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TMI Blog2016 (4) TMI 1132X X X X Extracts X X X X X X X X Extracts X X X X ..... nterest. The question of disallowing the entire amount under Section 40(a) (ia) on the ground that the TDS was not deducted in terms of Section 194A of the Act did not arise. The Court is unable to find any legal infirmity in the view expressed by the ITAT that the factoring/discounting charges in the present case cannot be treated as interest for the purpose of 194A. - Decided in favour of ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompany engaged in the business of manufacturing and trading in gold, diamond jewellery and bullion. In return of income for AY 2009-10 it declared an income of ₹ 2,79,89,810. The return was picked up for scrutiny. It was noticed from the notes to the accounts that the Assessee company had availed factoring facility from Global Trade Finance Ltd. ( GTFL ). It was further noticed that in the P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said sum since TDS was not deducted therefrom in terms of Section 40(a)(ia) of the Act. 5. After the Commissioner of Income Tax (Appeals) [CIT(A)] upheld the above order by disposing of the Assessee s appeal by order dated 27th July 2012, the Assessee went in appeal before the ITAT. In the impugned order, the ITAT relied on the order dated 12th August 2014 of the Calcutta High Court in ITA No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... query raised by the AO during assessment proceedings, the Assessee by its letter dated 12th September 2011 clarified as under: The assessee company had paid discount to M/s. Global Trade Finance Ltd. (GTF) for availment of Factoring facility and not interest. This fact is very clear as per the sanction letter given by the GTF which was filed before your goodself vide our letter dated 02.09.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e's explanation and simply treat the entire amount as interest. The question of disallowing the entire amount under Section 40(a) (ia) on the ground that the TDS was not deducted in terms of Section 194A of the Act did not arise. 9. In the facts and circumstances of the case, the Court is unable to find any legal infirmity in the view expressed by the ITAT that the factoring/discounting cha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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