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2024 (6) TMI 856 - AT - Income TaxIssues Involved: The appeal challenges the addition of interest paid on delayed payment to a share broker due to non-deduction of tax at source. Comprehensive Details: 1. The AO observed the finance cost charged by the assessee for delayed payments and added Rs. 24,68,080/- to the income for non-deduction of TDS on interest. The CIT(A) upheld the AO's decision. 2. The ITAT found that the interest payments were made to the broker for delayed payments, not on borrowed capital, and thus not covered u/s 2(28A) of the Act. Citing precedent, the ITAT concluded that the interest on delayed payments is not subject to TDS u/s 194A. 3. Referring to case law, the ITAT highlighted that payments for delayed purchase bills do not fall under the definition of interest u/s 2(28A). The nature of the payment was considered a trade liability, not requiring TDS deduction under s. 194A or falling under s. 40(a)(ia) disallowance. 4. Relying on previous decisions, the ITAT determined that the interest paid for delayed purchase payments did not qualify as interest u/s 2(28A) and was not subject to TDS deduction. Consequently, the ITAT directed the AO to delete the addition made by the AO and allowed the appeal. *Note: Separate judgment was not delivered by the judges mentioned in the citation.*
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