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TMI Blog2016 (7) TMI 1356X X X X Extracts X X X X X X X X Extracts X X X X ..... t, the bank charges a fees which is customarily termed as Bank Guarantee Commission'. While it is termed as "guarantee commission" it is not the nature of 'commission' as it is understood in common business parlance and in the context of the section 194H. This transaction, in our considered view, is not a transaction between principal and agent so as to attract the tax deduction requirements u/s.194H. See M/s. Kotak Securities Ltd case [2012 (2) TMI 77 - ITAT MUMBAI] CIT(A) correctly held that the assessee was not required to deduct TDS u/s 194H the question of levy of interest u/s 201(1A) does not arise - Decided in favour of assessee. - I.T.A. No. 4390/Mum/2015 - - - Dated:- 7-7-2016 - A. D. Jain (Judicial Member) For the Appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... processing fees paid to the banks are governed by The Banking Regulation Act, 1949. The processing fees are in the nature of upfront interest. The banks charge processing fees to reduce interest rate and to show income in the year of sanction. In support of the submissions raised, the assessee placed strong reliance on the decision of Tribunal in the case of Aban Investments V/s DCIT (52 SOT 36) (Chennai (URO) and the decision of Delhi Bench of the Tribunal in the case of Bilt Power V/s ACIT (34 CCH 334) in which the Tribunal held since processing fees fall within the definition of interest provided in section 2(28A) of the Income Tax Act, 1961, these fall in the exclusion provided in section 194A(3) of the Act hence and hence, tax is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... : 201 (1A) of ₹ 24,545/-accordingly, stands deleted. B. BANK GUARANTEE COMMISSION MISC BANK CHARGES :.: On this ground reliance is placed on the order of the Hon'ble ITAT in the case of M/s. Kotak Securities Ltd. in ITA No.6657/Mum/11 dated 03.02.2012 for A.Y. 2004-05 wherein tile H n'ble IT T has held interalia as under :- In the case before us, there is no principal agent relationship between the bank issuing the bank guarantee and the assessee. When bank issues the bank guarantee, on behalf of-the assessee. When bank issues the bank guarantee, on behalf of the assessee, all it does is to accept the commitment of making payment of a specified amount to, on demand, the beneficiary and it is in consideration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of AO and submitted that the order of the ld.CIT(A) be set aside and that of the AO be restored. 8. I have considered the submissions of the ld.DR and have perused the material before me. The ld. DR did not bring any material on record to reverse the well reasoned findings of the ld.CIT(A) on the issues involved. The ld. CIT(A), for his decision, has relied on ITAT orders, which have not been shown to be upset. Therefore, I find that the order of ld.CIT(A) is justified and no interference is called for. Accordingly, the same is confirmed. The grounds raised by the department apropos processing fees and bank guarantee commission and miscellaneous bank charges, are rejected. 9. With regard to the ground regarding charging of levy of int ..... X X X X Extracts X X X X X X X X Extracts X X X X
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