THOMAS MUTHOOT Vs. ACIT

JUDGEMENT

(1.) ALL the appeals of the assessees relate to three independent assessees. ITA No. 164/Coch/2013 is against the levy of interest u/s. 201(1) & 201(1A) for the assessment year 2009 -10. All other appeals are with regard to levy of penalty u/s. 271C for non deduction of tax at source on the interest payment to partnership firm.

(2.) LET us first take the appeal pertaining to levy of interest u/s. 201(1) & 201(1A) in appeal No. 164/Coch/2013 in the case of Shri Thomas John Muthoot.

(3.) ON the contrary, Smt. Latha V Kumar, the ld. DR submitted that admittedly, the assessee is a partner in two partnership firms. Under the Income -tax Act, partners and partnership firms are two separate and independent assessable units, therefore, any transaction between the partners and partnership firm is taxable under the Income -tax Act. According to the ld. DR, when the assessee pays interest to the partnership firm, the assessee is liable to deduct tax u/s. 194A of the Act. The non deduction of tax, according to the ld. DR, results in levy of penalty u/s. 271C and interest u/s. 201(1A) of the Act. On a query from the bench, how section 194A is applicable for individual assessees, the ld. DR, after reading the provisions of section 194A submitted that she would leave the matter to the discretion of the Court.