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D.D. Township Limited, New Delhi. C/o. Shri Manu Monga Versus The Income Tax Officer Ward 49 (4) , New Delhi

2017 (12) TMI 534 - ITAT DELHI

TDS u/s 194A - non deduction of tds on interest payment - assessee-in-default under section 201(1) - as per assessee TDS is not made as the amount involved is only surrender of interest to these concerns - interest liability calculation under section 201(1A) - Held that:- A.O. has given details at page-4 of the order in which the amount of interest paid and taxed under section 201(1) on interest paid and then interest liability is calculated. No infirmity have been pointed out in the order of th .....

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be paid from the date on which the tax was chargeable till the date on which tax is actually paid. Even if recipient has paid the tax, for the short fall, the interest shall have to be paid by the assessee. Thus interest in question is chargeable. The assessee has failed to produce any details before the authorities below as well as before the Tribunal to point out any error in the computation of tax liability under section 201(1A) by the A.O. Therefore, in the absence of any evidence on record, .....

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2009-2010, challenging the charging of interest of ₹ 28,92,314 under section 201(1A) of the I.T. Act, 1961. 2. The A.O. observed that assessee paid interest to M/s. Indiabulls Financial Services Ltd., and S.E. Investment Ltd., during F.Y. 2008-2009 without making any TDS as per Section 201(1) read with section 194A of the I.T. Act, 1961. The A.O. also rejected the statement of the assessee that TDS is not made as the amount involved is only surrender of interest to these concerns. Based o .....

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. Act. The A.O. rejected the contention of the assessee. The A.O. noted that as the assessee failed to deduct TDS but surrender the expenditure on account of interest paid to these concerns in its taxable income, interest liability under section 201(1A) is calculated as per the details mentioned in page-4 of the assessment order up to the date of filing of the return filed by the said two companies. The A.O. accordingly, calculated the interest liability payable by assessee under section 201(1A) .....

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paid to the Revenue department. It is immaterial whether the tax is paid by the deductee or the assessee who had made the deduction. What is significant is that the interest which is compensatory in nature is paid to the Revenue department till the date the amount of tax is actually deposited. The Ld. CIT(A), however, confirmed the levy of interest and dismissed this ground of appeal of assessee. His findings in para 5.3 of the order is reproduced as under: 5.3. The reason given by AO and submis .....

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erve the purpose of TDS provisions and the appellant cannot take a plea not to make TDS which is mandatory. The appellant failed to produce any letter from the competent authority that the appellant need not make any TDS as the payee has paid advance tax including the particular transaction in the return of income. As mentioned by AO, the judicial pronouncements cited by the appellant do not take away the mandatory nature of TDS provision and consequential levy of interest on failure to do so. I .....

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that assessee has lost details. Therefore, assessee cannot file the details as to on which date tax have been paid by the recipient. He has submitted that this can be verified from the record of the A.O. 5. On the other hand, Ld. D.R. relied upon the orders of the authorities below and submitted that even if recipient have paid the tax but interest is mandatory in nature under section 201(1A) of the I.T. Act, 1961, which have been correctly charged by the department. The Ld. D.R. relied upon th .....

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he tax was actually paid. The provisions for payment of interest are mandatory and automatic and interest has to be paid from the date on which the tax was deductible till the date on which the tax is actually paid. If the tax has already been paid by the recipient on such income the Income Tax Department may not be justified to recover the said amount of tax, but so far as the liability of interest is concerned, that cannot be considered to be non7 existent on account of deposit of tax by the r .....

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is directory or mandatory in nature, but the context in which expression shall is used in section 201(A) makes it clear that the levy is mandatory. The purpose of the levy is to claim compensation on the amount which ought to have been deducted and deposited and has not been done. The ultimate liability for tax being not there (since the firm which received the interest from the assessee had paid tax on such interest) did not dilute the requirements for the non-compliance of which interest is le .....

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id commission and perquisites apart from salaries. The assessee did not furnish the quantum of commission and perquisites enjoyed by those employees in the annual return and tax had not been deducted at source as was required under section 192 of the Act on the quantum of commission and perquisites. Accordingly, various amounts were levied as interest under section 201(1A). The Tribunal cancelled the levy. On a references : Held, that the levy of interest was justified. 5.4. The Ld. D.R. submitt .....

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