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2016 (11) TMI 113 - AT - Income TaxTDS u/s 195 - dis allowance of professional fees under section 40(a)(ia) for the alleged non-deduction of tax at source - Indo-France DTAA - Held that:- Following, inter alia, the decisions of the ITAT Panaji Bench in the case of Ajit Ramakant Phatarpekar (2015 (4) TMI 261 - ITAT PANAJI ), of the ITAT Agra Bench in the case of Virola International (2014 (2) TMI 653 - ITAT AGRA ), we hold that the retrospective amendment made by Finance Act, 2010 w.e.f. 01.06.1976 in Explanation 2 to section 9(2) of the Act, which received the assent of the President of India on 08.05.2010, does not create any liability to the assessee in the case on hand for deduction of tax under section 195 of the Act on the remittance to 'OBT' since the payment was made much earlier; in the period relevant to Financial Year 01.04.2008 to 31.03.2009. Since the assessee was not liable at that point in time to deduct tax at source in respect of the remittance e to 'OBT' the disallowance made thereof under section 40(a)(i) could not have been made and being factually and legally unsustainable, we direct the AO to delete the same. It is accordingly ordered. On this short point, we allow the assessee's appeal.
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