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2010 (4) TMI 722 - AT - Income TaxDemand - The AO was of the opinion that when interest accrued on loan was credited in the creditor’s account, the assessee was supposed to deduct tax at source within the meaning of provisions contained in Section 194A of the Act - It is not in dispute that the assessee has made entry of interest accrued on loan taken from M/s Haryana State Agriculture Marketing Board in its books of accounts - Therefore, the CIT(A)’s observation that the entry was made only for notional interest accrued on loan and Section 194A in that case would not be applicable, is not justified Whether there is no tax liability payable by the payee or the creditor in whose account interest was credited, a demand can now be raised u/s 201(1) against the assessee for failure to deduct tax at source - In this connection, a reference may be made to a decision of Hon’ble Supreme Court in the case of Hindustan Coca Cola Beverages (P) Ltd. vs CIT, (2007 -TMI - 1676) (SC) – It was held that Haryana State Agriculture Marketing Board has already discharged its liability, no demand as raised by the AO u/s 201(1) can now be imposed against the present assessee – Hence present appeals are disposed of
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