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2022 (9) TMI 404 - AT - Income TaxTDS u/s 194A - liability to pay has been crystallized or not - Amount towards finance cost as interest accrued against Compulsory Convertible Debentures [CCDs] on which tax was not deducted - Default u/s. 201(1) & 201(1A) - assessee submitted before the AO that provision for interest is reversed at the beginning of the following year before the due date for remittance of TDS and there was no liability to be discharged before the due date of payment of TDS - CIT(Appeals) rejected the submissions of the assessee and proceeded to confirm the order of the AO - HELD THAT:- The coordinate Bench of the Tribunal in the case of Biocon Ltd. [2022 (4) TMI 795 - ITAT BANGALORE] has considered a scenario where no payment is required to be made and the entire amount of provision is reversed in the subsequent year and the applicability of TDS liability on the same. If the liability has not crystallized and no payment is required to be made against the provision, then there will be no liability to deduct tax at source against the provision made. We notice that the waiver letter that is submitted before us dated 9.10.2014 does not contain the details as to the period from when the interest cost is not chargeable and interest is kept in abeyance until when. We also see merit in the contention of the DR that the status of reversal and provision of interest in the subsequent financial year has to be substantiated factually. We remit this issue back to the AO with a direction to verify the reversal of the provision made as on 31.03.2012 and the status of liability to pay interest on the CCDs in subsequent periods and decide the allowability in the light of the decision in the case of Biocon Ltd. (supra). Appeal by the assessee is allowed for statistical purposes.
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