TaxTMI 
TaxTMI 
2016 (8) TMI 867
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....llowing the appeal of the assessee on the basis of reasoning of the processing fees and bank guarantee commission are not in nature of "managerial services" but "upfront interest" and no TDS was required to be deducted on such charges paid to banks u/s 194J of the I.T. Act, 1961. ii) On the facts and circumstances of the case and in law, the learned CIT(A) has erred in holding that TDS is not to be deducted at all under any section of the I.T. Act, 1961, on expenditure on the hoardings/display rights, which have been capitalized. iii) On the facts and circumstances of the case and in law, the learned CIT(A) has erred in deleting the interest u/s 201(1A) of the I.T. Act, 1961, determined by the AO as the tax determined has already been d....
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....he contention of the assessee firstly, that the processing fee paid to the Schedule Bank is in the nature of upfront interest and falls within the exclusion provided in section 194A(3); secondly, no tax is deductible under section 194J on such processing charges; thirdly, the 'guarantee fees' do not fall within the ambit of "commission" or "brokerage" as to entail TDS; and lastly, on the payment for advertising and hoardings the assessee had deducted TDS on some of the items but most of the items have been capitalized therefore, there is no requirement for TDS to be deducted on such capitalized expenses. The Ld. CIT(A) after considering the submission and material on record decided the first three payments in the favour of the assessee and ....
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....es borrowed. Thus, there was no requirement to deduct the TDS on account of rendering of managerial services. On the other hand, Ld. DR supported the order of the AO. 5. As regards the payment of "processing fee" paid to Nationalized Bank, we agree with the contention of Ld. Counsel that, "loan processing fee" is charged by the banks for processing the application when a borrower approached the bank for a loan. Such a service fee or charge it has been included in the definition of "interest", as given in section 2(28A) which reads as under:- "'interest' means interest payable in any manner in respect of any moneys borrowed or debt incurred (including a deposit, claim or other similar right or obligation) and includes any service fee or ot....
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.... paid which has been held to be liable for TDS under section 194H by the AO, we are unable to accept the contention of the AO, because the assessee has sought its banks like HDFC Bank, Dena Bank and Yes Bank to issue guarantee in its favour for which bank has charged certain amount as 'guarantee fee'. To fall within the ambit and scope of section 194H, the payment has to be in the nature of "commission or brokerage". The Explanation to section 194H defines the phrase 'commission and brokerage' in the following manner:- "'Commission or brokerage' includes any payment received or receivable, directly or indirectly, by a person acting on behalf of another person for services rendered (not being professional services) or for any services in th....