ACIT, NOIDA vs. M/S. JAYPEE GANGA INFRASTRUCTURE CORPORATION LTD., NOIDA

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ITA 5441/DEL/2015Status: DisposedITAT Delhi18 October 2017AY 2012-133 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that since the payment was on a principal-to-principal basis, there was no requirement for tax deduction at source. Following a previous precedent, the impugned order was upheld.

What were the facts?

The assessee paid bank guarantee commission to its bank without deducting tax at source. The Assessing Officer treated the assessee as being in default for non-deduction of tax under Section 194H.

What were the issues?

Whether bank guarantee commission paid to a bank is subject to TDS under Section 194H. Whether the payment was on a principal-to-principal basis, negating TDS obligations.

Which sections of the Income-tax Act were involved?

Section 194H

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCHES : A : NEW DELHI

Before: SHRI R.S. SYAL & SHRI H.S. SIDHU

For Appellant: Shri S.K. Bharadwaj, Advocate
For Respondent: Shri Arun Kumar Yadav, Sr. DR
Hearing: 18.10.2017Pronounced: 18.10.2017

ORDER PER R.S. SYAL, VP: This appeal by the Revenue is directed against the order passed by the ld. CIT(A) on 14.05.2015 in relation to the assessment year 2012-13.

2.

The only issue raised in this appeal is against the deletion of demand on account of payment of bank guarantee commission without deduction of tax at source.

3.

We have heard the rival submissions and perused the relevant material on record. The assessee paid bank guarantee commission to its bank without any deduction of tax at source. The Assessing Officer treated the assessee as an assessee in default for non-deduction of tax at source u/s 194H on the amount of bank guarantee commission paid without tax withholding. The ld. CIT(A) deleted the demand. It is seen that the assessee made payment to bank on principal to principal basis and, as such, there was no requirement of any deduction of tax at source.

The Delhi Bench of the Tribunal in Japyee Sports International Ltd. and Others (ITA No.4279 to 4281/Del/2015 etc.) vide its order dated 31.08.2017 has held that there is no requirement of deduction of tax at source on bank guarantee commission u/s 194H of the Act. Respectfully following the precedent, we uphold the impugned order.

4.

In the result, the appeal filed by the Revenue is dismissed.

The order pronounced in the open court on 18.10.2017.

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