TDS not deductible on interest on savings bank account and compulsory deposit account

Ram Garhia Co-operative Bank Ltd Vs ACIT (ITAT Delhi)

ITAT Delhi held that there is no liability to deduct TDS on interest on savings bank account and interest of compulsory deposit account as per the provisions contained u/s 194A of the Act. Accordingly, disallowance u/s 40(a)(ia) unsustainable.

Facts-

The assessee is a co-operative society carrying on the business of providing credit and deposits facilities. AO passed the assessment order after disallowing various expenditures. CIT(A) confirmed disallowance on account of non deduction of the tax on interest paid on various depositions invoking provisions of Section 40(a)(ia) of the Act. Further the CIT(A) has also confirmed the addition of Rs. 52,209,14/- on account of interest on Non Performing Asset and also confirmed the disallowance of an amount of Rs. 19,20,41/- on account of amortization of premium on government securities.

Being aggrieved, the present appeal is preferred by the assessee.

Please become a Premium member. If you are already a Premium member, login here to access the full content.