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2014 (11) TMI 1018 - AT - Income TaxRetrospectivity of the amendment to Section 40(a)(ia) - Disallowance of payment of professional fees u/s 40(a)(ia) - non deduction of tds - Held that:- Undisputed facts of the case that the assessee had made payment of ₹ 2.40 lakhs to his son without deducting tax at source, that the AO had disallowed the said amount invoking the provisions of section 40(a)(ia) of the Act. We find that the Hon'ble Karnatake High Court in the case of Santosh Kumar Shetty (2015 (8) TMI 232 - KARNATAKA HIGH COURT ) has held that second proviso to section 40(a)(ia) is retrospective.Therefor, We hold that if the deductee pays the tax no disallowance should be made u/s 40(a)(ia) of the Act. We find that Hon'ble Karnataka High Court had referred to the judgment delivered in the case of Om Prakash R. Chaudhary [2015 (2) TMI 150 - GUJARAT HIGH COURT] ]. Considering the fact that son of the assessee had paid the tax on the professional fees and respectfully following the judgment of the High Court of Karnataka (supra), we decide the effective ground of appeal in favour of the assessee.
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