On appeal by the revenue, the High Court held that the amendment to S. 40(a)(ia) by the Finance Act, 2014, which reduced the disallowance for late deposit of TDS from 100 per cent to 30 per cent, is a substantive change and not a curative one. Following the Supreme Court’s ruling in Shree Choudhary Transport Company v. ITO [2020] 426 ITR 289 (SC), the Court held that the amendment operates prospectively and cannot be applied to earlier assessment years. Therefore, for the assessee’s default, the entire expenditure was to be disallowed, and the benefit of the reduced 30 per cent disallowance was not available. Order of Tribunal set aside.   (AY. 2006-07)