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2013 (1) TMI 597 - AT - Income TaxTDS u/s 194A – Rate of TDS - Whether tax has to be deducted as the rate in force in quarterly basis where the interest is payable on 31st March every year and compounded with quarterly rest – After amendment the deduction for interest payable u/s 194A at the rate of 10% w.e.f. 1/10/2009 as against 20% before the said date - Assessee company had moved application u/s 154 seeking rectification as the A.O. had computed the tax deductible in terms of the rates that were in force before 1/10/2010 and had not considered the rates in force as per the amendment made by Finance Act, 2009 Held that:- Merely because the interest is compounded quarterly does not mean that the interest is payable on quarterly basis. The interest was accruing quarterly and therefore, the tax has to be deducted as the rate in force in quarterly basis, is not correct. The interest on ICD was payable on 31st March, although the interest was compounded with quarterly rests It can be seen from the ledger account that the assessee company had credited the interest payable on the ICD only on 31st March, 2010; thus the claim of the assessee company that it was liable to deduct tax at source at the rate of 10%, which was the rate in force on the date of credit to the account of the payee. The liability of the assessee to deduct tax at source with reference to the interest payment is only at the rate of 10%. In favour of assessee Delay in payment of TDS – Interest u/s 201(1) – Held that:- Following the decision in case of Hindustan Coca Cola Beverage Pvt. Ltd (2007 (8) TMI 12 - SUPREME COURT OF INDIA) that assessee cannot be made liable u/s 201(1), since the payee had disclosed the interest income in its return of income - In favour of assessee
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