2015 (7) TMI 760

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....of ld. CIT(A)-II, Dehradun dated 29th July, 2013 for A.Y. 2012-2013. 2. The solitary grounds raised by the assessee reads as under: "The Commissioner (Appeal) has erred in facts and in law, in confirming the assessee in default for not deducting T.D.S. u/s 194A of the Income Tax Act on interest due on Time Deposit received from members and who had subscribed and fully paid up shares and entitle....

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....rce on departmental officials since it has been quashed by the Hon'ble Bombay High Court through the Jalgaon District Central Cooperative Bank Ltd. reported in 265 ITR 423. Cognizance of this quashing has also been taken by the Hon'ble Gujarat High Court in the case of Gujarat Urban Cooperative Bank Federation reported in 209 Taxman 340 (Guj.) at para 6. It is thus clear that the said Circular cea....

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....er has been quashed. Thus a combined reading of both sections 194A(3)(v) and 194A(3)(viia) would indicate deduction of Tax at Source on time deposits. Here is also needs to be mentioned that the explanatory memorandum on the insertion of section 194A through the Finance Act, 1991 states that the intention was to bring within the tax net incomes arising from time deposits with banking companies and....

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.... a cooperative society to a member thereof or to any other cooperative society. On a plain reading of the section 194A(3)(v), we notice that the said section provides blanket exemption to the interest paid by any cooperative society to its members. The term "Cooperative Society" has been defined u/s 2(19) of the Act as under: "Cooperative Society" means a cooperative society registered under the....