Payment of Bank Guarantee Commission not liable to TDS under section 194H

1. Principal agent relationship is a sine qua non for invoking the provisions of section 194H
2. 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, on demand, to 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 is understood in common business parlance and in the context of section 194H; this transaction, is not a transaction between principal and agent so as to attract the tax deduction requirements under section 194H