TaxTMI 
TaxTMI 
2014 (6) TMI 604
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....he manufacturing of dyes and chemicals. Survey action under section 133A of the Act was carried out on 24.01.2008 to verify the TDS compliance by the Assessee. During the course of survey, it was noticed that for financial year ending 31.03.2006 (A.Y. 06-07) Assessee had paid interest of Rs. 16,23,458/- on loan borrowed from Kotak Mahindra Ltd. but Assessee had not deducted TDS u/s. 194A of the Act. Assessee was asked to explain as to why no TDS was deducted. Assessee interalia submitted that the Assessee had obtained margin amount from Kotak Mahindra Ltd for making application in public issue of shares and the amount paid to Kotak Mahindra Ltd. was considered as cost of purchase of shares and not as interest. The submission of the Assessee....
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....vy of demand u/s.201(1) and also u/s. 201(1 A) of the Income-tax Act. The order of the A.O. is, therefore, cancelled. 4. Aggrieved by the order of CIT(A), the Revenue is now in appeal before us and has raised the following effective ground:- 1. The Ld. CIT(A) erred in law as well as on facts of the case in deleting the order passed u/s.201 (1) of Rs.3,64,304/- & interest charged u/s. 201 (1 A) of the I T Act of Rs.80,146/- respectively for A.Y. 2007-08 by the A.O. even though the assessee had made payment to Kotak Mahindra Ltd. of Rs. 16,23,435/- but not deduct tax at source u/s. 194A of the IT Act. 5. Before us, ld. A.R. took us through the order of A.O and supported his order. On the other hand ld. A.R. reiterated the submissions made ....
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....atter before CIT(A). CIT(A) deleted the addition by holding as under:- 4.2 I have considered the A.O's observation and the above submission. It is a fact that the appellant had given margin money to Kotak Mahindra Ltd. for public issue of shares and that when the refund was received by them out of such public issue money, they had deducted their charges from the margin money amount and paid the balance amount. The appellant had, therefore, no chance to apply its mind and deduct tax at source, particularly when it had not made any payment or credited the amount at the relevant time. The amount was directly adjusted by Kotak Mahindra Ltd. from appellant's account with them. In the circumstances, though tax was not deducted, it was no....