Briefly stated, the assessee company is engaged in the business of generation, purchase, transmission and distribution of electricity. The case of the assessee was selected for scrutiny assessment under Sec. 143(2) of the Act. During the course of the assessment proceedings it was interalia observed by the A.O that the assessee had made a remittances of Rs. 7,94,56,634/- to certain foreign parties without deduction of any tax at source. The A.O holding a conviction that the assessee who remained under a statutory obligation to have deducted tax at source under Sec.195 on the aforesaid remittances had failed to do so, disallowed the amount of Rs. 7,94,56,634/- under Sec.40(a)(ia) of the Act.