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2014 (11) TMI 281 - AT - Income TaxLevy of interest u/s 201(1) & 201(1A) – Held that:- Tax includes surcharge - non deduction of tax is equally applicable in respect of non deduction of tax on surcharge also - the CIT(A) is not justified in distinguishing the order of this Tribunal – assessee contended that the recipient of the amount has already paid the tax and surcharge – the contention needs to be examined as decided in Hindustan Coca Cola Beverage P Ltd vs [2007 (8) TMI 12 - SUPREME COURT OF INDIA] – thus, the matter is remitted back to the AO for verification as to whether the recipient of the amount has already paid taxes or not including surcharge – Decided in favour of assessee. Levy of penalty u/s 271C – Non-deduction of TDS on interest payment to partnership firm – Held that:- As decided in assessee’s own case for the earlier assessment year, it has been held that the assesees, being individuals, have paid interest to the partnership firm, in which they are partners - the belief entertained by the assessees that they were not liable to deduct tax at source on the interest paid by them to the partnership firm in which they are partners, can be considered as a “reasonable cause” in view of the legal position existing between a partner and the partnership firm - the explanation offered by the assessee fits in the category of “reasonable cause” in terms of sec.273B of the Act – thus, the order of the CIT(A) is set aside – Decided in favour of assessee.
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