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TMI Blog2011 (10) TMI 640X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 2(28A) and was within the meaning and purview of section 194A - Held that:- The payment to the subscribers of a chit towards dividend does not partake the character of interest. In this view of the matter, we uphold the orders of the CIT(A) impugned in these appeals, in holding that the assessee is not liable to deduct TDS u/s. 194A of the Act and not liable for interest u/s. 201(1) and 201(1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... / distributed by the assessee though it represents the interest as per section 2(28A) and was within the meaning and purview of section 194A of the Act. 3. We have heard both the parties on this issue. Similar issue came up for consideration in the case of Marga Soochi Chit Pvt. Ltd., in I.T.A. No. 995/Bang/2008 and also in the case of Sahib Chits (Delhi) (P) Ltd., before the Delhi High Court in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a specific number of individuals come together to pool a specific amount at periodic intervals. Usually the number of individuals and number of periods is the same. At the end of each period, there is an auction of the chit. The members of the chit participate in this auction for the pooled money during that interval. The bid amount is divided by the number of members thus determining the contrib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... riber is required to forgo, decreases over periods. The person getting money in the last period received the full scheme amount." 5. Following the ratio laid down by various courts in the cases noted above, it has been consistently held by the coordinate Benches of this Tribunal, as in ITA Nos.804/Hyd/2011 for assessment year 2005-06 in the case of M/s. Vipanchi Chit Funds Ltd. and Anr, dated 11 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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