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Ld. AR relied on the order of this Bench of the Tribunal in the case of Om Sri Nilamadhab Builders Pvt. Ltd., ITA No.296/CTK/2018, order dated 26.11.2019 and submitted that the Tribunal has restricted the disallowance to 30% as against 100% made by the AO and confirmed by the CIT(A), therefore, the ld. AR submitted that the disallowance made by the AO u/s.40(a)(ia) of the Act deserves to be reduced to 30%.

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Sec. 40(a)(ia) of Income Tax Act, 1961—Business Disallowance — Amendment brought to the Section 40(a)(ia) by the Finance Act, 2014 w.e.f. 01.04.2015, it is clear that the intent of legislature to reduce the hardship, it is proposed that in case of non-deduction or non-payment of TDS on payments made to residents as specified in section 40(a)(ia), the disallowance shall be restricted to 30% of the amount of expenditure claimed. - KENDRAPARA CO-OPERATIVE BANK LTD. V/s ASSTT. CIT - [2020] 82 ITR (TRIB) 188 (ITAT-CUTTACK)