IN INCOME TAX APPELLATE TRIBUNAL Bench, Mumbai Before Shri B.R. Baskaran (AM)& Shri Amit Shukla (JM) I.T.A. No. 3310/Mum/2012 (Assessment Year 2008-09) Addl. CI T 23(1) Shri Avadhut Ramakant R.No. 108 Vs. Wagh C-10, 1 s t Floor 4/113, Bhandup BKC, Bandra (E) Industrial Estate Mumbai-400 051. LBS Marg Bhandup West Mumbai-400 078. (Appellant) (Respondent) I.T.A. No. 3818/Mum/2012 (Assessment Year 2008-09) Shri Avadhut ACIT 23(1) Ramakant Wagh Vs. R.No. 108 B-603, Presidential Pratyakshkar Bhavan Tower, L.B.S. Marg C-10, 1 st Floor Ghatkopar West BKC, Bandra (E) Mumbai-400 086. Mumbai-400 051. (Appellant) (Respondent) PAN No.AABPW2515K Assessee by Shri Milind Sahasrabudhe Department by Shri Sachchidanand Dubey Date of Hearing 4.8.2016 Date of Pronouncement 14.9.2016 ORDER Per B.R. Baskaran (AM) :- These cross appeals are directed against order dated 29-02-2012 passed by Ld CIT(A)-33, Mumbai and they relate to assessment year 2008- 09. 2 Avdhut Ramakant Wagh 2. assessee is dealer of Kirloskar brand pumps. assessment of year under consideration was completed by AO by making following additions:- (a) Addition of credit in Capital account Rs.69,19,053/- (b) Disallowance u/s 43B of Act - Rs. 4,23,499/- In appellate proceedings, Ld CIT(A) deleted addition relating to credit found in Capital account. With regard to addition made u/s 43B of Act, Ld CIT(A) noticed that same included TDS payable amount of Rs.2,94,892/-. Hence Ld CIT(A) expressed view that corresponding amount, i.e., amount on which TDS was deducted, is required to be disallowed u/s 40(a)(ia) of Act. Accordingly he disallowed expenses to tune of Rs.26,05,347/- u/s 40(a)(ia) of Act. assessee pleaded that TDS amount was paid before due date for filing return of income. However, Ld CIT(A) disallowed claim of assessee by following decision rendered by Special bench of Tribunal in case of Bharti Shipyard Ltd (ITA No.2404/Mum/2009. Aggrieved by order passed by Ld CIT(A), both parties are in appeal before us. 3. revenue has filed appeal challenging relief granted by Ld CIT(A) in respect of addition of credits found in capital account of assessee. We notice that Ld CIT(A) has given finding that assessee has transferred assets from his personal account to business account by passing journal entry. Thus, assessee has incorporated assets in Asset side of Balance Sheet and value of those assets has been credited to Capital account of assessee. From paper book filed by assessee, we notice that assessee has passed journal entry for transferring assets from his personal account to Capital account. When specific query was raised to assessee as to whether Personal account was filed along with return of income, Ld A.R made statement at bar that Personal account has been filed in year under consideration and also in earlier years. Under these set of facts, we are of view that 3 Avdhut Ramakant Wagh Ld CIT(A) was justified in holding that credit to Capital account with value of assets transferred from Personal account, by passing journal entry would not give rise to any income assessable u/s 68 of Act. Accordingly we affirm his order passed on this issue. 4. With regard to issue of disallowance made u/s 40(a)(ia) of Act, we notice that assessee has paid TDS amount of Rs.2,94,892/- on 11.6.2008, i.e., before due date for filing return of income. We notice that Ld CIT(A) has followed decision rendered by Special bench of ITAT in case of Bharti Shipyard Ltd (supra). We notice that Finance Act 2010 has introduced proviso in sec. 40(a)(ia) w.e.f. 1.4.2010, wherein it was provided that disallowance shall be made only if TDS amount is paid after due date for filing return of income. above said proviso has been held to be curative in nature and hence applicable for earlier years also by Hon ble High Court of Calcutta in case of Virgin Creations (GA No.3200/2011). above said decision of Hon ble Calcutta High Court was followed by co-ordinate bench of Mumbai Tribunal in case of Piyush Mehta (ITA No.1321/Mum/2009 dated 11.4.2012) in preference to decision rendered by Special bench. Accordingly, by following decision rendered in case of Piyush Mehta & M/s Virgin Creations (supra), we hold that there is no requirement to make disallowance u/s 40(a)(ia) of Act and accordingly we set aside order passed by Ld CIT(A) on this issue. 5. In result, appeal filed by assessee is allowed and appeal of revenue is dismissed. Order has been pronounced in Court on 14.9.2016 Sd/- Sd/- (AMIT SHUKLA) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai; Dated : 14/9/2016 Copy of Order forwarded to : 4 Avdhut Ramakant Wagh 1. Appellant 2. Respondent 3. CIT(A) 4. CIT 5. DR, ITAT, Mumbai 6. Guard File. BY ORDER, //True Copy// (Dy./Asstt. Registrar) ITAT, Mumbai PS Addl. CIT 23(1), Mumbai v. Avadhut Ramakant Wagh