TMI Blog2010 (4) TMI 722X X X X Extracts X X X X X X X X Extracts X X X X ..... ity payable by the payee or the creditor in whose account interest was credited, a demand can now be raised u/s 201(1) against the assessee for failure to deduct tax at source - In this connection, a reference may be made to a decision of Hon’ble Supreme Court in the case of Hindustan Coca Cola Beverages (P) Ltd. vs CIT, (2007 -TMI - 1676) (SC) – It was held that Haryana State Agriculture Marketing Board has already discharged its liability, no demand as raised by the AO u/s 201(1) can now be imposed against the present assessee – Hence present appeals are disposed of - ITA Nos. 1005 & 1006/Delhi of 2009 - - - Dated:- 29-4-2010 - G.E. VEERABHADRAPPA VICE PRESIDENT C.L. SETHI JUDICIAL MEMBER Appellant by: Shri Surender Pal Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh not a acceptable fact) revenue is deprived of utilization of this account from the date of its deduction to the date of issue of refund. This loss of revenue, however, gets compensated only through the levy of interest u/s 201(1A) of the I.T. Act. 4. We have heard both the parties and have perused the material on record. In these two years, the AO has passed the order u/s 201(1) and 201(1A) by holding that the assessee has failed to deduct tax at source on the interest accrued on loan taken from Haryana State Agriculture Marketing Board, Panchkula. In the financial year 2005-06 relevant to the Asstt. Year 2006-07, the AO has noted the following entries made by the assessee in its books: Loan from Boards : O.B. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ----------------- (b) Assessment Year 2007-08: Demand u/s 201 of the I.T. Act, 1961 As envisaged u/s 194-A of the I.T. Act, 1961 Rs.50,03,923/- On the payment of interest amounting to Rs. 2,22,99,125/- Interest u/s 201(1A) of the I.T. Act, 1961 Rs.8,00,624/- For the period of delay from 1.4.2007 to 07/2008 ------------------ Rs.58,04,547/- ----------------- 6. On appeal, the ld. CIT (A) cancelled the AO s ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovided under Explanation thereto that even if interest is credited in Interest Payable Account , Suspense Account or by any other name, entered in the books of accounts, the person liable to pay interest shall be covered by Section 194A of the Act. Therefore, mere because the interest was not received by Haryana State Agriculture Marketing Board, and when assessee made a provision of interest in its account, in the account of the creditor, the provisions of Section 194A stand applicable when the amount was credited either in the suspense account or interest payable account or by any other name. Therefore, the CIT(A) s observation that the entry was made only for notional interest accrued on loan and Section 194A in that case would not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (2008), 114 ITD 181 (Bang) besides some other decisions. 10. In this case, it has been claimed by the assessee that deductee, namely, Haryana State Agriculture Marketing Board has already discharged its liability, no demand as raised by the AO u/s 201(1) can now be imposed against the present assessee. In the light of the decision of Hon ble Supreme Court in the case of Hindustan Coca Cola Beverages (P) Ltd. vs CIT (supra), we agree with the contention of the assessee that no demand visualized u/s 201(1) should be enforced after the tax deductor has satisfied the AO(TDS) that tax due have been paid by the deductee. However, this will not alter the liability to charge tax u/s 201(1A) till the date of payment of taxes by the deductee or ..... X X X X Extracts X X X X X X X X Extracts X X X X
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