October 2018

Glimpses Of Supreme Court Rulings

Kishor Karia
Chartered Accountant
Atul Jasani, Advocate

1.        1.   Commissioner of Income Tax, Kolkata vs. Calcutta Export Company (2018) 404 ITR 654 (SC)


Business Expenditure Disallowance u/s. 40(a)(ia) - The amended provision of section 40(a)(ia) of the Act should be interpreted liberally and equitable and applies retrospectively from the date when section 40(a)(ia) was inserted i.e., with effect from the Assessment Year 2005-2006


Calcutta Export Company, a partnership firm, a manufacturer and exporter of casting materials, filed its return of income for the Assessment Year 2005-06 for Rs. 4,18,17,910/-. The case was selected for scrutiny and the assessment u/s. 143(3) of the Act was completed on 28.12.2007. The Assessing Officer, vide order dated 12.10.2009, disallowed the export commission charges paid by the assessee to Steel Crackers Pvt. Ltd. amounting to Rs. 40,82,089/- while stating that the tax deducted at source (TDS) on such commission amount on 07.07.2004, 07.09.2004 and 07.10.2004 ought to have been deposited by the assessee before the end of the previous year i.e. 31.03.2005 to get the commission amount deducted from the total income in terms of the provisions of section 40(a)(ia) of the Act as it stood then. But the same was deposited on 01.08.2005, hence, the assessee could not be allowed to claim deduction of the commission amount from the total income. T


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