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2015 (7) TMI 245 - AT - Income TaxNon deduction of TDS - interest paid to members - assessee is a co-operative society - Held that:- Following the decision of the co-ordinate bench of this Tribunal in the case of The Bagalkot District Central Co-operative Bank (2015 (1) TMI 1005 - ITAT BANGALORE), we hold that the assessee, which is a co-operative society carrying on the business of banking, need not deduct tax at source under Section 194A of the Act when it pays interest to a member both on time deposits and deposits other than time deposits kept with such co-operative society, by virtue of the exemption granted vide clause (v) of sub-section (3) of Section 194A of the Act. As submitted by the learned Departmental Representative and observed by the learned CIT (Appeals), it is not clear whether the entire interest in question relates to interest paid to members or whether a part of the interest is also paid to non-members. In this view of the matter, we uphold the decision of the learned CIT (Appeals) in directing the Assessing Officer to verify whether any portion of the interest in question relates to payments to non-members and to restrict the disallowance only to the extent of payment of interest to non-members without deduction of tax at source. -Decided against revenue.
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