TMI Blog2013 (11) TMI 1786X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 40(a)(ia) of the Act on the ground that section 40(a)(ia) of the Act would be attracted only in respect of the payable amount of expenditure as on 31st March of the relevant previous year. 3. We have heard rival submissions and perused the orders of the lower authorities and material available on record. In the instant case, the AO found that during the year consideration the assessee has paid interest to G.E. Capital Cholamandlam Finance Co. of ₹ 8,16,690/- on which TDS was not deducted under section 194A of the Act, and therefore, by invoking the provisions of section 40(a)(ia) of the Act, the AO made disallowance of interest expenditure of ₹ 8,16,690/-. 4. On appeal before the learned CIT(A), the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scribed, which is such on which tax is deductible at source but such tax has not been deducted or if deducted not paid before the due date. The provision nowhere requires that the amount which is payable must remain so payable throughout during the year. If the assessee's interpretation is accepted. it would lead to a situation where the assessee who though was required to deduct the tax at source but no such deduction was made or more flagrantly deduction though made is not paid to the Government, would escape the consequence only because the amount was already paid over before the end of the year in contrast to another assessee who would otherwise be in similar situation but in whose case the amount remained payable till the end of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of Chapter XVII-B on any such sum but is not deemed to be an assessee in default under the first proviso to sub-section (1) of section 201, then, for the purpose of this sub-clause, it shall be deemed that the assessee has deducted and paid the tax on such sum on the date of furnishing of return of income by the resident payee referred to in the said proviso. Thus, it was the submission of the assessee that if the payee has paid tax on the sum paid by the assessee by showing the same as its income in the return of income filed by him, then no disallowance under section 40(a)(ia) of the Act can be made in the hands of the assessee. He, therefore, submitted that the learned CIT(A) should also consider this proviso while deciding the issu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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