s. 194H TDS: In absence of principal-agent relationship, payment, though called “commission”, not covered

Kotak Securities Limited vs. DCIT (ITAT Mumbai)

The assessee obtained a bank guarantee and paid ‘bank guarantee commission’. The AO & CIT (A) took the view that since the payment was characterized as “commission” it fell within the ambit of s. 194H and the assessee ought to have deducted TDS. The assessee was held liable as assessee-in-default u/s 201. On appeal by the assessee, HELD reversing the AO & CIT (A):