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2018 (10) TMI 295 - AT - Income TaxTDS u/s 194A - interest paid on unsecured loans raised from Bajaj Auto Finance Company - Non deduction of tds - addition u/s 40(a)(ia) - certificates filed by the assessee are not in Form no.26A - whether in view of 2nd proviso to Section 201(1) read with 1st proviso to Section 201(1) the conditions mentioned therein have been met or not? - Held that:- Certificate in Form 26A may not have been furnished but once such a declaration has been given, then such an artificial disallowance of Section 40(ia) should not be made. Section 40(ia) is meant for collection of tax at source on behalf of payee and if such taxes has neither been deducted by the payer nor shown by the payee then there is loss to the exchequer which consequently entails disallowance of expenditure claimed by the assessee. Such a provision cannot mean to call for disallowance when payer has paid the taxes on such an income as this proviso was brought to remove such hardship to the payer. Now such a beneficial amendment has been held to be retrospective by the Courts. Therefore, when payee has confirmed that it has accounted such an interest payment as its income, then no disallowance u/s. 40(ia) should be made. Accordingly, the addition made by the Assessing Officer is deleted. - Decided in favour of assessee.
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