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40a(ia)

Ritik Zaveri (Article Assistant ) (26 Points)

27 December 2013

whether 40a(ia) is applicable to "payable amounts" or "paid amounts" or "both i.e. payable and paid"

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Deepak Gupta (CA Student) (15922 Points)
Replied 28 December 2013

Originally posted by : Ritik Zaveri
	whether 40a(ia) is applicable to "payable amounts" or "paid amounts" or "both i.e. payable and paid"

Sec. 40(a)(ia) TDS disallowance: CBDT issues circular to clarify stand.
[Circular No. 10/DV/2013 (Departmental View), dated 16.12.2013]

The CBDT has analyzed the controversy created by recent judgements on the question whether the term “payable” in sec. 40(a)(ia) includes the amounts that have already been paid during the year or it refers only to the amounts outstanding as at the year end. It is noted that while the Special Bench of the Tribunal in Merilyn Shipping & Transports vs. ACIT and the Allahabad High Court in CIT vs. Vector Shipping Services (P) Ltd has taken the view that the disallowance in sec. 40(a)(ia) does not apply to amounts that are already paid, a contrary view has been taken by the Calcutta High Court in CIT vs. Crescent Export Syndicate/Md. Jakir Hossain Mondal and the Gujarat High Court in CIT vs. Sikandarkhan Tunvar.

The CBDT has expressed the view that the disallowance u/s 40(a)(ia) would apply even to the amounts that have already been paid during the year. It has also clarified that if the High Court takes a view contrary to that taken by the CBDT, the CBDT’s view would not apply in that jurisdiction though steps will be taken to decide whether a SLP should be filed or legislative amendments made.

Attached File : 555789 1265390 circular departmental view 40 a ia .pdf downloaded: 168 times

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