Where there was merely short deduction of TDS by assessee under section 194C instead of section 194-I and the persons to whom payments were made had duly paid tax on such payments, the second proviso to section 40(a)(ia), being curative and beneficial in nature, was retrospective from 1-4-2005; consequently, the Assessing Officer could not invoke section 40(a)(ia) to disallow the expenditure claimed by the assessee (AY. 2009-10)
PCIT v. Morgan Stanley India Capital Pvt Ltd [2025] 177 taxmann.com 699 (Bom) (HC)
S. 40(a)(ia): Amounts not deductible-Deduction at source-Short deduction of tax at source-Merely a short deduction of TDS by assessee under section 194C, and persons to whom payments were made by assessee had paid taxes on such payments, Assessing Officer could not have invoked provisions of section 40(a)(ia) and disallowed expenses claimed by assessee-Order of Tribunal affirmed. [S. 194C; Second proviso, 194I, 260A]
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