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2019 (11) TMI 80 - AT - Income TaxTDS u/s 194H - Disallowance of bank guarantee charges for non deduction of TDS - principal - agent relationship - HELD THAT:- It is sine qua non that there has to be a principal - agent relationship for a payment to be treated as commission or brokerage. The recipient of the income must act on behalf of the principal. Here the banker does not act on behalf of the assessee for rendering any kind of service. The contract of guarantee does not give any rise to principal - agent relationship between the assessee and the bank and, therefore, the consideration received by the bank on account of guarantee commission cannot be reckoned as commission as contemplated under section 194H and accordingly, there was no requirement to deduct TDS on this payment. See CIT vs. JDS Apparels (P.) Ltd. [2014 (11) TMI 732 - DELHI HIGH COURT] , Kotak Securities Ltd. vs DCIT (2012 (2) TMI 77 - ITAT MUMBAI), DCIT vs PRL Projects & Infrastructure Ltd. (2017 (9) TMI 241 - ITAT DELHI), ACIT vs. Jaypee Infratech Ltd. (Supra) and DCIT vs. Lakshya Media (P.) (2016 (8) TMI 867 - ITAT MUMBAI) - Decided in favour of assessee.
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