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2018 (5) TMI 1794 - AT - Income TaxTDS u/s 194A - failure to deduct tax at source from the interest payments to its members and non-members - addition u/s. 40(a)(ia) - Held that:- AR placed heavy reliance on the judgments of the Jurisdictional High Court in the cases of Moolamattom Electricity Board Employees’ Cooperative Bank Ltd. & others [1998 (7) TMI 53 - KERALA HIGH COURT] and Thodupuzha Urban Co-operative Bank Ltd. and another [2003 (7) TMI 49 - KERALA HIGH COURT]. In these cases, it was an admitted fact that the assesses are co-operative societies. Hence, the Jurisdictional High Court came to the conclusion that sub-clause(a) of clause (viia) of sub-section (3) of section 194A was applicable. But in the present case, the assessee are not cooperative society but co-operative bank carrying on banking business with the approval of the Reserve Bank of India and as such, the assessee are not liable to deduct TDS under section 194A on the interest paid to its own members. On the other hand, the present assessee are liable to deduct TDS on the interest payments to its non members only. This ground of the appeals of the Revenue is partly allowed.
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