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M/s Council for Citrus and Agri Juicing in Punjab, Chandigarh Versus Commissioner of Income Tax (TDS) And Another

Non deduction of TDS u/s 194A - Loan amount raised from the State Government and the interest payable to the Government - whether the issue is covered under Section 196(i) of the Act? - Held that:- The assessee was unable to show from the perusal of Annexures A-4 and A-5 appended along with the appeal that the payment of interest was made to the Government except to repeat that the corpus fund was created by the Government from which the loan was advanced to the appellant. A perusal of Annexure .....

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t and would fall under Section 196(i) of the Act. - Decided against assessee. - ITA No. 338 of 2015 (O&M) - Dated:- 9-10-2015 - Ajay Kumar Mittal And Ramendra Jain, JJ. For the Appellant : Mr. Vishal Gupta, Advocate JUDGMENT Ajay Kumar Mittal, J. 1. This appeal has been preferred by the assessee under Section 260A of the Income Tax Act, 1961 (in short the Act ) against the order dated 17.3.2015 (Annexure A-3) passed by the Income Tax Appellate Tribunal, Amritsar Bench, Amritsar (hereinafter refe .....

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dismissing the appeal of the assessee on the ground that no evidence has been produced on record that the loan amount belongs to the State Government and neither the interest nor the principal has ever been paid by the appellant? 2. A few facts necessary for adjudication of the instant appeal as narrated therein may be noticed. The Income Tax Officer (TDS)-II, Chandigarh has received information that the assessee has neither deducted or short deducted tax at source under Sections 194A, 194C, 19 .....

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emand of ₹ 13,64,006/- including interest. Feeling aggrieved, the assessee filed an appeal before the Commissioner of Income Tax (Appeals) [for brevity the CIT(A) ]. The CIT(A) vide order dated 8.11.2013 (Annexure A-2) partly allowed the appeal. Still dissatisfied, the assessee challenged the orders, Annexures A-1 and A-2 before the Tribunal, who vide order dated 17.3.2015 (Annexure A-3) upheld the order of the CIT(A) and dismissed the appeal. Hence, the present appeal. 3. Learned counsel .....

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ing learned counsel for the appellant-assessee, we do not find any merit in the appeal. 5. Section 196(i) of the Act reads as under:- 196. Notwithstanding anything contained in the foregoing provisions of this Chapter, no deduction of tax shall be made by any person from any sums payable to- (i) the Government, or (ii) to (iv) XX XX XX where such sum is payable to it by way of interest or dividend in respect of any securities or shares owned by it or in which it has full beneficial interest, or .....

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r vide order dated 27.3.2012 (Annexure A-1) created a total demand of ₹ 13,64,006/- including ₹ 9,21,626/- for short deduction of tax at source under Section 201(1) of the Act and ₹ 4,42,380/- on account of interest under Section 201(1A) of the Act. The CIT(A) recorded that the assessee had made a provision for the interest of ₹ 48 lacs in its books of account where no TDS was deducted even after the financial year was over. It was also recorded that the Punjab Agro Indus .....

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matter back to the Assessing Officer for determination of rate of TDS application, i.e. @ 10.30% or 11.33%. The relevant findings recorded by the Tribunal read thus:- 8. We have heard the rival contentions and perused the facts of the case. There is no documentary evidence placed on record by the ld. counsel for the assessee that the loan has been raised from the Government and interest is payable to the Government and therefore, the submission made before the ld. CIT(A) and before us cannot hel .....

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the Punjab Agro Food Grains Corporation Limited has provided loan/funds of ₹ 6 crores to the assessee on which no interest was ever paid by the assessee. It has also been submitted that the assessee has also not provided any interest on the loan of ₹ 6 crores in the books of account/balance sheet. When asked the assessee to substantiate its claim, it has been fairly conceded by the Ld. ARs of the assessee that the assessee has provided for the interest of ₹ 48 lakhs in the boo .....

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ong with interest in the case of the assessee for not deducting TDS as per provisions of section 194 of the Act. In the result, ground of appeal no.2 taken by the assessee is dismissed. 9. In the facts and circumstances of the case, we find no infirmity in the order of the ld. CIT(A), who has rightly held the assessee in default u/s 201(1) and 201 (1A) of the Act. We find no infirmity in the order of the ld. CIT(A) subject to the rate of interest which the assessee in ground No.3 has agitated sh .....

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