TaxTMI 
TaxTMI 
TaxTMI 
2017 (5) TMI 481
X X X X Extracts X X X X
X X X X Extracts X X X X
....come Tax Act, 1961 (in short 'the Act') on 06.08.2013 the Assessing Officer (AO) required the assessee to explain (i) as to why tax was not deducted at source on expenses/payments incurred on account of bank guarantee commission and (ii) as to why it failed to deduct tax at source on payments on account of technical/professional services as per the provisions of section 194J of the Act. The AO, after considering the assessee's explanation that TDS is not required to be made on such payments, was of the opinion that (i) bank guarantee charges are in the nature of commission payments and therefore tax ought to be deducted thereon in accordance with the provisions of section 194H of the Act and (ii) tax was required to be deducted unde....
X X X X Extracts X X X X
X X X X Extracts X X X X
....reasoning that bank guarantee commission is not in the nature of 'Commission' and no TDS was required to be deducted on such charges paid to bank u/s 194H of the I.T. Act, 1961." ii) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in holding that no TDS was required to be deducted on bank guarantee commission paid to banks u/s 194H of the I.T. Act, 1961, failing to appreciate that in substance and in fact the relationship between the assessee company and banks was in the nature of principal and agents relationship and the payment made to banks for services rendered falls within the meaning of section 194H of the Act." 2. The appellant craves leave to amend or alter any ground or add a new grou....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n ITA No. 3920/Mum/2014. In its order in assessee's own case for A.Y. 2011-12 in ITA No. 5241/Mum/2014 dated 20.07.2016, the Coordinate Bench considered the issue and held ass under at paras 2 to 4 thereof: - "2. The brief facts of the case are that the survey operation u/s.133A of the Income Tax Act, 1961( in short "the Act") was conducted on 16.03.2012 at the premises of assessee company M/s. Infrastructure Leasing & Financial Services Ltd. The assessee company is a holding company of all companies of IL & FS group. The Principle business comprises of investments in group companies granting of loans and advances only to group companies and managing its own business centre. During the course of survey, statement of Mr. S. Srinivas, Vice P....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ble on bank guarantee and accordingly the interest is also required to be payable u/s.201(1A) of the Act. In appeal the learned CIT(A) has deleted the addition in view of the case of M/s. Kotak Securities Ltd. (Supra). It is specifically held that no TDS is payable on bank guarantee charges u/s. 194H of the Act. Therefore, the same is not liable to be deducted. Accordingly, the learned CIT(A) deleted the said addition. This issue has further came into existence in the assessee's own case for the A.Y.2010-11. The Hon'ble Income Tax Appellate Tribunal, while deciding the matter in the assessee's own case in ITA No.3920/Mum/2014 has also decided the issue in favour of the assessee on relying the case decided by the Hon'ble Tribunal M/s. Kotak ....