Section 40A(ia) deduction claim allowed where TDS was paid later and appellate powers were not barred by Goetze.

Deduction of expenditure disallowed earlier was allowable where tax was deducted at source and paid in a subsequent year under section 40A(ia), because the statutory condition for deduction was ultimately met and the relevant facts were undisputed. The absence of a revised return did not bar the appellate authority from entertaining the claim, since the restriction in Goetze (India) Ltd. does not curtail appellate powers to consider a claim otherwise permissible in law. On that basis, the claim was rightly allowed and the Revenue's challenge failed.

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Issues: Whether the assessee's claim for deduction of expenditure disallowed in the earlier year, where tax was deducted and paid in a subsequent year, could be allowed in appeal notwithstanding that the claim was not made by revised return.

Analysis: The expenditure fell within the framework of section 40A(ia) of the Income-tax Act, 1961, which permits deduction where tax deducted at source is subsequently paid in the manner contemplated by the provision. The facts supporting the claim were on record and were not disputed. The restriction in Goetze (India) Ltd. did not curtail the powers of the appellate authority to entertain a valid claim otherwise allowable under law. On that basis, the appellate authority was justified in granting relief.

Conclusion: The claim was rightly allowed and the Revenue's challenge failed.

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