Larsen & Toubro Ltd (E& C Division), ... vs Department Of Income Tax
- CitationITA No.7630/MUM/2013
Ratio decidendi
The rule this decision rests on
The ratio rests on a single line of reasoning: where the Revenue does not controvert the assessee's reliance on a decision of the same Tribunal on an identical question, and no contrary decision is brought to the Bench's notice, the Bench follows that earlier decision and sustains the relief granted by the first appellate authority. On the authority of that decision, bank guarantee charges paid by the assessee to a bank, where the bank issues the guarantee on the assessee's behalf, do not attract tax deduction at source under section 194H, because no principal-agent relationship exists between the bank and the assessee; consequently, levy of interest under section 201(1A) consequential to that TDS default falls with it.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
आयकर अपील य अ धकरण, मुंबई IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES "A" MUMBAI सव ी आय.पी. बंसल, या यक सद य एवं ी राजे , लेखा सद य BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND
SHRI RAJENDRA, ACCOUNTANT MEMBER आयकर अपील सं. / ITA No.7630/MUM/2013 नधा रण वष /Assessment Year 2010-11 Dy.Commissioner of बनाम/ M/s. Larsen & Toubro Ltd. Income Tax (TDS) 2(1), (E&C Division), 5 t h Floor, Vs. Room No.702,7 t h Floor, EPC Block, Gate No.1, Smt.K.G.Mittal Ayurvedic Saki Vihar Road, Hospital Building, Charni Mumbai 400 072. Road, Mumbai 400002.
थायी ले खा सं . /जीआइआर सं . /PAN/GIR No. : AAAL0140P
(अपीलाथ /Appellant) .. ( यथ / Respondent)
Appellant by Ms. S.Padmaja Respondent by Ms. Usha Gopalan सनु वाई क तार"ख / Da te o f Hearing : 04/06/2015 घोषणा क तार"ख /Date of Pronouncement : 04/06/2015
आदे श / O R D E R
PER I.P.BANSAL, J.M:
This is an appeal filed by the Revenue and it is directed against order passed by Ld. CIT(A)-14, Mumbai dated 15/10/2013 for assessment year 2010-11. Grounds of appeal read as under:
" 1. On the facts and circumstances of the case and in law, the learned CIT(A) erred in allowing the appeal of the assessee on the basis of reasoning that bank guarantee charges are not in the nature of "commission" and no TDS was required to be deducted on such charges paid to banks u/s.194H of the I.T. Act, 1961.
2 आयकर अपील सं. / ITA No.7630/MUM/2013 नधा रण वष /Assessment Year 2010-11
2. On the facts and in the circumstances of the case and in law, the learned CIT(A) has erred in deleting the interest u/s 201(1A) of the IT Act, 1961, determined by the AD as the tax determined has already been deleted by him on the bank guarantee charges and interest deletion is consequential to the quantum deletion for which further appeal has been recommended vide ground No.1."
2. At the outset it was submitted by Ld. AR that this issue is covered in favour of the assessee by the decision of Mumbai ITAT in the case of Kotak Securities Ltd. vs. DCIT, 147 TTJ 443 (Mum), copy placed on our record, wherein it has been held that when bank issues bank guarantee on behalf of assessee, there is no principal agent relationship between bank and assessee and, therefore, assesee is not required to deduct tax at source under section 194H from payments of bank guarantee commission made to the bank.
3. Ld. DR did not controvert such submission of Ld. AR.
4. In this view of the situation we have heard both the parties. Ld. CIT(A) while deciding the issue in favour of assessee has followed the aforementioned decision of Tribunal and has held that TDS was not required to be deducted under section 194H, therefore, levy of interest under section 201(1A) was not in accordance with law. Since no contrary decision was brought to our notice, respectfully following the said decision of Tribunal in the case of Kotak Securities Ltd.(supra), we decline to interfere in the relief granted by Ld. CIT(A).
5. In the result, the appeal filed by the Revenue is dismissed.
Order pronounced in the open court on 04/06/2015 आदे श क घोषणा खुले यायालय म) *दनांकः 04/06/2015 को क गई ।
Sd/- Sd/- ( राजे , / RAJENDRA) (आय.पी. बंसल / I.P. BANSAL) लेखा सद य / ACCOUNTANT MEMBER या यक सद य / JUDICIAL MEMBER मुंबई Mumbai; *दनांक Dated 04/06/2015 3 आयकर अपील सं. / ITA No.7630/MUM/2013 नधा रण वष /Assessment Year 2010-11
आदे श क त ल प अ!े षत/Copy of the Order forwarded to : 1. अपीलाथ / The Appellant 2. यथ / The Respondent. 3. आयकर आयु.त(अपील) / The CIT(A)- 4. आयकर आयु.त / CIT
5. /वभागीय त न1ध, आयकर अपील"य अ1धकरण, मुंबई / DR, ITAT, Mumbai
6. गाड फाईल / Guard file.
आदे शानुसार/ BY ORDER, स या/पत त //True Copy//
उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपील य अ धकरण, मंब ु ई / ITAT, Mumbai व. न.स./Vm, Sr. PS
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