TMI Blog2014 (6) TMI 604X X X X Extracts X X X X X X X X Extracts X X X X ..... td. has given a confirmation that it had filed its return and has also paid the taxes –Relying upon Hindustan Coca Cola Beverage Pvt. Ltd. vs. CIT 2007 (8) TMI 12 - SUPREME COURT OF INDIA] - there was no justification for levy of demand u/s. 201(1) and 201(1A) of the Act - Revenue could not controvert the findings of CIT(A) by bringing any contrary material on record – thus, the order of the CIT(A) is upheld – Decided against Revenue. Imposition of Penalty u/s 271C of the Act – Held that:- CIT(A) rightly was of the view that the assessee had no chance to apply its mind and deduct tax at source, particularly when it had not made any payment or credited the amount at the relevant time - The amount was directly adjusted by Kotak Mahindra Lt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ducted. Assessee interalia submitted that the Assessee had obtained margin amount from Kotak Mahindra Ltd for making application in public issue of shares and the amount paid to Kotak Mahindra Ltd. was considered as cost of purchase of shares and not as interest. The submission of the Assessee was not found acceptable to the A.O. A.O was of the view that the Assessee was liable to deduct tax on the payment made to Kotak Mahindra Ltd under section 194A of the Act and since Assessee had failed to comply the provisions, A.O treated Assessee as assessee in default under section 201(1) read with section 221 of the Act. He further held that Assessee is liable for interest under section 201(1A) of the Act and worked out the interest at Rs. 80,14 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2007-08 by the A.O. even though the assessee had made payment to Kotak Mahindra Ltd. of Rs. 16,23,435/- but not deduct tax at source u/s. 194A of the IT Act. 5. Before us, ld. A.R. took us through the order of A.O and supported his order. On the other hand ld. A.R. reiterated the submissions made before CIT(A) and supported the order of CIT(A). 6. We have heard the rival submissions and perused the material on record. We find that CIT(A) while granting relief to the Assessee has given a finding that Assessee had not made payment to Kotak Mahindra Ltd. towards interest but the account of the Assessee was directly adjusted by the charges and Assessee had no control and therefore it could not deduct TDS. He has further noted that Kotak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore, no chance to apply its mind and deduct tax at source, particularly when it had not made any payment or credited the amount at the relevant time. The amount was directly adjusted by Kotak Mahindra Ltd. from appellant's account with them. In the circumstances, though tax was not deducted, it was not intentional default of the appellant. However, the said payee Kotak Mahindra Ltd. has already paid tax on the returned income. Considering all these aspects the appellant has reasonable cause for non deduction of tax at source. Accordingly, the penalty levied is cancelled. 9. Before us, ld. D.R. relied on the order of A.O and on the other hand ld. A.R. relied on the order of CIT(A). 10. We have heard the rival submissions a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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