CIT vs. M/s Virgin Creations (Calcutta High Court)
The assessee deducted tax at source from paid charges between the period 1.4.2005 & 28.4.2006 though it paid the TDS in July and August 2006. The TDS was deposited after the end of the FY though before the due date of filing of the return of income. The AO invoked s. 40(a)(ia) and held that as the TDS had not been paid on or before the last day of the previous year, the deduction was not admissible. The Tribunal allowed the assessee’s claim. On appeal by the department, the High Court had to consider whether the amendment to s. 40(a)(ia) by the FA 2010 w.e.f. 1.4.2010 to provide that the TDS has to be paid on or before the due date for filing the ROI was prospective or retrospective. HELD by the High Court dismissing the department’s appeal:
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