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December 2013

Business expenditure: Disallowance u/s. 40(a) (ia): A. Y. 2008-09: Amendment of section 40(a)(ia) by Finance Act, 2010 is retrospective and is applicable for the A. Y. 2008-09 also:

By K. B. Bhujle, Advocate
Reading Time 1 mins
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CIT vs. Naresh Kumar; 262 CTR 389 (Del):

In respect of the A. Y. 2008-09, the Tribunal allowed the assessee’s claim that no disallowance u/s. 40(a) (ia) should be made in view of the amendment of section 40(a)(ia) by the Finance Act, 2010.

In appeal, the Revenue contended that the amendment is w.e.f 01-04-2010 and is not
retrospective, and accordingly, the amendment is not applicable for the A. Y. 2008-09. The Delhi High Court upheld the decision of the Tribunal and held as under:

“The Tribunal was justified in holding that the amendment made to section 40(a)(ia) by the Finance Act, 2010 should be given retrospective effect and applicable to A. Y. 2008-09 in question”

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