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2021 (1) TMI 318 - ITAT AHMEDABADTDS u/s 193 - Non-deduction of TDS on the interest expenses incurred on deep discount bonds - interest under section 201(1) and 201(1A) levied - CIT(A) deleted the demand raised by the AO by observing that the provisions of TDS under Section 193 of the Act with respect to deep discount bonds do not apply and same are subject to TDS under the provisions of Section 194 - CIT (A) held that there is no question of deducting TDS in the situation wherein the assessee has not claimed any expenditure on such deep discount bond - HELD THAT:- The provisions of “Chapter XVII, B Deduction at source” provides that person who is responsible for paying any income to a resident by way of interest, shall, at the time of credit of such income to the account of the payee or at the time of payment whichever is earlier, deduct tax at the rate prescribed under the law. If the assessee is not incurring any expense, the question of income in the hands of the payee does not arise. Accordingly, the provisions for deducting the TDS as provided under “Chapter XVII, B- Deduction at source” of the Act will not be attracted. Hence, if the contention of the learned AR is believed to be true then the question of TDS does not arise. There is no question for deducting the TDS on the interest expenses on the deep discount bond as alleged by the AO for the simple reason that the assessee has not claimed any interest expense. Hence the ground of appeal of the Revenue is dismissed.
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