OPC Asset Solutions Pvt. Ltd. Vs JCIT (ITAT Chennai)
The Income Tax Appellate Tribunal, Chennai, decided seven appeals filed by the assessee against separate orders dated 30.03.2026 passed by the Addl./JCIT(A)-3, Bengaluru for Assessment Years 2018-19 to 2024-25. The appeals concerned the validity of tax demands under Sections 201(1) and 201(1A) of the Income-tax Act on the allegation that the assessee failed to deduct tax at source under Section 194A from discounting charges treated by the Assessing Officer (AO) as interest.
The assessee, engaged in Asset Life Cycle Management, explained that its business consisted of dealing in residuary interest in movable assets. Under its business model, after entering into a Master Rental Agreement with customers, it assigned or sold the right to receive future rentals to banks or NBFCs under “Sale of Receivables” agreements on a non-recourse basis. The financier paid a negotiated sale consideration for the receivables, while the assessee invested the balance amount required to acquire the assets. Ownership of the assets remained with the assessee, but the financier collected rentals directly from customers during the rental period. The assessee contended that the consideration received from financiers represented the price for assignment of receivables and not borrowed money, and therefore no interest or discounting charges arose in its hands. It also stated that this accounting method had been consistently followed since incorporation and accepted in earlier scrutiny assessments.
