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2018 (11) TMI 1485 - AT - Income TaxTDS u/s 194A - payment towards interest to Non-Banking Financial Corporation (NBFC) without deducting TDS - Held that:- The assessee company has made payment towards interest to Non-Banking Financial Corporation (NBFC) without deducting TDS thereon and the loans were raised in the name of the assessee’s company itself which was utilized for business purpose only. In dispute that the companies are well-known finance companies engaged in the business of financing and as such are financial institutions. It is the case of the assessee that interest was paid to well-known finance companies who are NBFCs except two companies. No doubt, the assessee has not filed detail of any such material if the recipient of interest in question accounted for the interest received in their account and paid due liabilities of the income-tax, but taking the contentions raised by assessee on its face value as all the companies except two are well-known NBFC, the issue in question is remanded back to the AO to verify the contentions raised by the assessee and in case, he is satisfied that the concerned NBFCs have included this income in computation of their income offered to tax, then it would be deemed to comply with the provisions contained u/s 40(a)(ia). In case NBFCs are found to have shown the interest received in their books of account and paid due liabilities of the income-tax for computation of income then no disallowance can be made u/s 40(a)(ia). Appeal filled by assessee is allowed for statistical purposes.
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