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2018 (12) TMI 1462 - HC - Income TaxReopening of assessment - TDS u/s 194A - addition on account of Letter of Credit (LC) discount charges u/s 40(a)(ia) - Held that:- The assessee had opened LC in favour of its suppliers who had discounted the same with the bank. On account of early payment, the bank had deducted some amount which the assessee was liable to reimburse to its suppliers. Accordingly, the assessee had credited the suppliers’ account with the amount of bill discount charges and had debited the LC discount charge account. The amount credited to the suppliers’ account was in the nature of reimbursement of cost incurred by the supplier towards early discounting of the LC resulting into additional cost towards purchase of goods. Thus, the assessee has not made payment of interest to the bank or to the supplier and the amount credited to the suppliers’ account is towards reimbursement of expenses incurred by the suppliers. Commissioner (Appeals), therefore, was wholly justified in holding that the provisions of section 194A would not be attracted and consequently, the question of making any disallowance under section 40(a)(ia) would not arise and in deleting the disallowance. The Appellate Tribunal has not committed any infirmity in affirming the view adopted by the Commissioner (Appeals). No substantial question of law
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