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2012 (2) TMI 77 - AT - Income TaxNon-deduction of tax at source from bank guarantee commission - stock broking business – bank guarantees furnished in lieu of margin deposits, to various agencies, such as BSE and NSE – Revenue contended that tax to be withhold u/s 194 – interest imposed u/s 201(1A) – Held that:- Principal agent relationship is a sine qua non for invoking the provisions of Section 194 H. While it is termed as 'guarantee commission', it is not in the nature of 'commission' as it is understood in common business parlance and in the context of the section 194H. This transaction, in our considered view, is not a transaction between principal and agent so as to attract the tax deduction requirements u/s 194H. As we have held that the assessee was not required to deduct tax at source u/s 194 H, the question of levy of interest u/s 201(1A) cannot arise – Decided in favor of assessee.
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