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TMI Blog1992 (4) TMI 16X X X X Extracts X X X X X X X X Extracts X X X X ..... een filed by the Commissioner of Income-tax, Rajasthan, Jaipur, for making a reference of the following question : "Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the assessee was not under obligation to deduct tax at source under section 194A and consequently erred in quashing the Income-tax Officer's order under section 201(1A) of the Income- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authority did not accept the plea of the assessee and rejected the same. Against the said order, the assessee preferred second appeal before the Income-tax Appellate Tribunal, and it was allowed on the ground that there was no obligation on the assessee to deposit interest inasmuch as it was maintaining accounts in accordance with the mercantile system of accounting, hence, instead of crediting t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee urged that since the interest was not credited to the account of the payee nor paid to him, the question of deduction of tax at source or consequent default for incurring of liability for levy of interest, did not arise. For the submission made, learned counsel for the assessee referred to the decision of the Supreme Court in CIT v. Toshoku Ltd. [1980] 125 ITR 525. In this case, the question ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... note regarding the amendment states that section 194A has been amended to provide that the tax will be deducted at source on accrual of interest at the end of the accounting year or at the time of crediting it to the account of the payee or at the time of payment, whichever is earlier, and it further states that it was done with a view to prevent postponement of liability relating to such deducti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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