2018 (7) TMI 228

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....iety registered under the Karnataka Cooperative Society Act, 1959, It is engaged in the business of banking, with permission from the RBI, dt.15.12.2011, to do business of banking in the name and style of Bellary District Cooperative Central Bank Ltd. During the year under consideration, the assessee claimed Rs. 26,42,47,278/- as total expenses towards interest payment. Out of the said amount the assessee made a payment of Rs. 6,26,99,189/-, which was above the statutory limit of Rs. 10,000/-. It was the case of the AO that the assessee was required to deduct the tax at the time of making the said interest payment. However the assessee relied on the order of the Tribunal rendered in the case of The Bagalkot District Central Co-op. Bank v. J....

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.... Bank (supra) and it was the case of the AO that the Revenue is in appeal before the Hon'ble jurisdictional High Court on the said matter. However, we notice that the appeal of the Revenue in the matter of The Bagalkot District Central Co-op. Bank (supra) was decided by the Division Bench vide its judgment dt.16.12.2015, which was aptly mentioned by the jurisdictional High Court in the matter of Sri Basaveswara Sahakari Bank Ltd (supra) in para 5, to the following effect : 5. The first question is answered at para 2 as follows:- "2. .................. The point is squarely covered by a Division Bench judgment of this Court in ITA No. 100116/2014 between the Commissioner of Income Tax and another v. The Bagalkot District Central ....

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....Income Tax and another v. The Ilkal Co-Operative Bank Ltd., The Coordinate Bench in the said case has held as below: "In this appeal by the Revenue, the issue involved is for consideration whether the Co-operative Bank was required to deduct tax while paying interest to its members on time deposits under Section 194-A of the Income Tax Act." 2. The Ministry of Finance, Government of India vide Circular No.19/2015 in F.No.142/14/2015-TPL, has held that the Co- operative Banks are not required to deduct tax at source on time deposits of its members paid or credited on or before 1.6.2015. The relevant portion of the circular reads as under: "42.5 In view of this, the provisions of the section 194A(3)(v) of the Income....