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2019 (4) TMI 1233 - HC - Income TaxTDS u/s 193 - non deduction of tax on the interest paid to debenture holders - default u/s 201(1) - assessee was a sick company and was before BIFR - HELD THAT:- The assessee had issued convertible debentures to Banks and Financial Institutions, however, soon thereafter the assessee-company went sick and was before BIFR. No interest was paid on such debentures under such circumstances.The assessee to comply with the legal requirements, had credited such interest in the accounts of the debenture holders. Revenue may be correct in pointing out that the requirement of deducting TDS may arise even in a case where such interest is credited in the accounts of the creditor. However, in the peculiar facts of the present case such requirement cannot be stretched to unreasonable levels. The debenture holders never claimed interest. The assessee could never pay the interest. The assessee was a sick industrial unit. Its case was before BIFR. The entries crediting the interest had to be made to comply with the mandatory requirements of law. On the principle of real income theory also the order of Commissioner (Appeals) and the Tribunal can be supported. Appeal dismissed.
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