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2017 (11) TMI 1196 - ITAT CHENNAITDS u/s 194A - interest payment was made to the bank - non deduction of tds - Held that:- In the assessee's case, as on the date of payment there was no loan out standing against the assessee in Corporation Bank and Bank of India. The term loans were outstanding in the name of M/s. Uniply Industries Ltd., and the assessee has made the payments in either to the bank directly to M/s. Uniply Industries Ltd., towards the term loan installments of the bank loans which was inclusive of interest. Since the bank loan was not given to the assessee and no loan was outstanding against the assessee, the asses see is not covered by the exception in section 194A and the same is not tenable. Payment to the bank was a reimbursement of bank interest in which case also the provisions of TDS 194A is not applicable - Held that:- Since the assessee has taken the wind mills from M/s. Uniply Industries Ltd., it is obligation on the part of the assessee to make the payments since the ownership vests with the assessee-company by the memorandum of understanding. The SEPC has entered into the memorandum of understanding dated July 10, 2008 with M/s. Uniply Industries Ltd. for purchase of wind mills on behalf of its associates concern M/s. Clarion Wind Farm Pvt. Ltd. Though the memorandum of understanding entered with M/s. SEPCL and M/s. Uniply Industries Ltd., there were no purchase agreements documents between SEPC/Uniply Industries and the assessee-company. The assessee has not submitted the documents related to the registration of the wind mills in the name of the assessee-company. For a query from the Bench, the learned authorised representative accepted that the sale of wind mills, attracts sales tax but no sales tax assessment or payment details have been furnished by the assessee. No evidence has been furnished with regard to not claiming the interest by M/s. Uniply. These issues were not verified with the Assessing Officer. Unless the assessee establishes that the assessee has purchased the wind mills from M/s. Uniply Industries Ltd. and the documentation relating to transfer of property to the assessee have been completed and registered before the end of the financial year, the question reimbursement of expenses and the interest expenditure does not arise. Therefore, we set aside the orders of the lower authorities and remit the matter back to the file of the Assessing Officer to verify the facts
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