The ITAT held that the assessee was not liable for disallowance...

The ITAT held that the assessee was not liable for disallowance under section 40(a)(ia) for non-deduction of TDS under section 195 before remittance abroad. The Tribunal relied on the Bombay HC decision in a similar matter favoring the assessee, clarifying that the Revenue's case did not fall within the exception under para 3.1(l) of the Circular dated 15.03.2024. The clause excludes appeals concerning recovery proceedings against deductors for failure to deduct tax at source. Consequently, the disallowance was set aside, confirming that the liability to deduct TDS prior to payment did not arise in the facts of the case, thereby allowing the claim of the assessee.