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2014 (7) TMI 905 - AT - Income TaxJurisdiction of Order u/s 201(1)/201(1A) – Obligation to deduct TDS u/s 194A on interest accrued on deposits - Applicability of section 194A for site restoration fund - Interest has been credited by SBI on SRF a/c which has been opened by ONGC with it as per the provisions of section 33ABA - the nature of receipt is to be decided at the first instance - The interest accruing to SRF a/c is income of ONGC and the deeming provision as per third proviso to section 33ABA(1) of treating it as deposit is essentially application of income - ONGC is accounting for the interest in its P&L A/c and then claiming deduction of deposit which includes the interest accrued on SRF a/c - The deeming fiction contemplated in third proviso is for the purposes of section 33ABA only and cannot be extended beyond the purpose for which it has been inserted in section 33ABA. It is the nature of receipt being interest, which triggers the applicability of provisions of section 194A and if the assessee was claiming for no TDS then it should have obtained certificate u/s 197 for non-deduction/ at lower rate - The interest income does not loose its character merely because of the deeming provisions u/s 33ABA treating the accrued interest being treated as deposit - the nature of a receipt is to be decided at first instance; and secondly, this sub-section does not make the withdrawals chargeable to tax till the account is not closed - It is not the case of assessee that when withdrawal is made on closure of account, then also the amount withdrawn is to be subjected to TDS - this sub-section refers to entire credit balance lying in this account and not only the accrued interest - section 33ABA(5) brings to tax the amount which was earlier allowed as deduction. The deposits contemplated u/s 33ABA need not necessarily come from business of extraction or production of petroleum or natural gas because of the word used 'consisting' in sub-section (1) of section 33ABA - The deposits can be made from any other source of income also - no parity can be drawn between interest accruing to SRF a/c and the withdrawals made u/s 33ABA(5) which are assessable as business income - it cannot be held that interest accrued on SRF a/c was not chargeable to tax in the year of accrual – thus, the provisions of section 194A are not applicable – Decided against Revenue.
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