TaxTMI 
TaxTMI 
2004 (3) TMI 8
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....ged in the business of real estate and construction. A survey was conducted under section 133A of the Act and certain cheque receipts registers and cheque payment registers were found in the business premises of the company. Examination of those books disclosed that loans were taken by the directors and managing director in their individual capacities from private lenders in the name of the assessee-company. The loan amounts received byway of cheques in the name of the assessee were deposited in the bank account of the assessee and immediately transferred to the accounts of directors/managing director on the same day, by issuing corresponding cheques. When the directors/managing director repaid the loan amount or paid interest, such payment....
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....of the Act. As a consequence, the provisions of sections 201(1) and 201(1A) of the Act were applied. The Assessing Officer passed five orders in regard to the five assessment years under section 201(1) of the Act, deeming the company to be an assessee in default in respect of the tax and claiming the tax from the assessee. Five orders were also passed by the Assessing Officer under section 201 (1A) of the Act making the assessee liable for payment of simple interest as specified (on the ground that tax which ought to have been deducted was not deducted) from the date on which such tax was actually paid. Five orders were also passed by the Assessing Officer under section 271C of the Act levying penalty in a sum equal to the amount of tax whi....
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....6 1996-97 201(1) 63,215 6. 197/02 618/Bang/1996 1992-93 201(1A) 14,285 7. 196/02 620/Bang/1996 1993-94 201(1A) 32,747 8. 198/02 622/Bang/1996 1994-95 201(1A) 7,130 9. 199/02 624/Bang/1996 1995-96 201(1A) 14,332 10. 200/02 626/Bang/1996 1996-97 201(1A) 4,344 11. 195/02 588/Bang/1996 1992-93 271C 23,134 12. 194/02 589/Bang/l996 1993-94 271C 68,384 13. 193/02 590/Bang/l996 1994-95 271C 19,467 14. 191/02 591/Bang/1996 1995-96 271C 70,071 15. 192/02 592/Bang/1996 1996-97 271C 63,215 6 The questions that can be said to arise for consideration in these appeal....
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....ot reflect any of these transactions, as loans obtained by it or repaid by it. On the other hand, directors/managing director showed the respective loans as their loan transactions in their accounts. Even payment of interest on these loans were reflected only in the books of account of the directors/managing director and not in the books of account of the assessee-company. It was also found that interest amount that was received by the assessee-company from it directors/managing director was exactly same as the interest that was paid by the assessee-company to the respective creditors. 8 The Assessing Officer and the appellate authority held that once the interest was paid to the lenders, by cheques issued by the assessee-company, the ob....
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.... "person who is responsible for paying interest", to deduct income-tax at the rates in force, when paying the interest. The finding of fact recorded by the appellate authority and the Tribunal makes it clear that the assessee-company was not responsible for paying interest as the borrowing was not by it, nor had the assessee-company paid interest from its funds. It merely acted as an agent of its directors/managing director in receiving the loan amount from the lender and forwarding it to the director/managing director and similarly where the loan was repaid, it received the amount from the director/managing director and paid it to the lender. The amounts repaid by the directors including interest, were not reflected in its books of account....