2018 (1) TMI 801

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....8A) of the Income Tax Act, 1961 as the same are covered under the definition of Interest. 2. The NOTIFICATION NO. 56/2012 [F. NO. 275/53/2012-IT(B)], issued by the CBDT giving relief to the assessee is binding upon the AO as the assessment is done on 21.03.2014 which is the date of Order u/s143(3) of the IT Act,1961 as the notification is applied prospectively. The CIT (Appeals) has gone wrong in appreciating the facts of the case while dealing with the notification. 3. The assessee was under bonafide belief that the charges paid to the Bank are covered u/s 2(28A) of the Act and are there is no requirement to deduct TDS on the said and hence the disallowance made by the AO is wrong. 4. The assessee reserves to raise any additional ....

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.... 'As per Schedule 7 of the balance sheet bank charges and interest amounts to Rs. 11.20 lakhs, the break-up of which is as follows. a) bank charges Rs. 74,430.20 b) bank guarantee commission Rs. 3,42,292.00 c) interest paid on advance Rs. 7,03,338.00 In its reply dt. 21.3.2014, the assessee further submitted that: 'the amount of bank guarantee commission has been paid to scheduled bank i.e. Bank of Baroda. Now because of Notification no.56/2012 dt. 31.3.2012, no deduction of tax at source has been done. The above amount was treated as payment made towards interest charges including bank commission.' The Ld. AO after considering the reply filed was of the opinion that certain items listed along with bank charges by assessee ....

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....he only issue involved in this appeal is whether TDS is to be deducted on payments made to bank towards bank charges and bank guarantee commission. 3.1. On perusal of the decisions of this Tribunal it is observed that in all the decisions reliance has been placed on Notification No. S03069 (E) NO. 56/2012 (F.NO. 27-section 197A of the Income Tax Act dated 31/12/12). For the sake of convenience the same is reproduced hereunder: "S03069 (E) NO. 56/2012 (F.NO. 27-section 190 7A of the Income Tax Act... Section 197A of the Income Tax Act, 1961: Deduction of tax at source - No deduction in certain cases - specified payment u/s 197A(1F) Notification no. SO 3069(E) (No.56/2012 (F.No.275/53/2012-IT(B), dt. 31.12.2012 (....

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.... this Tribunal observed as under: "23. The next issue that came up for our consideration is disallowance of bank guarantee charges under the provisions of section 40(a)(ia) of the Act for non-deduction of TDS u/s 194H of the Act. The Ld. A.R. for the assessee, at the time of hearing submitted that this issue is covered by the decision of ITAT, Visakhapatnam in assessee's own case for the assessment year 2009-10 and submitted that the coordinate bench of this Tribunal, under similar circumstances deleted the additions made by the A.O. We find that the coordinate bench of this Tribunal in ITA No.205/Vizag/2013 for the assessment year 2009-10 by following the decision of ITAT Mumbai in the case of Kotak Securities Ltd. Vs. DCIT (2....