The Question before the High Court was “Whether the second proviso to S. 40(a)(ia) of the Act inserted by Finance Act, 2012 is clarificatory and retrospective in nature and disallowance under S. 40(a)(ia) of the Act by the Tribunal is justifiable where the recipient of the amount has already discharged his tax liability therein?” High court answered the question in favour of assessee and against the revenue . followed flowing case laws .CIT v. Ansal Land Mark Township P. Ltd. (2015) 377 ITR 635 (Delhi) (HC ) CIT v. Calcutta Export Company (2018 404 ITR 654 (SC) PCIT v. Manoj Kumar Singh; [2018] 402 ITR 238 (All) (HC) , PCIT v Perfect Circle India Pvt. Ltd ( Bom) (HC). (ITA No 707 2016 dt 7-01-2019s) PCIT v. Shivpal Singh Chaudhary [2018] 409 ITR 87 (P&H) (HC) Deeva Devi (Smt) v. PCIT ( Karn) (HC) ( WP No. 3928 /2018 dt.20 -02 -2018 ). Distinguished Thomas George Muthoot v. CIT. (2015)235 Taxman 246/ (2016) 287 CTR 101 (Ker ) (HC) (Approved Rajeev Kumar Agarwal v Add.CIT ( 2014) 34 ITR 479 (Agra ) (Trib) )
CIT v. Anand, S. M. (2019) 311 CTR 795 (Karn )(HC)
S. 40(a)(ia): Amounts not deductible – Deduction at source – Second proviso to S. 40(a)(ia) of the Act inserted by Finance Act, 2012 is clarificatory and retrospective in nature – No disallowance can be made where the recipient of the amount has already discharged his tax liability therein .[ S. 40(a) ,139(1) ]