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1 - 5 of 5 (0.31 seconds)Section 2 in The Securities Contracts (Regulation) Act, 1956 [Entire Act]
The Income Tax Act, 1961
South Gujarat Roofing Tiles ... vs State Of Gujarat And Another on 20 October, 1976
In the
case of South Gujarat Roofing Tiles Manufacturers Association vs.
State of Gujarat [(1976) 4 SCC 601], Hon'ble Supreme Court were in
seisin of a situation in which an expression, namely 'processing', was
given an inclusive definition, but Their Lordships were of the view that
"there could be no other meaning of 'processing' besides what is
stated as included in that expression" and that "Though 'include' is
generally used in interpretation clause as a word of enlargement, in
some cases context might suggest a different intention'. Their
Lordships then concluded that though the expression used in the
definition clause is 'includes', "it seems to us that the word 'includes'
has been used here in the same sense of 'means'; this is the only
construction that the word can bear in this context". In other words,
an inclusive definition, as Their Lordships noted, does not necessarily
always extend the meaning of an expression. When inclusive definition
contains ordinary normal connotations of an expression, in our
considered view, even an inclusive definition has to be treated as
exhaustive. That is the situation in the case before us as well. Even as
definition of expression 'commission or brokerage', in Explanation to
Section 194H, is stated to be exclusive, it does not really mean
anything other than what has been specifically stated in the said
definition.
Foster'S India (P) Ltd. vs Income Tax Officer on 28 April, 2008
Therefore, as held by the coordinate benches in a number of
cases including SRL Ranbaxy Ltd vs ACIT (ITA No. 434/Del/11; order
dated 16.12.2011), Fosters India Ltd Vs ITO (117 TTJ 346), and Ajmer
Zila Dugdh Utpadak Sangh Ltd Vs ITO, principal agent relationship is a
sine qua non for invoking the provisions of Section 194H. In the case
before us, there is no principal agent relationship between the bank
issuing the bank guarantee and the assessee. When bank issues the
bank guarantee, on behalf of the assessee, all it does is to accept the
commitment of making payment of a specified amount to, on demand,
the beneficiary, and it is in consideration of this commitment, the bank
charges a fees which is customarily termed as 'bank guarantee
commission' . While it is termed as 'guarantee commission', it is not in
the nature of 'commission' as it is understood in common business
parlance and in the context of the section 194H. This transaction, in
our considered view, is not a transaction between principal and agent
so as to attract the tax deduction requirements under section 194H.
We are, therefore, of the considered view that the CIT(A) indeed erred
in holding that the assessee was indeed under an obligation to deduct
tax at source under section 194H from payments made by the
assessee to various banks. As we have held that the assessee was not
required to deduct tax at source under section 194H, the question of
levy of interest under section 201(1A) cannot arise.
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