These are the appeals filed by the assessees against the separate orders of the Commissioner of Income Tax (Appeals), Panaji-2 in appeal Nos. 116 & 177/CIT(A)-2/PNJ/2015-16 and 264 & 263/MRG/07-08, both dated 29/01/2016, for the Assessment Years 2005-06. ITA No.41/PAN/2016 is an appeal filed by Mr. Recardo Fatima Dias and ITA No. 42/PAN/2016 is an appeal filed by Mrs. Ninette Yvette Dias.

2. Dr. S. Sundaresan, Departmental Representative represented on behalf of the Revenue and Shri D.E. Robinson, Advocate represented on behalf of the assessees. ITA No. 41 & 42/PAN/2016

3. It was the submission by the Authorized Representative of the assessee that the only issue in the assessees appeals was against the action of the Commissioner of Income Tax (Appeals) in confirming the disallowance made by the Assessing Officer by invoking the provisions of sec. 40(a)(ia) in respect of two payments, one made to Architect for an amount of 1,74,600/- and the second paid to the Tax Consultant Mr. D.E. Robinson himself, for an amount of 50,000/-. It was the submission that the second proviso to section 40(a)(ia) which is inserted by the Finance Act 01/04/2013 had been claimed to be retrospective in nature, insofar as if the recipients have paid the taxes on the receipts, then no disallowance was called for in the hands of the assessee. It was the submission that the return of the Architect Mr.Nadkarni Binota was at page Nos. 2 to 4 of the paper book and the copy of the return of Mr. Robinson, Advocate was at page Nos. 5 to 8 of the paper book. It was the submission that the Commissioner of Income Tax (Appeals) held that the amendment by the Finance Act, 2012 was not retrospective, but prospective by applying the ratio laid down by the decision of the Honble Bombay High Court in the case of CIT Vs. Shyam Narayan & Brothers reported in 349 ITR 145 (Bom.) wherein it has been held that the amendment to section 40(a)(ia) by the Finance Act, 2010 w.e.f. 01/04/2010 was prospective. It was the submission by the Authorized Representative of the assessee that the amendment by the Finance Act, 2012 has not been decided by the Honble Bombay High Court and the Honble Delhi High Court in the case of CIT Vs. Ansal Land Mark Township P. Ltd. reported in 377 ITR 635 (Del.) has held that the amendment was retrospective in nature. It was the further submission that the recipients have paid the taxes, no disallowance under section 40(a)(ia) was liable to he made. It was the further submission that there is no contrary decision of any of the High Courts to the decision of the Honble Delhi High Court in the case of Ansal Land Mark Township P. Ltd. (supra). ITA No. 41 & 42/PAN/2016

4. In reply, Departmental Representative vehemently supported the orders of the Assessing Officer and the Commissioner of Income Tax (Appeals).

5. We have considered the rival submissions. Admittedly, the Honble Delhi High Court in the case of Ansal Land Mark Township P. Ltd. has categorically held that the amendment to the provisions of section 40(a)(ia) by the introduction of the second proviso w.e.f. by the Finance Act, 2012 is retrospective in nature. The decision of the Honble Bombay High Court in the case of Shyam Narayan and Brothers (supra) is on a completely different amendment. Consequently, if the recipients of the payments made by the assessee, have paid their taxes on the receipts, then no disallowance can be made in the hands of the assessees. However, for the purpose of verification as to whether recipients have paid the taxes, as this issue was not verified by the Assessing Officer, this issue is restored to the file of the Assessing Officer for verification as to whether the recipients have paid the taxes on the receipts of the assessee. The assessee shall produce such evidence before the Assessing Officer. If the recipients have paid the taxes and same is proved by the assessee, then no disallowance on this count shall be made under section 40(a)(ia).

6. In the result, appeals of the assessees are partly allowed for statistical purposes. Order Pronounced in the Court at the close of the hearing on Tuesday, the 17 th day of May, 2016 at Goa. Sd/- sd/- (N.S.SAINI) (GEORGE MATHAN) Accountant Member Judicial Member Dated : 17 th May, 2016. ITA No. 41 & 42/PAN/2016 vr/- Copy to:

1. The Assessee. a) Mr. Recardo Fatima Dias b) Mrs. Ninette Yvette Dias

2. The Revenue.

3. The CIT

4. The CIT(A)

5. The D.R.

6. Guard file. By order Assistant Registrar I.T.A.T., Panaji