2017 (11) TMI 1196

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... are related to the disallowance of Rs. 1,47,66,760 under section 40(a)(i) of the Income-tax Act (in short "the Act"). The assessee filed the return of income declaring a total loss of Rs. 14,77,46,128 on September 30, 2009. The assessment was completed on a total loss of Rs. 13,28,79,368. In the assessment proceedings the Assessing Officer made the addition of Rs. 1,47,66,716 under section 40(a)(i) of the Act for non-deduction of tax at source. 3. Aggrieved by the order of the Assessing Officer, the assessee went on appeal before the Commissioner of Income-tax and argued that the interest payment was made to the bank on behalf of M/s. Uniply Industry Ltd. and the TDS provisions are not applicable for payments made to the banks under sec....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....y. The payment was made by the assessee to the banks on the due dates of the term loan instalments to discharge the obligations of the Uniply and as part of purchase consideration. In a nutshell, it is submitted by the learned authorised representative that the assessee-company has made the payment to the bank on behalf of the Uniply Industries towards settlement of the term loan installments and the interest debited by the bank on the term loans granted to M/s. Uniply industries. Since the payment was made to the banks, the assessee contended that no TDS provisions are applicable. 4.1 The first argument of the assessee is that the payment of interest to the bank does not attract TDS. If the bank has given a loan to the assessee and the ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... the Unit Trust of India Act, 1963 (52 of 1963), or (e) any company or co-operative society carrying on the busi ness of insurance, or (f) such other institution, association or body or class of insti tutions, associations or bodies which the Central Government may, for reasons to be recorded in writing, notify in this behalf in the Offi cial Gazette ;" In the assessee's case, as on the date of payment there was no loan out standing against the assessee in Corporation Bank and Bank of India. The term loans were outstanding in the name of M/s. Uniply Industries Ltd., and the assessee has made the payments in either to the bank directly to M/s. Uniply Industries Ltd., towards the term loan installments of the bank loa....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....essee contended that even if it is presumed that there was no liability to the assessee to make the payment to the bank on due dates of term loans, the supplier of the machinery who has mortgaged the wind mills required to pay instalments which includes the interest. Since the assessee has taken the wind mills from M/s. Uniply Industries Ltd., it is obligation on the part of the assessee to make the payments since the ownership vests with the assessee-company by the memorandum of understanding. The SEPC has entered into the memorandum of understanding dated July 10, 2008 with M/s. Uniply Industries Ltd. for purchase of wind mills on behalf of its associates concern M/s. Clarion Wind Farm Pvt. Ltd. Though the memorandum of understanding ente....