2015 (7) TMI 689

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.... B. Veerappa, J. - The revenue has filed the above appeal against the orders passed by the authorities holding that, the chit dividend paid by the assessee to its customer, would not amount to interest as defined under the provisions of Section 2(28A) of the Income-tax Act, 1961 (for short hereinafter referred to as 'the Act') and consequently, no deduction of TDS under the provision....

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....it scheme. The said amount is called as dividend. However, while making these payments, the assessee failed to deduct TDS amount on the sum earned as income by the customers. Under the scheme, the unsuccessful members in the auction chit will earn dividend and the successful bidders will be entitled to retain the face value till the stipulated time under the scheme. The Department authorities took....

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....fore the Appellate Commissioner. 4. The Appellate Commissioner by the order dated 13.5.2008 has held that the assessee was not liable to pay interest under the provisions of Section 2(28A) of the Act and therefore, no deduction at source under the provisions of Section 194A of the Act had arisen and therefore, there is no liability on the part of the assessee to deduct the tax at source. Accord....

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....ct should be adopted and not as per the Income-tax Act or the other law applicable?" 7. We have heard the learned Counsel for the parties to the lis. 8. The Division Bench of the Delhi High Court had an occasion to consider the said issue in the case of CIT v. Sahib Chits (Delhi) (P.). Ltd. [2010] 328 ITR 342 (Delhi) . After setting out the statutory provisions viz., Sections 2(28A) and 194A....