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of <h1>Tribunal upholds CIT(A) decision on interest payment without TDS.</h1> <h3>DCIT, Circle-3 (1), Visakhapatnam Versus Shri S. Vijaya Kumar.</h3> The Tribunal dismissed the Revenue's appeal against the disallowance of interest payment without TDS under section 40(a)(ia) of the Act, upholding the ... TDS liability on interest paid to on-banking finance companies - Assessee submitted that due to EMI concept, he could not deduct TDS. Since assessee fails to comply with the provisions of TDS, the Assessing Officer disallowed amount under section 40(a)(ia) of the Act. - Held that:- The ld. CIT(A) by considering the decision of coordinate bench in the case of Mukundara Engineers & Contractors (2015 (7) TMI 1067 - ITAT VISAKHAPATNAM) and also in the case of assessee itself for the Assessment Year 2008-09, directed the Assessing Officer to allow the payments already made during the previous year relevant to the assessment year. There is no error or infirmity in the order of the ld.CIT(A) in directing the Assessing Officer for allowing the payments already made during the previous year relevant to the assessment year, hence, no interference is required. - Decided against the revenue. Issues Involved:1. Disallowance of interest payment without TDS under section 40(a)(ia) of the Act.2. Entitlement of interest under section 244A of the Act.Analysis:Issue 1: Disallowance of interest payment without TDS under section 40(a)(ia) of the ActThe appeal filed by the Revenue and the Cross Objection by the assessee were against the order of the Commissioner of Income Tax (Appeals) for the Assessment Year 2007-08. The Revenue raised the issue of disallowance of Rs. 2,18,009 for non-deduction of TDS on interest paid to non-banking finance companies. The Assessing Officer disallowed the amount under section 40(a)(ia) as the TDS was not deducted. The assessee argued that due to the EMI concept, TDS was not deducted. The CIT(A) directed the Assessing Officer to allow the payments made during the relevant previous year. The Tribunal upheld the CIT(A)'s decision based on previous judgments and dismissed the Revenue's appeal.Issue 2: Entitlement of interest under section 244A of the ActRegarding the Cross Objection by the assessee, the Assessing Officer withdrew the interest amount under section 244A as the refund was less than 10% of the tax liability. The CIT(A) confirmed this decision, stating that the interest was mistakenly granted earlier and there was no entitlement due to the refund amount being less than 10% of the tax. The Tribunal found no error in the CIT(A)'s order and dismissed the assessee's cross objection.In conclusion, both the appeal filed by the Revenue and the Cross Objection filed by the assessee were dismissed by the Tribunal, upholding the decisions of the Commissioner of Income Tax (Appeals) for the respective issues raised in the case.
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