194 A treating as a interest. In our case we discounting bill thru private party but actulally we are paying interest in form of bill dicounting nodoubt the situation is differ as we are actually not paying interest but they(private party) direct deduct from our payment but it does not change the character of interest and so that liable u/s. 194 A. as per recent dicison of Kanhavanspati - delhi high court sir, we have read like this if any thing in form of interest by whatever named called either it is financial charges, bill discounting or any thing else it would be cover under section
sir, if i am discounting my bill thru financer and inwhich i passes my trade(property of bill) to financer and hence the financer directly collect payment from my seller. In this process, the financer cut some amount as a bill discounting and remaining amount pay to me. so, my query is wheter i should deduct tax on charged debited to my profit and loss account under the head of 'bill discount'. in recent judgement of of Kanha Vanaspati Ltd..v.Additional Commissioner of Income-tax, Range-50, New Delhi, kindly clarify considering this judgement. the main problem is how can i deduct tax as i am not directly paying anything in form of bill discounting as the financer cut the same charges and then after giving me a remaining payment
CAclubindia
