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2010 (12) TMI 172 - AT - Income TaxAddition of income – unreasonable expenses u/s 40A(a)(2b) - Assessee contended that accounts are audited u/s 44AB therefore, there was no reason to disallow the claim of expenditure that the sub-contractors were separately assessed to tax by filing their respective returns - That the TDS was deducted on the said payment and the details were furnished before the AO - Held that: the approach of the AO of ad hoc disallowance was unwarranted – This issue of the appeal is allowed Late deposit of TDS amount - Addition of ₹ 6356387 u/s 40a(ia) - Amendment through Finance Act, 2010 - the provisions of section 40(a)(ia) as amended by the Finance Act, 2010 w.e.f 1-4-2010, which has newly been inserted by the Finance (No.2) Act, 2004, with effect from 1st April, 2005 to section 40 of the Act is remedial in nature, designed to eliminate unintended consequences which may cause undue hardship to the taxpayers and which made the provision unworkable or unjust in a specific situation, and is of clarificatory nature and, therefore, has to be treated as retrospective with effect from 1st April, 2005, the date on which section 40(a)(ia) has been inserted by the Finance (No.2) Act, 2004. - Decided in favor of assessee - Deduction allowed.
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