Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2015 (6) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (6) TMI 759 - AT - Income TaxTDS u/s 194A - addition on account of factoring/discounting charges as no tax at source was deducted - assessee submitted that the factoring charges is not to be treated as interest and is not liable to be deducted at source u/s 194A - Held that:- In the instant case, the Assessing Officer had listed out the distinction between factoring and bill/invoicing discount. It was further held by the Assessing Officer that as per the terms of agreement entered between the assessee and GTF, the “discounting charges” mentioned therein is actually interest component on the loan. However, we notice that the Hon’ble Calcutta High Court in the case of CIT vs. M/s. MKJ Enterprises Limited (2014 (12) TMI 682 - CALCUTTA HIGH COURT) was specifically considering a case where factoring charges tantamount to interest and whether the tax is to be deducted at source on the same andheld that factoring charges were not interest and as such, provisions of TDS are not applicable. Factoring charges on sale cannot be termed as interest. In view of the Hon’ble Calcutta High Court judgment, we hold that the factoring charges will not come within the purview of section 2(28A) of the Income-tax Act, 1961 and as such, the provisions of TDS are not applicable on facts and circumstances of the case. - Decided in favour of assessee.
|