Section 40(a)(ia) disallowance on rent payments remanded for verification of the payee's income disclosure.

Disallowance under section 40(a)(ia) for rent payments was not sustained outright because the key factual question was whether the payee had already disclosed the relevant receipts in its return of income. Since that verification was necessary to determine the correctness of the TDS-based disallowance, the matter was restored to the Assessing Officer for examination of the payee's disclosure. The result was a remand for fresh factual verification rather than a final deletion of the addition.

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Issues: Whether the disallowance under section 40(a)(ia) of the Income-tax Act, 1961, on rent paid to the Airport Authority of India required deletion or fresh verification as to whether the payee had disclosed the receipts in its return of income.

Analysis: The assessment included an addition for non-deduction of tax at source on rent payments. The dispute turned on whether the payee, being a body, had already included the receipts in its return of income, in which event the matter required factual verification before sustaining the disallowance. The issue was therefore restored to the Assessing Officer for verification of the payee's disclosure of the relevant receipts.

Conclusion: The disallowance was not finally deleted; the matter was remanded to the Assessing Officer for verification and the appeal was allowed for statistical purposes.

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