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Sec. 40(a)(ia) of Income Tax Act, 1961 - Business Disallowance – One of the issue in the appeal of the assessee is as to whether the ld. CIT(A) was justified in confirming the disallowance of transport expenses made u/s.40(a)(ia) of the Act in the sum of Rs. 2,06,255/- paid without deduction of tax at source.Ld. ITAT decided the issued in the favour of the assessee holding that ”if the payees have included the subject mentioned transaction in their income tax returns, then the assessee payer should not be treated as assessee in default and disallowance u/s.40(a)(ia) of the Act should be deleted in its hands. IF the subject mentioned transaction is not reflected in the income tax returns of the payees, then disallowance made in the hands of the assessee u/s 40(a)(ia) of the Act would remain in force.“ - MEHRA EYETECH PVT. LTD. V/s ADDI. CIT -  206 TTJ 769 (ITAT-MUMBAI)