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2017 (2) TMI 801 - AT - Income TaxTDS u/s 194H - TDS liability on Processing Fees - Held that:- It is sine qua non that there has to be a principal – agent relationship for a payment to be treated as commission or brokerage. The recipient of the income must act on behalf of the principal. Here the banker does not act on behalf of the assessee for rendering any kind of service. The contract of guarantee does not give any rise to principal - agent relationship between the assessee and the bank and, therefore, the consideration received by the bank on account of guarantee commission cannot be reckoned as commission as contemplated under section 194H and accordingly, there was no requirement to deduct TDS on this payment. TDS u/s 194I - Addition with regard to payments made by the assessee for holding/display rights - Held that:- Definitely there is no requirement of deducting TDS under section 194I on such payment, because it does not fall within “rent”. Interest levied u/s. 201 (1A) - Held that:- There was no liability to deduct tax at source for the payment made on account of Processing Fees and Guarantee Commission, that there was no short deduction of tax with regard to payments made for holding/display rights by the assessee. So, the issue of levying interest would not survive. - Decided in favour of assessee
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