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2017 (9) TMI 1519 - ITAT HYDERABADDisallowance u/s 40(a)(ia) - Held that:- As brought to our notice that in the light of the decision in the case of Palam Gas Service vs. CIT (2017 (5) TMI 242 - SUPREME COURT) the judgment of the jurisdictional High Court in the case of Janpriya Engineering Syndicate (2015 (5) TMI 309 - ANDHRA PRADESH HIGH COURT ) is no longer a good law and hence section 40(a)(ia) is not applicable even with respect to the payments already made by the assessee. In other words, section 40(a)(ia) can be applied if the amount is “paid” or “payable” to any resident on which if the tax is deductible at source but it has not been deducted. Having regard to the binding decision of the Apex Court we are of the view the disallowance made by the A.O. u/s 40(a)(ia) of the Act is in accordance with law and therefore we partly modify the order of the Ld. CIT(A) and hold that irrespective of whether the amount is paid or payable, so long as there is default in deduction of tax at source, provisions of section 40(a)(ia) has to be invoked. - Decided in favour of revenue.
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