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2017 (4) TMI 43 - AT - Income TaxApplicability of withholding tax on interest payment by the appellant to NOIDA - rectification of mistake - Held that:- The Hon’ble Allahabad High Court has considered decision of Hon’ble high Court in [2011 (2) TMI 1251 - Allahabad High Court ] based on which the ld CIT(A) has reversed the order, while deciding the issue of applicability of withholding tax on interest payment by the appellant to NOIDA. Hon'ble high Court has conclusively held that the decision in that particular case does not come to aid of the revenue as it was restricted to the issue as to whether NOIDA would be a local authority or not and did not deal with the issue of whether NOIDA is a corporation established by State Act. Hon High court has conclusively held that NOIDA is ‘corporation’ established Uttar Pradesh Industrial Area Development Act, 1976 and therefore it is entitled to exemption from deduction of tax at source u/s 194A of the Income Tax Act. Therefore, respectfully following the decision of Honourable high court in [2016 (5) TMI 570 - ALLAHABAD HIGH COURT], we hold that the order of the ld CIT(A) in challenge before us is not sustainable. Further as the matter has reached before Hon'ble Supreme Court for adjudication whether tax is required to be deducted on interest payments made by the banks to NOIDA, itself suggests that the issue was debatable and do not fall in the purview of provisions of section 154 of the Act under which the impugned order was passed by the ld CIT (A). On this count also the ld CIT(A) erred in reversing his order based on application of the Addl. CIT, TDS. Hence, we quash the order of the ld CIT (A).
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