2020 (1) TMI 77

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.... assessee is a contractor and is engaged in the business of constructing highways, roads and commercial buildings for corporate sector etc. For the assessment year 2013-14 they have filed their return of income on 30/9/2013 declaring a total income of Rs. 10,51,41,070/-. During the course of assessment proceedings, learned Assessing Officer noticed that the assessee paid a bank guarantee commission amounting to Rs. 1,50,59,660/- till 31/12/2012, such payments were in the nature of those mentioned in NotificationNo. 56/2012 dt. 31/12/2012, not covered within the definition of interest under section 2 (28 A) of the Income Tax Act, 1961 (for short "the Act") and therefore exemption provided under section 194A (3 (iii) (a) of the Act is not app....

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....rXVII of the Act. CIT further observed that the issue of notification under section 197A (1F) of the Act of the Act, interalia, providing that tax under chapter XVII shall not be deducted from payments in the nature of bank guarantee to specified banks makes it obvious that the tax is required to be deducted under chapter XVII of the Act from the payments in the nature of bank guarantee commission, however, such payments made to the specified banks w.e.f. 1st January, 2013 shall not be liable for tax deduction in view of the notification issued under section 197A (1F) of the Act. On this premise he held that the tax was required to be deducted from the payment of bank guarantee commission/charges amounting to Rs. 1,50,59,663/- made till 31/....

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....h a finding of the authorities below. 7. We have gone through the record in the light of the submissions made on either side.It could be seen from the assessment order that while dealing with the issue of allowability of the bank guarantee commission, learned Assessing Officer held that on identical facts in assessee's own case for the assessment year 2011-12 an addition under section 40(a)(ia) of the Act was made and the same was confirmed by the Ld. CIT(A) in appeal. However the order dated 28/11/2018 in ITA No. 1517/del/2015 for the assessment year 2011-12 clearly shows that after following the orders of the Mumbai, Pune and Visakhapatnam benches of the Tribunal, a conclusion was reached by the Tribunal that in the absence of any prin....