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2018 (9) TMI 1539 - ITAT COCHINDisallowance u/s 40(a)(ia) - Non-deduction of tax on royalty paid on the ground that the recipients of royalty have returned the royalty received as income in respective years - scope of amended provision - Held that:- As in the case of CIT v. Calcutta Export Co. (2018 (5) TMI 356 - SUPREME COURT) held that amended provisions of section 40(a)(ia) of the I.T.Act should be interpreted liberally and equitably and should be applied retrospectively from the date when section 40(a)(ia) of the I.T.Act was inserted, so that the assessee could not suffer intended and deleterious consequences beyond what the object and purpose of provision mandates. However, in the present case the CIT(A) not at all verified whether the recipients of the royalty have declared the same in their respective returns of income and paid tax thereon before deleting the addition made by the Assessing Officer by invoking the provisions of section 40(a)(ia) of the I.T.Act. Therefore, we remit the disputed issue to the file of the CIT(A) to call for remand report from the A.O. to verify whether the recipients have declared the royalty in their respective returns and paid tax thereon, and decide the same accordingly. Assessee's appeal allowed for statistical purposes.
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