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2014 (4) TMI 110 - AT - Income TaxDisallowance u/s 40(a)(ia) – Non deduction of Tax at Source (TDS) u/s 194A on interest paid to M/s Konkan Railway Corporation Ltd., on mobilisation advance - Held that:- When interest on mobilisation advance was recovered by contractee from running bills before releasing contract charges to assessee, cannot be said that assessee has credited interest paid or payable to account of assessee - Cannot be said that there is any violation of provisions of section 194A of Act - Liability cannot be fastened on assessee or a default cannot be attributed to assessee for not discharging an obligation which is impossible on its part to perform. Decision of High Court in case of Viswapriya Financial Services and Securities Ltd., vs. CIT [2002 (10) TMI 88 - MADRAS High Court] is also not applicable to facts of present case as in that case assessee actually made payment but did not treat it as interest - Do not find any infirmity in order of CIT(A). Further, perusal of Notification Number SO No.3489 dated 22-10-1970 makes it clear that provisions of section 194A of Act are not applicable to interest paid to company whose shares are held by either Central or State Government - Provisions of section 194A of Act will not apply to said company in view of Notification in S O No.3489 dated 22-10-1970 - Interest payment to such company is outside purview of section 194A and consequently no disallowance can be made by applying provisions of section 40(a)(ia) of Act - Decided against Revenue.
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