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2016 (8) TMI 1129 - AT - Income TaxTDS u/s 194A - Disallowance on account of interest paid to non-banking Finance (NBFC) company for non deduction of tds - assessee submitted form No. 26A prescribed under rule 31ACB issued by the NBFC companies stating that in respect of income received from assessee the same is included in their taxable income and thereby erred in not following provisions of law (S.201 of I.T. Act., 1961) - Held that:- The Hon’ble Supreme Court in Hindustan Coca Cola Beverage Pvt. Ltd (supra) has held that where deductee, recipient of income, has already paid taxes on amount received from deductor, department once again cannot recover tax from deductor on same income by treating deductor to be assessee-in-default for shortfall in its amount of tax deducted at source. We draw support from the judgement of Hon’ble Supreme Court in the matter of CIT vs. Vegetable Products Ltd. (1973 (1) TMI 1 - SUPREME Court ) wherein the Hon’ble Supreme Court has laid down the principle that “ïf two reasonable constructions of a taxing provisions are possible, that construction which favours the assessee must be adopted.” In view of the above discussions, we remit the matter to the file of the AO for limited verification of Form No. 26A prescribed under Rule 31ACB on the aspect as to whether recipient of payment has included the same in their computation of business income offered to tax and, if found to be so, delete the disallowance in question. With these directions, the matter stands restored to the file of the Assessing Officer. - Decided in favour of assessee for statistical purposes.
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