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2016 (2) TMI 752 - AT - Income TaxDisallowance of prior period expenses u/s 40(a)(ia) - Held that:- When the expenditure actually paid in the assessment year under consideration, it is allowable on actual payment basis in view of the second limb of proviso to sec.40(a)(ia) of the Act. No expenditure mentioned in sections 30 to 38 of the Act are allowable unless the necessary TDS is deducted and remitted into the government account before filing of return u/s.139(1) of the Act. The provisions of sec.40(a)(ia) stipulate that the expenses are allowable only in the year in which the necessary TDS is deducted and remitted into the government account. In the present case, though the expenditure relating to earlier period, actually TDS made in the assessment year under consideration and it is allowable in the assessment year under consideration in view of the second limb of sec.40(a)(ia). Thus in view of Provisos to section 40(a)(ia) and 40(a)(i) the deduction claimed by the assessee has to be allowed in the year in which the tax was actually paid by the assessee. - Decided in favour of assessee
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