Case Law Details
Brief Facts of the Case and Question of Law
Brief Facts:
♠ The assessee is a private limited company engaged in the business of manufacturing and trading in gold, diamond jewellery and bullion. For the relevant year, return of income was filed on 07.03.2010 declaring an income of Rs.2,79,89,810/-.
♠ The company had availed factoring facility from M/s. Global Trade Finance Limited (hereinafter referred to GTF) for which a payment of Rs.93,68,870/- was made to the former debiting the same to Profit and Loss Account under the head Factoring/Discounting charges.
♠ The Assessing Officer made an addition of Rs.93,68,870/- on account of factoring/discounting charges, treating the same as Interest paid. The AO was of the view that the provisions of section 40(a)(ia) of the Act are invoked as no tax at source was deducted on the same, therefore assessing the total income at Rs.3,73,58,680/-, the same being upheld by CIT(A), New Delhi.
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