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2019 (5) TMI 1637 - AT - Income TaxAddition u/s.40(a)(ia) - non deduction of TDS for interest paid to the Co-operative credit societies - Scope of amendment - whether the second proviso to section 40(a)(ia) is retrospective in nature - HELD THAT:- Hon'ble Delhi High Court in the case of CIT Vs. Ansal Land Mark Township (P) Ltd [2015 (9) TMI 79 - DELHI HIGH COURT] as well as Pr. CIT-5 Vs. Perfect Circle India Pvt. Ltd. [2019 (1) TMI 1532 - BOMBAY HIGH COURT] have taken a view that the second proviso to section 40(a)(ia) of the Act has retrospective effect from 01.04.2005 being the date from which sub-clause (ia) of section 40(a) was inserted by the Finance ( No.2) Act, 2004. Hon'ble Supreme Court has held in the Hindustan Coca Cola Beverages P Ltd. Vs. CIT [2007 (8) TMI 12 - SUPREME COURT] that even in absence of second proviso to section 40(a)(ia) if it is noticed that the payee had already paid the tax, on the amount received under such circumstances, the Court held that the payer/deductor can at best be asked to pay the interest on delay in depositing tax and no further liability is warranted in the hands of the payer/deductor. AR has placed before us the additional evidences and necessary certificates from C.A. demonstrating that the taxes have been paid by the payee on the amount received as interest from assessee. These facts needs to be verified and established therefore, we set aside the order of the Ld. CIT(Appeals) and restore the matter back to the file of the Assessing Officer to verify the payments of taxes made by the payee and adjudicate the issue after providing reasonable opportunity of hearing to the assessee. Appeal of the assessee is allowed for statistical purposes.
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