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TMI Blog2022 (9) TMI 404X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Tribunal in the case of Biocon Ltd. [ 2022 (4) TMI 795 - ITAT BANGALORE] has considered a scenario where no payment is required to be made and the entire amount of provision is reversed in the subsequent year and the applicability of TDS liability on the same. If the liability has not crystallized and no payment is required to be made against the provision, then there will be no liability to deduct tax at source against the provision made. We notice that the waiver letter that is submitted before us dated 9.10.2014 does not contain the details as to the period from when the interest cost is not chargeable and interest is kept in abeyance until when. We also see merit in the contention of the DR that the status of reversal and pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in as much as the provisions of Section 201 of the Act does not levy any charge on the Assessee to pay the tax at source not deducted but merely treats him as an assessee in default and the order is passed not in consonance and read with the provisions of Sec 191. (d) Ground No. 4: The order passed by the Ld. AO is bad in law in as much as the provisions of Section 193 of the Act are not applicable to the facts and circumstances of the case of the Appellant. (e) Grounds No. 5: The impugned order passed by the Ld. AO under section 201 in so far as it is against the Appellant is opposed to and not based on applicable laws, weight of evidence, books of accounts, tax returns, probabilities, facts and circumstances of the Appellant's ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce cost as interest accrued against Compulsory Convertible Debentures [CCDs] on which tax was not deducted. A notice u/s. 201(1) 201(1A) of the Act dated 5.6.2017 was issued to the assessee asking to show cause why it should not be held as an assessee in default u/s 201(1) and interest levied u/s. 201(1A). The assessee submitted before the AO that provision for interest is reversed at the beginning of the following year before the due date for remittance of TDS and there was no liability to be discharged before the due date of payment of TDS. The assessee also stated that it was a mere provision in the books of account and no invoice or debit note for interest was received. However, the AO did not accept the submissions of the assessee a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mitted that there was no subsequent payment of interest by the assessee and the payee did not receive any interest from the assessee in order to attract TDS provisions. In this regard the ld AR relied on the decision of the coordinate Bench of the Tribunal in the case of Biocon Ltd. in ITA No.1248/Bang/2014 dated 21.3.2022. 8. The ld. DR submitted that the assessee has entered into an agreement with the lender for issue of CCDs and as per the terms of the agreement, the assessee was liable to pay interest to the lender. The ld DR also submitted that the provision that got reversed in the beginning of the subsequent financial year, whether was provided for again at the end of the next financial year needs to be factually verified. The ld ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the deductor was liable to deduct tax at source even if the interest was not actually paid to the creditors due to losses. 9. We have considered the rival submissions and perused the material on record. As per the terms of the debenture agreement, the assessee is liable to pay interest to the lender. It was submitted that the interest was waived by the vendor from the beginning and therefore the interest was reversed immediately in the beginning of the next financial year. The coordinate Bench of the Tribunal in the case of Biocon Ltd. (supra) has considered a scenario where no payment is required to be made and the entire amount of provision is reversed in the subsequent year and the applicability of TDS liability on the same. The Tri ..... X X X X Extracts X X X X X X X X Extracts X X X X
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