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2015 (9) TMI 181 - AT - Income TaxNon deduction of tds - assesses paid interest to KIADB - assessee had a belief that it was not liable to deduct tax since KIADB was exempt from tax, being registered under Section 12A - Assesee in default - Held that:- In the instant case, the assessee bank had taken term deposit from KIADB. The KIADB was entitled to interest on these term deposits. These interest incomes which have received by KIADB are not liable to be taxed in view of the Registration under Section 12AA enjoyed by KIADB. When the interest income is not liable for taxation, there is no obligation on the part of the assessee bank to make deduction of tax at source. Since the interest income was not liable to be taxed in the hands of the recipient, there is no obligation on the part of the assessees to deduct tax at source. However, since the Hon'ble High Court judgment in the case of CIT Vs. ITC Hotels Ltd. [2015 (8) TMI 987 - KARNATAKA HIGH COURT] is rendered subsequent to the order of the CIT (Appeals), the CIT (Appeals) did not have the benefit to peruse the same Restore the issue for de novo consideration to the file of the Assessing Officer. - Decided in favour of assessee for statistical purposes.
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