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2022 (1) TMI 1188 - AT - Income TaxAddition u/s 40(a)(ia) - scope of amendment to section 40(a)(ia) - whether the disallowance of the expense should be restricted to 30% by virtue of the amended provisions of section 40(a)(ia) of the Act which was brought in the statute by the Finance Act (No. 2) 2014 - HELD THAT:- Admittedly, as per the provision of section 40(a)(ia) of the Act, the disallowance has to be restricted to the tune of 30% in respect of the expenses on which TDS was not deducted by the assessee. Such amendment was retrospective as held by the Delhi Tribunal in the case of Muradul Haque [2020 (6) TMI 504 - ITAT DELHI]. Likewise, the Ahmedabad Tribunal in the case of Electronic Instrumentation & Control Pvt. Ltd. [2019 (12) TMI 141 - ITAT AHMEDABAD] has held that the amendment brought under the provisions of section 40(a)(ia) of the Act by the Finance Act (No. 2) 2014 is applicable retrospectively. Thus, in view of the above provisions, the 100% of the expenses incurred by the assessee without incurring the TDS cannot be disallowed. Rather disallowance shall be restricted to the tune of 30% only of such expenses. Accordingly, we direct the AO to restrict the disallowance to the tune of 30% of the interest expenses, as discussed above, incurred by the assessee. Hence, the ground of appeal of the assessee is partly allowed.
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