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2015 (3) TMI 217 - AT - Income TaxInterest u/s 234B - shortfall in TDS deduction at the payer's end - shortfall in advance tax at assessee's end - Held that:- Admittedly, the fact remains that qua 'fee for technical services', the assessee's status is only that of a payee. The payer turns out to be its subsidiary company. We find that case law Madras Fertilisers Ltd. (1983 (9) TMI 74 - MADRAS High Court) holds that in case of TDS deduction, the payee concerned need not pay advance tax and interest u/s 234B of the Act. Their lordships have observed that in case interest is levied in such a payee's case; it would lead to double levy of interest qua the same income. Similarly, the hon'ble Delhi High Court Jacabs Civil Mitsubishi Corpn. case (2010 (8) TMI 37 - DELHI HIGH COURT) observes that in case of a payer-payee relationship, the payee concerned is not absolved from the tax liability in case of shortfall in TDS deduction. However, in such a case, interest liability u/s 234B cannot be fastened to the payee. Similar principle stands echoed by the full bench of hon'ble Uttarakhand High Court Maersk Co. Ltd. (2011 (4) TMI 886 - Uttarkhand High Court). Thus, the net conclusion which flows from the aforesaid case law is that a payee/deductee whose payments have already been subjected to TDS provisions cannot be held liable to pay consequential interest u/s 234B of the Act. - Decided in favour of assesse.
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