Please give your opinion whether the AO contention is correct or Incorrect.

Thanks in Advance

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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03 February 2012 The amendment is not retrospective and in my view the AO's contention is not wrong.

CA. Hari Kishan

CA. Hari Kishan (Expert)
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04 February 2012 I agree with the experts view that the amendment is not retrospective. AO has a valid ground of contention.

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Querist : Anonymous

Querist : Anonymous (Querist)

04 February 2012 Sir Thanks for your replies and I request you to once verify the link which confirms that the amendment is retrospective from AY 2006-07

The Link is http://taxworry.com/mumbai-itat-amendment-to-disallowance-us-40aia-by-finance-act-2010-retrospective/

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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04 February 2012 From the same site-

Readers were informed in June 2011 about a Mumbai Tribunal decision which held amendment to disallowance u/s 40(a)(ia) by Finance Act 2010 is retrospective . Now this is no good ruling as the Special Bench of Mumbai Tribunal has held otherwise in recent decision in case of Bharati Shipyard Ltd. vs DCIT [2011] 141 TTJ 129 wherein the Special Bench was constituted decide on following issue.
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http://taxworry.com/mumbai-special-bench-amendment-to-section-40aia-not-retrospective/

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