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2021 (1) TMI 283 - AT - Income TaxTDS u/s 194A - Disallowance of interest expenditure incurred u/s 40(a)(ia) for non-deduction of TDS - It is the case of the assessee that he was under bonafide belief that Bajaj Finance Ltd. is a banking corporation and therefore TDS is not required to be deducted - HELD THAT:- In the backdrop of long line of judicial precedents including judgment of Hindustan Coco Cola Beverage Ltd.[2007 (8) TMI 12 - SUPREME COURT] we consider it expedient to set aside the disallowance and restore the issue to the file of the Assessing Officer. The assessee shall be entitled to produce such evidences as may be considered necessary to defend its case for non-deduction of TDS. AO shall be entitled to make such enquiry from the payee (Bajaj Finance Ltd.) as may be considered expedient to ascertain whether there is any loss of Revenue by such non-deduction. Assessing Officer shall delete the disallowance of amount carried out under s. 40(a)(ia) where it is found that the payee concerned has included the receipt obtained from the assessee for the purposes of computation of total income in its return. In other words, disallowance under s. 40(a)(ia) of the Act will not survive in the hands of assessee where deductee has also included the corresponding income in its return of income. The issue raised is restored back to the file of the Assessing Officer for fresh determination. Addition u/s 68 - Nature and source in respect of certain loans taken by assessee is not satisfactory - HELD THAT:- As decided in SMT. PK NOORJAHAN [1997 (1) TMI 6 - SUPREME COURT] Assessing Officer is not obliged to invoke Section 68/s. 69 of the Act in every case where the explanation offered is found to be 'unsatisfactory' in the opinion of the Assessing Officer. In view of the overriding fact that loans so obtained stood re-paid through banking channel without any real advantage to the assessee, the onus cast upon the assessee is substantially discharged in view of the observations of the Hon'ble Supreme Court. The action of Assessing Officer is thus set aside and the issue is restored back to the file of Assessing Officer in terms of directions noted above. Assessee appeal is allowed for statistical purposes.
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