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2016 (5) TMI 1369 - AT - Income TaxTDS u/s 194C - Disallowance of interest expenses under section 40(a)(ia) - non deduction of tds - Held that:- In view of the rejection of books of account, no further deduction can be disallowed by the AO. Though the proposition of law is correct but when we look into the assessment order, we find that the income has been estimated on the basis of gross sale of the assessee and disallowance has been separately done by the AO under section 40(a)(ia). Applying the ratio laid down in the case of Rajendra Yadav [2016 (3) TMI 358 - ITAT JAIPUR] wherein held though the substitution in section 40 has been made effective with effective from 1.4.2015, benefit of the amendment should be given to the assessee either by directing the AO to confirm from the contractors as to whether the said parties have deposited the tax or not and further or restrict the addition to 30%, it will be in the interest of justice if the disallowance is only restricted to 30% of ₹ 3,34,612/- which comes to ₹ 1,00,384/-. Accordingly the issue is partly allowed in favour of the assessee.
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