Kolkata High Court Reverses Special Bench Decision

The Special Bench of the Visakhapatnam Income Tax Appellate Tribunal in the case of M/s. Merilyn Shipping & Transports vs. ACIT had held that the provisions of Section 40(a)(ia) of the Income Tax Act, 1961 (ITA) are applicable only with respect to the amount ‘payable’ at the end of the year and would not apply to the amount actually ‘paid’ during the year. The judgement rendered by the Special Bench in the case of M/s Merilyn Shipping & Transports vs ACIT is now reversed by the Kolkata High Court in case of CIT vs. Crescent Export Syndicate. The High Court has held that the provisions of Section 40(a)(ia) are applicable not only to the amount ‘payable’ at the end of the year but also to any expenditure that becomes payable at any time during the relevant year and was actually ‘paid’ during the previous year. Here is the SKP Tax Alert on the above Ruling of Kolkata High Court.

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