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TMI BlogCLARIFICATION REGARDING APPLICABILITY OF PROVISIONS OF SECTION 40(a)(ia) WITH REGARD TO AMOUNT NOT DEDUCTIBLE IN COMPUTING INCOME CHARGEABLE UNDER HEAD 'PROFITS AND GAINS OF BUSINESS OR PROFESSION' ON CONFLICTING INTERPRETATIONS BY JUDICIAL AUTHORITIESX X X X Extracts X X X X X X X X Extracts X X X X ..... d that there are conflicting interpretations by judicial authorities regarding the applicability of the provisions of section 40(a)(ia) of the Income-tax Act, 1961 ('the Act') with regard to the amount not deductible in computing the income chargeable under the head 'Profits and gains of business or profession'. 2. Section 40(a)(ia) of the Act reads as under: "…any interest, commission or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o disallow the amount which had actually been paid during the previous year without deduction of tax at source. The order of the Special Bench has since been put under interim suspension by the Andhra Pradesh High Court. 3.1 The Hon'ble Calcutta High Court and Hon'ble Gujarat High Court in the case of Commissioner of Income-tax, Kolkata-XI v. Crescent Exports Syndicate - 2013 (5) TMI 510 - CALCUT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... HABAD HIGH COURT has affirmed the decision of the Special Bench in Merilyn Shipping that for disallowance under section 40(a)(ia) of the Act, the amount should be payable and not which has been paid during the year. However, the decisions of the Hon'ble Gujarat and Calcutta High Courts (supra) were not brought to the attention of the Hon'ble Allahabad High Court. 3.4 In the case of ACIT, Circle 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch are payable at any time during the year. The statutory provisions are amply clear and in the context of section 40(a)(ia) of the Act the term "payable" would include "amounts which are paid during the previous year". 5. Where any High Court decides an issue contrary to the 'Departmental View', the 'Departmental View' thereon shall not be operative in the area falling in the jurisdiction of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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