2015 (10) TMI 1460

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....the assessee, which was paid without deducting TDS as per the provisions of sec.194A of the Act. 3. The Assessing Officer observed that the assessee has paid interest to the following parties:- Sr.No. Name of the Party Interest paid 1 Indian Oil Corporation Ltd. Rs. 5,30,320/- 2 L & T Finance Rs. 35,32,622/- 3 Finance on HP (L & T Finance) Rs. 23,37,717/-     Rs. 64,00,659/- According to the Assessing Officer, as per the provisions of sec. 194A, the assessee should have deducted TDS on the interest paid to the said parties on loans borrowed from them. Since the assessee failed to deduct TDS, he by invoking the provisions of sec. 40(a)(ia) of the Act disallowed the deduction of Rs.....

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.... But the Hon'ble Tribunal said that since the deducted has paid taxes on the income, there is no need to deduct the tax all over again. Instant case is quite similar to the case decided by the Hon'ble Supreme Court. In the instant case, the recipient has shown interest income amounting to Rs. 46,82,700/- in its Return and has paid taxes on the same. Therefore, in the case of L&T Finance, disallowance be restricted to the balance amount of Rs. 11,87,639/- on which tax was not paid by the deductee. Interest of Rs. 5,30,320/- was paid to M/s Indian Oil Corporation Ltd. without deducting any tax at source. The appellant has contended that since Indian Oil Corporation Limited is a Govt. body, therefore TDS provisions shall not b....