TaxTMI 
TaxTMI 
2016 (2) TMI 30
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....onvenience. In I.T.A No. 6965/Mum/2012 revenue has filed appeal on following grounds: "1. The Ld. CIT(A) has erred in law and on facts by allowing relief to the assessee relating to non deduction of tax at source in respect of interest on debenture without appreciating that w.e.f 01.06.1989 words 'at the time of credit' has been inserted in section 193 of the I.T. Act along with the explanation to section 193 w.e.f 01/06/1989 which casts an obligation on the assessee to deduct tax at source at the time of credit of such income. 2. The Ld. CIT(A) has erred in law and on facts by deleting the amount of tax determined on interest on debentures debited in P&L account of the assessee on the basis of his argument in para....
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.... debentures. The amount of such interest debited to Profit & Loss Account was Rs. 6,77,24,000/- as per the annexure to the Profit & Loss Account for the current year. As a result of Survey, proceedings u/s 201 were initiated against the assessee and the assessee was asked to submit the names and addresses of the parties to whom interest was paid, along with the details of interest credited to them and TDS thereon. In response the same, the assessee submitted following details: Name of the Debenture Holders Interest debited to P&L a/c as on 31.03.2000 Total o/s principal Cl.Bal as on 31.03.2000 TDS made IL & FS 60.28 280 None LIC of India 163.97 768.47 None GIC of India 13.97 65.99 None Orie....
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....,78,48/- u/s 201(1)/201(1A) of the Act. 4. The matter was carried before first appellate authority wherein various contentions were raised on behalf of assessee to oppose the order passed by Assessing Officer u/s 201/201 of the Act and having considered the same CIT(A) granted relief to the assessee same has been opposed on behalf of revenue inter alia submitting that CIT(A) erred on fact and law by allowing relief to the assessee. So the order of CIT(A) to be set aside and that of assessing officer be restored. On the other hand the Ld. Authorized Representative for assessee supported the order of CIT(A). 5. After going through rival submissions and material on record. We find that issue before us is of non - deduction of tax u/s 193....
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....f compliance of applicable accounting standards and mandatory requirements of Companies Act, 1956. It was, thus, clear no income had accrue to debenture holders, financial institutions. They have also not recognized any such income in their accounts. The entire liability has been finally waived off by them. The debenture holders have considered the investment in the debentures of assessee's companies and interest thereon as Non Performing Assets (NPA) and have not accounted for interest as there income of relevant order. Assessee has also not claimed interest provided in their account as deductable expenses. 5.1 Undisputedly no income has accrued to or has been received by then debenture holders under the provisions of the section 19....