Usance interest paid under letter of credit liable for TDS

Payment of finance charges to foreign supplier for availing credit for supply of raw-material is in the nature of interest under the Income-tax Act, 1961 Briefly stated facts of the case are that the assessee paid a sum of Rs.9,54,684/- to a foreign bank without deduction of tax at source. In the audit report, it was mentioned that it was a usance interest paid under the letter of credit and hence not liable for any deduction of tax at source. In support of its case, the assessee relied on the order passed by the Tribunal in the case of Vijay Ship Breaking Corporation vs. DCIT (2002) 76 TTJ 16...