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2018 (12) TMI 1065 - AT - Income TaxRevision u/s 263 - disallowance u/s 40(a)(i) - non deduction of tds payment to the non-resident u/s 195 and no remit to the Government account - Held that:- Point of allowability of deduction u/s 40(a)(i) in respect of payments which attracts the tax deducted at source under Chapter XVIIB is on remittance of such tax to Government account, but not before the year in which it was paid/incurred. It is a fact that the assessee has not complied with the provisions of section 195 and Chapter XVIIB of the Act. Therefore, till the expenditure was remitted to Govt. of India account, the assessee would not be entitled for the deduction. In the instant case, there is no dispute that the assessee has made the payment to the NRI and the payment attracts the TDS provisions u/s 195 of the Act and the assessee has neither deducted the TDS nor paid such tax to Govt. of India account. The assessee has claimed the expenditure in the impugned A.Y. and the same is covered by section 40(a)(i) and the AO has not examined the issue at the time of assessment. Therefore, the AO has committed an error in the assessment by not examining the issue which required to be examined consequently, which caused prejudice to the revenue. Therefore, we hold that Ld. Pr. CIT has rightly invoked the jurisdiction u/s 263 and we do not see any reason to interfere with the order of the Ld. Pr. CIT. - decided against assessee.
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