The assessee was part of a group engaged in building and developing properties, selling flats and offices for residential and commercial use. The group had taken a loan from a bank. The assessee borrowed a sum of money from its group entities and paid interest on the same. The Assessing Officer held that the assessee was under a statutory obligation to deduct TDS u/s.194A on the interest paid to its group entities.

Held that since the interest paid by the assessee was only a reimbursement of interest already subjected to TDS by the group entities, the assessee had no liability to deduct TDS under Section 194A. Consequently, the provisions of S.201 (1), treating the assessee as an “assessee in default” and interest liability u/s.201 (1A) did not apply.(AY. 2016-17 to 2020-21)