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2016 (9) TMI 1 - AT - Income TaxDisallowance u/s 40(a) - Held that:- Once the amount has been disallowed under the provisions of section 40(a)/40 (a) (ia) of the Act on the reason that tax has not been deducted, the AO cannot invoke the TDS provisions for holding the assessee as, “assessee in default” u/s 201 (1) of the Act. But, if the assessee subsequently claims deduction of the amount after payment of TDS, charging of interest u/s 201 (1A) of the Act for limited period during which TDS was not paid as per the provisions of the Act are applied and be charged accordingly. Accordingly, we direct the AO to verify the provisions made by the assessee towards contingent payments as narrated in the order of the CIT (A) chart filed by the assessee and reproduced by the CIT (A). In terms of the above, the AO will verify the details and will follow the decision of the Hon’ble Karnataka High Court in the case of Karnataka Power Transmission Company (2016 (2) TMI 412 - KARNATAKA HIGH COURT).
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