Section 40, 195 of Income Tax Act, 1961— TDS— This appeal is filed by revenue against the order passed by ITAT.
Whether ITAT was right in upholding the direction of CIT not to disallow u/s 40(a)(i) of the act particularly when royalty payments are hit by section 195 of the act?

In the first appeal, the CIT(A) relied upon the decision of the Hon'ble Delhi High Court in the case of Ansal Lankmark Township (P.) Ltd. Vs. CIT 279 CTR 384 (Delhi) which hold that 2nd proviso to Section 40(a)(ia) of the Act is retrospective in nature and applicable to the AY 2011-12 in question. In the light of the aforesaid decision, the CIT(A) held remitted the matter back to the file of the AO to allow the aforesaid expense, if it is found that the recipients have offered the payments made by the assessee as income in their tax return. [THE PRINCIPAL COMMISSIONER OF INCOME TAX-1 VERSUS M/S. ARVIND LIFESTYLE BRANDS LTD.][2019] 16 ITCD Online (15) [GUJARAT HIGH COURT]