Section 40(a)(ia) applicable to expenses payable at the end of year and not to expenses paid during the year

0 comments Thursday, April 12, 2012

Vishakhapatnam Tribunal has held in the following case that disallowance u/s 40(a)(ia) due to non deduction of TDS is applicable to the expenses payable only and not to the expenses already paid in the previous year.

The object behind section 40(a)(ia) which I understand is to disallow those expenses which are expanded without deduction of requisite TDS, however the Tribunal has interpreted the word “payable” in section 40(a)(ia) strictly and consequently has held that said section doesnot apply to the expenses already paid. 
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