Recipient tax-payment evidence requires verification and fresh adjudication of withholding-tax disallowance after hearing the assessee.

Additional evidence showing that the recipient included the relevant payment in income and paid tax is to be admitted for examining the disallowance under section 40(a)(ia). The Assessing Officer must verify the documents' veracity, authenticity and relevance after giving the assessee an opportunity of hearing, and then undertake fresh adjudication of the disallowance in light of that evidence.

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Issues: Whether additional evidence concerning tax paid by the recipient should be admitted and the disallowance under section 40(a)(ia) reconsidered.

Analysis: The additional documents, showing that the payee had included the relevant amount in its income and paid tax, were found relevant and were admitted. Their veracity, authenticity and relevance required factual examination by the Assessing Officer after affording the assessee an opportunity of hearing.

Conclusion: The disallowance under section 40(a)(ia) requires fresh adjudication by the Assessing Officer in light of the admitted additional evidence.

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