ITO, NEW DELHI vs. SH. VIKAS VASUDEVA, NEW DELHI

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ITA 6525/DEL/2015Status: DisposedITAT Delhi30 August 2016AY 2012-137 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 the CIT(A) was correct in deleting the addition as no tax was liable to be deducted on interest paid to a banking concern, which falls under the exception provided in Section 194A(3)(iii) of the Income Tax Act. Therefore, the assessee was not liable for disallowance under Section 40(a)(ia).

What were the facts?

The Assessing Officer (AO) disallowed interest paid on a loan amounting to Rs. 35,06,062/- for non-deduction of TDS. The assessee claimed that no TDS was deductible on interest paid to a banking concern, citing an exception under Section 194A of the Income Tax Act. The CIT(A) deleted the addition.

What were the issues?

Whether interest paid on a loan to a banking concern is subject to TDS deduction under Section 194A, and consequently, whether disallowance under Section 40(a)(ia) is warranted for non-deduction.

Which sections of the Income-tax Act were involved?

Section 40(a)(ia),Section 194A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘SMC-3’, NEW DELHI

Before: SHRI H.S. SIDHU

For Appellant: Shri Vinod Kumar Goyal, Adv
For Respondent: DR Assessee by : Shri Vinod Kumar Goyal, Adv

per sub-section III of section 3 of 194A of I.T. Act. Therefore, the assessee is not liable to treat as defaulter as per proviso 40(a) of I.T. Act and A.O. was not justified in disallowing the interest payment to the bank without deduction tax. Accordingly, the addition made on account of non deduction of TDS on account of interest paid on loan from banking concern of Rs. 35,06,062/- was rightly deleted by the Ld. CIT(A), which does not need any interference on my part, hence, I uphold the same and accordingly, the ground raised by the Revenue stands dismissed.

9.

In the result, the appeal of the Revenue is dismissed.

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