Income Tax Appellate Tribunal - MumbaiSadanand Krishna Nakha , Mumbai vs Assessee on 30 July, 2012आयकर अपील य अ धकरण "ई" यायपीठ मुंबई म।IN THE INCOME TAX APPELLATE TRIBUNAL "E" BENCH, MUMBAI

    ी आय. पी. बंसल, या यक सद य एवं ी संजय अरोड़ा, लेखा सद य के सम                  ।
      BEFORE SHRI I. P. BANSAL, JM AND SHRI SANJAY ARORA, AM

                 आयकर अपील सं./I.T.A. No.6205/Mum/2012
                  ( नधारण वष / Assessment Year: 2009-10)

Income-tax Officer -12(2)(4),                 Sadanand Krishna Nakhwa,
Room No.123B, Aayakar Bhavan,                 Prop. Of Streamsline Shipping,
                                      बनाम/
M. K. Road, Mumbai-400 020                    46, Pipewala Building, 4th Pastal
                                       Vs.    Lane, Colaba, Cuffe Parade,
                                              Mumbai-400 020
 थायी ले खा सं . /जीआइआर सं . /PAN/GIR No. ACNPN 6407 F
       (अपीलाथ /Appellant)                :          (     यथ / Respondent)
                                      &
                  या ेप सं./Cross Objection No. 274/Mum/2013
                 (Arising out of ITA No. 6205/Mum/2012)
                      ( नधारण वष / Assessment Year: 2009-10)
Sadanand Krishna Nakhwa,                      Income-tax Officer - 12(2)(4),
Prop. Of Streamsline Shipping,                Room No.123B, Aayakar Bhavan,
                                        बनाम/
46, Pipewala Building, 4th Pastal Lane,       M. K. Road, Mumbai-400 020
Colaba, Cuffe Parade,                    Vs.
Mumbai-400 020
 थायी ले खा सं . /जीआइआर सं . /PAN/GIR No. ACNPN 6407 F
       (अपीलाथ /Appellant)                :          (     यथ / Respondent)

       राज व क ओर से/Revenue by         :     Shri M. L. Perumal

              या ेपक/Cross objector     :     Shri K. Gopal &
                                              Shri Satendra Pandey

                 सनु वाई क तार ख /      :     10.12.2013
                  Date of Hearing
                 घोषणा क तार ख /
                                        :     20.12.2013
          Date of Pronouncement2ITA No. 6205/M/12 & CO No.274/M/13 (A.Y. 2009-10)Sadanand Krishna Nakhwa

                                    आदे श / O R D E R
Per Sanjay Arora, A. M.:These are cross appeals, i.e., by the Revenue and the Assessee, arising out of the
Order by the Commissioner of Income Tax (Appeals)-23, Mumbai ('CIT(A)' for short)
dated 30.07.2012, partly allowing the assessee's appeal contesting its assessmentu/s.143(3)of the Income Tax Act, 1961 ('the Act' hereinafter) for the assessment year
(A.Y.) 2009-10 vide order dated 20.12.2011.Revenue's Appeal (in ITA No. 6205/Mum/2012)2.     The only issue per the Revenue's appeal is the maintainability of the deletionu/s.
40(a)(ia)of the Act under the facts and circumstances of the case by the first appellate
authority. The basis of the relief by him has been by holding the amendment to section byFinance Act, 2010w.e.f. 01.04.2010 as retrospective, so that it would apply to the current
year as well. Per the said provision, a sum otherwise deductible in the computation of
incomeu/s. 28, on which tax is deductible at source (TDS) during a particular year, is
allowable only where the same (TDS) is actually paid by the end of the relevant previous
year (Clause B). An exception is made for payments/credits made during the last month
of the year, in which case an extended time period up to the due date of the filing of the
return for the relevant year is allowed (Clause A). In case of breach of the time limit, as
prescribed, the allowance is postponed to the year of actual payment of the TDS (vide
proviso thereto). The said provision, co-opted on the statute byFinance Act, 2008w.r.e.f.
01.04.2005, stands amended byFinance Act, 2010, extinguishing or removing the
difference in the period during the relevant year when the tax at source becomes
deductible, so that the same where paid by the due date of filing of return of the assessee-
deductor, would qualify for deduction for the said year. Correspondingly, the rate of the
interest on the delay in the payment (of TDS) stands enhanced from 12% p.a. to 18% p.a.
(section 201(1A)). The assessee's case, which found approval with the ld. CIT(A), is that
the amended provision is retrospective, so that the entire tax deducted at source having
been admittedly paid on 25.07.2009, i.e., before the due date of filing of the return for the3ITA No. 6205/M/12 & CO No.274/M/13 (A.Y. 2009-10)Sadanand Krishna Nakhwa

relevant assessment year in the assessee's case, is allowable, following the decision dated
06.03.2012 by the hon'ble Calcutta high court in the case ofCIT vs. Virgin Creations(in
ITA No.302 of 2011 GA 3200/2011 dated 23.11.2011). Aggrieved, the Revenue is in
appeal.3.     We have heard the parties, and perused the material on record.The Revenue has relied on the decision by theBharati Shipyard Ltd. vs. Dy. CIT[2011] 132 ITD 53 (Mum) (SB), holding after an elaborate discussion in the matter the
amendment under reference as not retrospective, apart from Board Circular No.1/2011
dated 06.04.2011 in respect of the explanatory notes to the provisions ofFinance Act,
2010, clarifying the provision as applicable from 01.04.2010.The amendment is neither
clarificatory nor declaratory, even as held by the apex court in the case ofCIT vs. Alom
Extrusions Ltd.[2009] 319 ITR 306 (SC) and Allied Motors (P.)Ltd. vs. CIT[1997] 224
ITR 677 (SC), relied upon by the hon'ble Calcutta high court inVirgin Creations(supra),
in holding the amendment under reference to be retrospective.The only issue, in view of the foregoing, as we perceive is whether the decision by
the Special Bench inBharati Shipyard Ltd.(supra) would prevail in preference to that by
the hon'ble Calcutta high court inVirgin Creations(supra). This is as no view, as we
understand, has yet been expressed by the hon'ble jurisdictional high court in the matter.
The tribunal in the case of Tej International (P.)Ltd. v. Dy. CIT[2000] 69 TTJ (Del) 650
has clarified that in case of conflict of view, the view by the hon'ble high court would
prevail over that by the Special Bench of the tribunal.In fact, the decision in the case ofVirgin Creations(supra) is being regularly followed by the co-ordinate Benches of this
tribunal, as in the case of Madineni Mohan vs. ITO [2013] 28 (Trib) 157 (Hyd.). We,
accordingly, endorse the impugned order on this ground. We decide accordingly.Assessee's C.O. (in C.O. No. 274/Mum/2013)4.     The only issue involved in this ground is maintainability in law of disallowance of
interestu/s.36(1)(iii)for Rs.81,383/- in the facts and circumstances of the case. At the4ITA No. 6205/M/12 & CO No.274/M/13 (A.Y. 2009-10)Sadanand Krishna Nakhwa

outset, the ld. AR would submit that he did not wish to press the assessee's C.O. in view
of the smallness of the amount under reference. In view thereof, the assessee's C.O.
warrants an in limine dismissal. We decide accordingly.5.      In the result, both the Revenue's appeal and the assessee's C.O. are dismissed.Order pronounced in the open court on December 20, 2013

                   Sd/ -                                      Sd/-(I. P. BANSAL)                              (SANJAY ARORA)
     या यक सद य / JUDICIAL MEMBER                लेखा सद य / ACCOUNTANT MEMBER

मुंबई Mumbai; दनांकDated : 20.12.2013
व. न.स./Roshani, Sr. PSआदे श क   त ल प अ े षत/Copy of the Order forwarded to :1. अपीलाथ / The Appellant2.     यथ / The Respondent3.    आयकर आयु त(अपील) / The CIT(A)4.    आयकर आयु त / CIT - concerned5.     वभागीय    त न ध, आयकर अपील य अ धकरण, मंब
                                              ु ई / DR, ITAT, Mumbai6.    गाड फाईल / Guard File
                                                   आदे शानस
                                                          ु ार/ BY ORDER,


                                              उप/सहायक पंजीकार (Dy./Asstt. Registrar)
                                      आयकर अपील य अ धकरण, मुंबई / ITAT, Mumbai