TMI Blog2015 (10) TMI 800X X X X Extracts X X X X X X X X Extracts X X X X ..... of tax from the payments made to certain customers debited in direct expenses under minor head "excess payment refund" - Held that:- It is crystal clear that from the plain reading of sec. 2(28A) of the Act that money paid in respect of amount borrowed or debt incurred, is interest payable in any manner. The definition of interest in Sec. 2(28A) after referring to the interest payable in any manner in respect of any moneys borrowed or debt incurred proceeds to include in the terms money borrowed or that incurred, deposits, claims and ‘other similar rights or obligations’ and further includes any service fees or other charges in respect of the money borrowed or debt incurred which would include deposit, claim or other similar rights or oblig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . For theAssessee By :- Sri M R Ranjit Karthikeyan For the Revenue By :- Smt Latha V Kumar, Jr DR ORDER PER CHANDRA POOJARI, AM: These appeals filed by the revenue are directed against the common order dated 7th Aug 2008 and its pertain to the AYs 2012-13 and 2013-14 respectively. The assessee filed Cross objections which were delayed by 50 days. 2 The assessee filed condonation petition seeking delay in filing the Cross Objections. 3 We have gone through the condonation petition. The reasons stated in the petition that there was no time to prepare the paper book and the requisite documents. We find that the reasons advanced in the affidavit cannot be find a reasonable cause. To condone the delay there must be a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... P Ltd. According to the AO, all the process of erection of lift fall under the clause (iii) of the explanation to sec. 194C and not as per the sub clause (e) of clause (iv) as claimed by the assessee. Accordingly, he considered the assessee liable for TDS u/s 194C of the Act and also considered the assessee in default u/s 201(1) of the Act. Further, the AO found that the assessee paid a total interest of ₹ 31,37,341/- out of which Rs. 8,23,250/- was paid to non residents on which TDS is deductible u/s 195 of the Act @ 30.9% and for the balance amount u/s 194 @ 10% which workout to ₹ 4,85,794/-. Accordingly, the AO considered the assessee in default u/s 201 and 201(1A) of the Act. Similar case in the next year 2013-14 also. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h is liable for TDS u/s 194A of the Act. 5.3 On appeal, the CIT(A) observed that the assessee is acting as an agent between the old customers and new customers. What the assessee is doing is passing on the sale consideration, including the excess amount received on sale of flats from new customers to old customers. The CIT(A) relied upon the decision of the Hon ble Bombay High Court in the case of CIT vs Tata Teleservices Ltd reported in 122 ITR 592, wherein it has been held that the excess amount received on transfer of right in a property is in the nature of a capital receipt, and therefore, held that the provisions of section 194A is not applicable in the transactions undertaken by the assessee. Accordingly the CIT(A) directed the AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the Kerala Apartment Ownership Act, 1983 and pleaded before us that the original owner relinquished the right over the flats for which they entered into agreement and it is a capital gain in the hands of the purchaser and it cannot be treated as interest payment; so as to attract section 194A of the Act. 8.1 Herein, we are not concerned with the nature of receipt in the hands of recipients. We are concerned with the nature of payment in the hands of the assessee only. In the present case, the assessee debited to the P L account as expenses under the head indirect expenses (shown as excess refund). Admittedly, in this case, the person who has entered into agreement with the assessee for purchase of flats has paid money to the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and further includes any service fees or other charges in respect of the money borrowed or debt incurred which would include deposit, claim or other similar rights or obligations as also in respect of any credit facility which has not been utilized. Thus, the statutory definition given u/s 2(28A) of the Act regards amounts which may not otherwise be regarded as interest, as interest for the purpose of statute. The definition of interest has been carried to the extent that even the amounts payable in transactions were money has not been borrowed and that has not been incurred, are brought within the scope of its definition, as in the case of service fees paid in respect of a credit facility which has not been utilized. Undisputedly, in th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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