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2017 (6) TMI 1177 - AT - Income TaxDisallowance u/s 40(a)(ia) - non deduction of tds on the interest paid to NBFC(s) - as per assessee entire amount stood “paid” during the year itself and no amount remained outstanding as on 31.03.2011 - Whether the provisions of Section 40(a)(ia) shall be attracted when the amount is not 'payable' to a contractor or sub-contractor but has been actually paid? - Held that:- The Hon'ble Supreme Court in the recent decision in the case of M/s Palam Gas Services Vs. CIT [2017 (5) TMI 242 - SUPREME COURT] held that when the entire scheme of obligation to deduct the tax at source and paying it over to the Central Government is read holistically, it cannot be held that the word 'payable' occurring in Section 40(a)(ia) refers to only those cases where the amount is yet to be paid and does not cover the cases where the amount is actually paid. If the provision is interpreted in the manner suggested by the appellant herein, then even when it is found that a person, like the appellant, has violated the provisions of Chapter XVIIB (or specifically Sections 194C and 200 in the instant case), he would still go scot free, without suffering the consequences of such monetary default in spite of specific provisions laying down these consequences. - Decided in favour of revenue
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