Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2017 (3) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (3) TMI 1838 - AT - Income TaxTDS u/s 194A - interest paid to non banking financial company - non deduction of TDS - Revenue has claimed that as per the definition of interest provided under the act u/s 2 (28A), the amount qualifies as interest and was thus liable for deduction of tax at source, which having not been deducted - HELD THAT:- Counsel himself has stated that for the intervening period, when the amount was advanced by MMFSL to Mahindra and Mahindra Ltd. on behalf of the assessee and the amount was actually paid by the assessee to MM FSL on sale of the vehicles, the said charges were recovered by MMFSL from the assessee. Clearly these charges were recovered for the credit facility which was given by MMFSL to the assessee by way of making payment on account of the vehicles billed to the assessee by Mahindra and Mahindra Ltd on behalf of the assessee till the assessee sold the vehicles ,collected the amounts due on them and paid them to MMFSL. Assessee has not been able to demonstrate before us to how the same was not a fee or charge in respect of credit facility availed by it from MMFSL. In view of the same the amount paid to MMFSL, we hold, was in nature of interest as defined under section 2 (28A) of the Act, which clearly states that interest includes any service, fee or other charge in respect of monies borrowed or debt incurred or in respect of any credit facility which has not been utilised. The assessee having not deducted tax at source on the same has contravened the provisions of section 194A of the Act and therefore the expenditure did not qualify for deduction as per the provisions of section 40(a)(ia) of the Act. We have therefore no hesitation in upholding the order of the Ld. CIT(Appeals) and confirming the disallowance made of interest expenditure on which no tax was deducted at source under section 194A . Disallowance of advertisement and publicity expenses under section 40(a)(ia) on account of non-deduction of tax at source on the same - HELD THAT:- The fact that the payment was made on account of purchase of XYLO kits is not disputed. Merely because the bill date and date of making payment is different or for the reason that the figure mentioned in the bill and the amount of actual payment made do not tally the contention of the assessee cannot be rejected. Nor can it be said that the assessee has failed to substantiate its claim. There is nothing untoward or unusual in making payments after the bills are raised or for that matter payments made not tallying actually with the amount raised in the bills. The fact remains that the assessee had make payments on account of purchase of XYLO kits, which has remained unrebutted before us. On account of this fact are we find merit in the contention of assessee that the payment made did not qualify as advertisement and publicity expenses and therefore there was no need to deduct tax at source on the same . In view of the same the disallowance made under section 40 (a) (ia) on account of payment made. As for the payments made to M/s Sample enterprises and M/s Ad Vintage Communication it is not disputed that the payment credited at one time into the account of the above parties exceeded ₹ 20,000/-. The assessee was therefore clearly liable for deduction of tax at source under section 194C - Expenses incurred on account of the same are liable to be disallowed under section 40(a)(ia) - Decided partly in favour of assessee.
|