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2016 (8) TMI 600 - ITAT VISAKHAPATNAMDisallowance of advertisement and professional charges u/s 40(a)(ia) - non dection of tds - Held that:- As relying on Merlyn Shipping & Transporters vs. ACIT [2012 (4) TMI 290 - ITAT VISAKHAPATNAM ] no disallowance can be made under the provisions of sec. 40(a)(ia) of the Act, for non compliance of TDS provisions, if expenditure incurred is paid within the financial year. In the present case on hand, the assessee claims that out of the total disallowance of ₹ 25,12,651/- and ₹ 12,90,386/- a sum of ₹ 22,56,980/- and ₹ 9,27,393/- respectively for the A.Y. 2008-09 and 2009-10 has been paid during the financial year before 31st March. Therefore, we set aside the issue to the file of the A.O. for the limited purpose of verification of paid and payable. In case the expenditure is paid during the same financial year within 31st march, then no disallowance can be made. In other words disallowance u/s 40(a)(ia) should be restricted to amounts remain payable at the end of the financial year. Disallowance of interest paid on unsecured loan under sec. 40(a)(ia) - Held that:- The present case on hand, the assessee claims that the recipient had included the interest income in their books of accounts and discharged the tax liability on such interest. The assessee further claims that the assessee was not held as an assessee in default under the provisions of sec. 40(a)(ia) of the Act. Though, assessee filed relevant details before the Bench, we have our own reservations, whether said information was made available to the Assessing Officer at the time of assessment. Therefore, we set aside the issue to the file of the A.O. for the limited purpose of verification, whether the recipient had accounted interest income and discharged his obligation by filing returns of income. In case, it is found that the recipient had considered the interest income in its books of accounts and discharged its obligation by filing return of income, then the A.O. is directed to delete the additions made towards interest paid on unsecured loans u/s 40(a)(ia) of the Act.
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