NATIONAL HIGHWAYS AUTHORITY OF, Jaipur V. DCIT, Jaipur

ITA 1145/JPR/2011

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 6506 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 6 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-07-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 15-11-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 30-12-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: D C SHARMA
• Assessee Lawyers: VIKAS RAJVANS HI
• Section: 201(1)

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH, JAIPUR (BEFORE SHRI R.P. TOLANI AND SHRI T.R. ME ENA) ITA NOS. 1145, 1146, 1147 & 1148/JP/ 2011 ASSESSMENT YEARS: 2007-08, 2008-09, 2009-10 & 201 0-11 PAN : JPRN 00336 A M/S. NATIONAL HIGHWAY AUTHORITY OF INDIA VS. THE D CIT 156, GIRNAR COLONY, VAISHALI NAGAR TDS JAIPUR JAIPUR JAIPUR (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI VIKAS RAJVANSHI DEPARTMENT BY: SHRI D.C. SHARMA DATE OF HEARING: 08-07-2014 DATE OF PRONOUNCEMENT: 11-07-2014 ORDER PER R.P. TOLANI, JM THESE ARE THE FOUR APPEALS FILED BY THE ASSESSEE A GAINST FOUR DIFFERENT ORDERS OF THE LD. CIT(A)-III, JAIPUR DATED 14-10-20 11 FOR THE ASSESSMENT YEARS 2007-08, 2008-09, 2009-10 AND 2010-11 RESPECT IVELY. 2.1 THE GROUND RAISED BY THE ASSESSEE IN ALL THE AB OVE APPEALS IS COMMON. HOWEVER, FOR THE SAKE OF CONVENIENCE, THE GROUND RA ISED IN THE APPEALS IS SUMMARIZED AS UNDER:- THE LD. AO AND CIT (A) HAS ERRED IN LAW AS WELL A S IN FACTS IN WRONGLY APPLYING THE PROVISION OF SECTION 206(1C) OF I.T. ACT, 1961 AND CONSEQUENTLY THE DEMANDS OF RS. 26,750/- FOR A.Y. 2007-08, RS. 88,688/- FOR A.Y. 2008-09, RS . 88,688/- 2 FOR A.Y. 2009-10 AND RS. 2,95,20,241/- FOR A.Y. 201 0-11 RESPECTIVELY U/S 201(1) AND 201(1A) ON ACCOUNT OF NON- COLLECTION OF TCS BY WRONGLY CONSIDERING THAT :- (A) THE CONTRACT BETWEEN THE ASSESSEE AND THE CONCE SSIONAIRE (M/S. PINKCITY EXPRESSWAY (P) LTD. AND M/S. GVK EXP RESSWAY (P) LTD. ) ARE OF THE LICENSEE OR LESSEE. (B) THE LD. AO AND CIT (A) ALSO ERRED IN CONSIDERI NG THAT APPELLANT HAS ENTRUSTED THE RIGHT OF OR AUTHORIZES COLLECTION OF TOO FEES BETWEEN JAIPUR KISHANGARH AND JAIPUR G URGAON HIGHWAY TO THE ABOVE CONCESSIONAIRES WHICH ARE ACTU ALLY BOT CONTRACTS. 2.2 THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE IS A PROJECT IMPLEMENTATION UNIT OF THE NATIONAL HIGHWAY AUTHORI TY OF INDIA WHICH IS HAVING TWO PROJECTS FOR THE CONSTRUCTION OF THE ROA DS AND TOLL COLLECTION AS UNDER:- 1. GVK JAIPUR KISHANGARH EXPRESSWAY (P) LTD. (FOR T HE CONSTRUCTION OF ROADS AND TOLL COLLECTION ON JAIPUR KISHANGARH HIGHWAY). 2. PINK CITY EXPRESS WAY (P) LTD. ( FOR THE JAIPUR GURGAON HIGHWAY) FOR THIS PURPOSE, THE ASSESSEE HAS ENTERED INTO A C ONCESSION AGREEMENT WITH THESE ENTITIES AND THE AGREEMENT IS ON BUILD OPERAT E TRANSFER (FOR SHORT BOT) MODEL FOR A PERIOD OF 20 YEARS AND 12 YEARS RESPECTIVELY. IN THIS CASE, A TDS SURVEY WAS CARRIED OUT ON THE ASSESSEE PREMISES ON 30-11-2009 AND DURING THE COURSE OF SURVEY THE PAPERS PERTAINI NG TO F.Y. 2005-06 TO F.Y. 2009-10 WERE FOUND. THE AO WAS OF THE VIEW THA T THE ASSESSEE LIABLE 3 FOR DEDUCTION OF TCS AS PER SECTION 206C(1C) WHICH HAS NOT BEEN DEDUCTED. VIDE LETTER DATED 19-01-2010, THE ASSESSEE WAS ASKE D FOR EXPLANATION IN THIS BEHALF. THE ASSESSEE IN ITS DETAILED REPLY MAINLY C ONTENDED AS UNDER:- (I) NHAI WAS NOT THE OWNER OF TOLL PLAZA AND, THERE FORE, CANNOT GIVEN THESE PREMISES ON LICENSE OR LEASE. BE SIDES, M/S. GVK AND M/S. PINKCITY WERE RECOVERING THEIR CONSTRU CTIONS COSTS BY WAY OF TOLL COLLECTION AND NHAI IS NEITHER DEBITING THE AMOUNT NOR COLLECTING TOLL FROM THEM. THE AO DID NOT ACCEPT THE ASSESSEE'S CONTENTION ON THE GROUND THAT THE CONCESSION AGREEMENT SPECIFICALLY MENTIONS THAT AN EXCLUSIVE RIGHT OR LICENSE IS BEING GRANTED TO THE CONCESSIONAIRE AND THIS INCLUDES THE RIGHT TO LEVY FEE OR IN OTHER WORDS COLLECT TOLL. 2.3 THE ASSESSEE ALSO RAISED THE ALTERNATIVE PLEA T HAT FOR THE YEARS IN QUESTION M/S. GVK AND PINKCITY, BOTH THE CONCERNS H AD FILED THEIR RETURNS OF INCOME, INCLUDING THE INCOME COLLECTED FROM TOLL PL AZAS. THE RELEVANT TAX HAS BEEN PAID BY THE ABOVE CONCERNS. THERE WAS NO L OSS TO THE REVENUE. RELIANCE WAS PLACED ON THE FOLLOWING CASE LAWS:- 1. HINDUSTAN COCA COLA BEVERAGES (P) LTD. VS. CIT (2007), 293 ITR 226 (SC). 2. CIT VS. ADDIDAS INDIA MARKETING (P) (2007) 288 ITR 379 (DEL.) 4 THE AO PARTLY ACCEPTED THE ASSESSEE'S PLEA BY RELYI NG ON CBDT CIRCULAR NO. 27/201/95-IT(B) DATED 29-01-1997 AND M/S. HINDU STAN COCA COLA BEVERAGES (P) LTD. VS. CIT (SUPRA) FINDING THAT TH E RELEVANT INCOME HAS BEEN RETURNED BY M/S. M/S. GVK AND PINKCITY AND TAXES HA VE BEEN PAID THEREOF. THEREFORE, THE TCS NOT MADE BY THE ASSESSEE WAS DEL ETED. HOWEVER, THE COMPENSATORY LOSS OF INTEREST TO THE REVENUE U/S 20 1(1A) OF THE ACT ON THE DATE OF FILING OF RETURN BY M/S. GVK AND PINKCITY W AS LEVIED WHICH WAS CHALLENGED BY THE ASSESSEE BEFORE THE LD. CIT(A). 2.4 THE LD. CIT(A) UPHELD THE AOS ORDER IN THESE Y EARS BY FOLLOWING OBSERVATIONS. ON SAMPLE BASIS, THE OBSERVATIONS OF THE LD. CIT(A) FOR THE ASSESSMENT YEAR 2006-07 ARE REPRODUCED. CONCLUSION :- IN THE LIGHT OF THE ABOVE FACTUAL AND LEGAL POSITIONS, IT IS INFERRED THAT THE APPELLANT IS THE REAL AND ACTUAL OWNER OF THE HIGHWAY PROJECTS AND THE TOLL P LAZAS ETC. THE TERMS AND CONDITIONS OF THE CONCESSION AGREEME NTS TOWARDS GRANTING THE RIGHTS TO OPERATE THE TOLL PLA ZA AND COLLECTION OF FEE ETC. ARE OF THE NATURE WHICH AKIN TO THE LEASE AND LICENSE AGREEMENT TO TRANSFER THE INTEREST OF T OLL COLLECTION RIGHTS OF THE PROJECT TO THE CONCESSIONAIRE FOR LIM ITED PERIODS. SINCE THE CONCESSIONAIRES WERE GIVEN THE COMMERCIAL RIGHTS OF COLLECTING TO THE TOLL PLAZA, ON BEHALF OF THE NHAI , FOR LIMITED PERIOD AND THEY ARE NOT THE PUBLIC LTD. CO. , THERE FORE, THE ARRANGEMENT OF OPERATING THE TOLL PLAZA FALLS UNDER THE PURVIEW 5 OF SECTION 206C(1C). MOREOVER, THE SUBSEQUENT CONDU CT OF THE APPELLANT OF COLLECTING THE TCS ON SUCH TOLL COLLEC TION FROM THE CONCESSIONAIRE ALSO FURTHER SUBSTANTIATES THE STAND S OF THE AO, TAKEN IN THIS REGARD. ACCORDINGLY, IT IS HELD THAT THE APPELLANT WAS AT FAULT FOR NOT COMPLYING WITH THE PROVISION O F SECTION 206C(1C) OF THE ACT, ON THIS ACCOUNT, THEREFORE, TH E LIABILITY RAISED U/S 201(1A) OF RS. 26,750/- IS HEREBY UPHELD . CONSEQUENTLY, THIS GROUND OF APPEAL IS REJECTED. 2.5 THE LD. COUNSEL FOR THE ASSESSEE REITERATED TH E ARGUMENTS AND CONTENDED THAT THERE WAS NO LIABILITY ON THE ASSESS EE I.E. NHAI AS IT WAS NOT THE OWNER OF THE TOLL PLAZAS. THEREFORE, THE LEVY I S NOT LEGAL. THE WRITTEN SUBMISSIONS ARE FILED TO THE EFFECT THAT NHAI CANNO T BE HELD AS ASSESSEE IN DEFAULT. RELIANCE IS PLACED VARIOUS JUDGEMENTS . 2.6 THE LD. DR ON THE OTHER HANDS CONTENDS THAT THE ASSESSEE ITSELF IN SUBSEQUENT YEARS HAS STARTED COLLECTING THE TCS AND PAYING IT TO THE GOVT.. THERE IS NO DISPUTE THAT THE ASSESSEE ENTERED INTO A CONCESSION AGREEMENT WITH M/S. GVK AND PINKCITY. THE AGREEMENT REFERS TO M/S. NHAI AS LESSOR. THE CAPACITY OF THE LESSOR IS BASED ON LONG TERM LE ASE PROVIDED TO NHAI. MERELY BEING NOT THE ACTUAL OWNER, IT DOES NOT HELP THE ASSESSEE INASMUCH AS IT WAS HOLDING A PERFECT AND ENFORCEABLE LEASE AND HIGHWAY TOLLS WERE GIVEN IN LEGAL CAPACITY BY GOVT. SANCTIONED SCHEME TO THE ABOVE ENTITIES. THEREFORE, THERE IS NO JUSTIFICATION IN ASSESSEE'S CLAIM THAT IT CANNOT BE HELD 6 AS ASSESSEE'S IN DEFAULT. THIS IS FURTHER CLEAR FRO M THE FACT THAT IN SUBSEQUENT YEARS, THE ASSESSEE STARTED COLLECTING TCS AND PAYI NG IT TO THE GOVT. THE ARGUMENT THAT THE ASSESSEE IS NOT LIABLE FOR TCS IS NOT UNTENABLE. THE AO HAS BEEN MORE THAN REASONABLE INASMUCH AS THAT UNPA ID TCS HAS NOT RECOVERED BY RELYING ON THE DECISION OF HON'BLE HO N'BLE APEX COURT IN THE CASE OF HINDUSTAN COCA COLA BEVERAGES VS. CIT (SUP RA) AND WHAT HAS BEEN CHARGED ONLY IS IN FORM OF COMPENSATORY LOSS OF INT EREST FROM THE DUE DATE TO FILING OF RETURN OF INCOME BY M/S. GVK AND PINKCITY . THIS IS PERFECTLY REASONABLE APPROACH ADOPTED BY THE AO WHICH IS CONF IRMED BY THE LD. CIT(A). THE ASSESSEE EXCEPT THE UNTENABLE PLEA ABOU T THE OWNERSHIP HAS NOT MADE ANY ARGUMENTS ABOUT UNREASONABLENESS OF THE LE VY OF INTEREST U/S 201(1A) OF THE ACT. THEREFORE, THE ASSESSEES APPEA LS ARE LIABLE TO BE DISMISSED. 2.7 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. AS FAR AS THE LEGAL PLEA ABOUT THE OWNERSHIP RAISED BY THE ASSESSEE IS CONCERNED, WE SEE NO MERIT AS THE A SSESSEE HAD PERFECT LEGAL CAPACITY TO LEASE THE HIGHWAY TOLLS AND PLAZAS TO COLLECT THE RELEVANT REVENUE. THE AGREEMENT IS VALID AND ENFORCEABLE BES IDES SECTION 206C(1C) REFERS TO THAT EVERY PERSON, WHO GRANTS A LEASE OR A LICENSE. THE WORD OWNERSHIP HAS NOT BEEN MADE MANDATORY. IN THESE CIR CUMSTANCES, WE REJECT 7 THE PLEA OF THE ASSESSEE AND IT CANNOT BE HELD THAT ASSESSEE IS NOT IN DEFAULT FOR NON-COLLECTION OF TCS. THUS THIS GROUND OF THE ASSESSEE IS DISMISSED. 3.1 APROPOS THE LEVY OF INTEREST, IN OUR CONSIDERED OPINION THE LEVY OF INTEREST IS APPLICABLE FROM THE DUE DATE OF FILING OF RETURNS BY M/S. GVK AND PINKCITY. WE SEE NO INFIRMITY IN THE ORDERS OF THE AO AND THE LD. CIT(A) WHO HAVE FOLLOWED THE JUDGEMENT OF HON'BLE SUPREME COURT IN THE CASE OF HINDUSTAN COCA COLA BEVERAGES VS. CIT (SUPRA) AND BOARDS CIRCULAR IN THIS BEHALF. WE, THUS UPHOLD THE ORDER OF THE LD. C IT(A). 4.0 IN THE RESULT, THE APPEALS OF THE ASSESSEE ARE DISMISSED. THE ORDER PRONOUNCED IN OPEN COURT ON 11TH JU LY, 2014. SD/- SD/- (T.R. MEENA) (R.P. TOLANI) ACCOUNTANT MEMBER JUDICIAL MEMBER JAIPUR DATED: 11 TH JULY, 2014 *MISHRA COPY FORWARDED TO:- 1. M/S. NATIONAL HIGHWAY AUTHORITY OF INDIA, JAIPUR 2. THE DCIT- TDS, JAIPUR 3. THE LD. CIT 4. THE LD. CIT(A), JAIPUR BY ORDER 5..THE LD. DR 6.THE GUARD FILE (ITA NO. 1145/JP/2011) AR ITAT, JAIPUR 8