The ACIT,TDS Circle, Ahmedabad V. Hazira LNG Pvt.Ltd., Ahmedabad

ITA 1947/AHD/2011

• Counselvise Citation: 194720514 RSA 2011
• Duration Of Justice: 3 year(s) 10 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-06-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 22-06-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 04-08-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SONIA KUMAR
• Assessee Lawyers: HIREN J TRIVEDI AR
• Section: 194C

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT AND SHRI RAJPAL YADAV, JUDICIAL MEMBER ./ ././ ./ ITA NO. 1947/AHD/2011 / ASSESSMENT YEAR: 2009-10 ACIT, TDS-CIRCLE, AHMEDABAD V/S. HAZIRA LNG PVT LTD ABHIJEET-II, MITHAKHALI, AHMEDABAD PAN : AAACH 9143 C / // / (APPELLANT) !' !' !' !' / // / (RESPONDENT) REVENUE BY : SMT. SONIA KUMAR, SR. DR. ASSESSEE(S) BY : SHRI HIREN J. TRIVEDI, AR #$ % &'/ // / DATE OF HEARING : 22/06/2015 () % &' / // / DATE OF PRONOUNCEMENT: 22/06/2015 *+ *+ *+ *+/ // / O R D E R PER G.D. AGRAWAL, VICE PRESIDENT: THIS IS AN APPEAL FILED BY THE REVENUE AND IS DIREC TED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME-TAX (APPEAL S)-XXI, AHMEDABAD DATED 16.05.2011, PERTAINING TO ASSESSMENT YEAR 200 9-10. 2. IN THIS APPEAL BY THE REVENUE, FOLLOWING GROUNDS ARE RAISED:- 1. THE LD. CIT(A) ERRED IN LAW AS WELL AS ON FACTS OF THE CASE IN DELETING THE ORDER PASSED U/S.201(1) OF RS.1,43,90,043/- & INTER EST CHARGED U/S. 201(1A) OF THE 1 T ACT OF RS.31,65,816/- RESPECTIVELY FOR A .Y. 2009-10 TREATING THE USE OF PIPELINE FOR TRANSPORTATION OF GAS U/S. 194C OF THE ACT AS AGAINST U/S.194I OF THE I.T. ACT BY THE A. O. 2. THE LD.CIT(A) ERRED IN NOT CONSIDERING THE FACT THAT AFTER 13.7.2006 THE PROVISION OF 194I IS APPLICABLE ON HIRING CHARGES O F PIPELINE FOR TRANSPORTATION OF GAS WHICH COVER USES OF PLANT AND MACHINERY AND NOT THE PROVISION OF 194C OF I.T. ACT. ITA NO. 1947/AHD/2011 ACIT VS. HAZIRA LNG PVT LTD FOR AY 2009-10 2 3. THE LD. CIT(A) ERRED IN RELYING ON THE AGREEMENT ENTERED BETWEEN THE ASSESSEE & GSPL AND OVERLOOKING THE CLEAR PROVISION OF SECTION 194I WHERE IN PLANT IS COVERED IN THE DEFINITION OF RENT. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. 5. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GROUND OR ADD A NEW GROUND, WHICH MAY BE NECESSARY. 6. IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE LD. CIT(A) MAY BE CANCELLED AND THAT OF THE ASSESSING OFFICER MAY BE RESTORED T O THE ABOVE EFFECT. 3. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL PLACED BEFORE US. WE FIND THAT THE ITAT HAS CONSIDERED THE IDENTICAL ISSUE IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2008-09 VID E ITA NO.104/AHD/2011. IN THE SAID YEAR ALSO, THE ASSES SING OFFICER HAD HELD THE ASSESSEE TO BE IN DEFAULT FOR DEDUCTION OF TAX AT S OURCE U/S 194C AS AGAINST 194I IN RESPECT OF PAYMENT OF TRANSPORTATION CHARGE S OF GAS TO GSPL. ON APPEAL, THE CIT(A) ACCEPTED THE ASSESSEES CLAIM TH AT THE TAX WAS LIABLE TO BE DEDUCTED U/S 194C AND NOT 194I. ON APPEAL, THE ITA T UPHELD THE ORDER OF THE CIT(A). THE RELEVANT FINDING OF THE ITAT READS AS UNDER:- 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSE D THE MATERIAL ON RECORD. IT IS AN UNDISPUTED FACT THAT ASSESSEE HAS USED THE PIPELINE OWNED BY GSPL FOR THE TRANSPORTATION OF GAS. IT IS ALSO A FACT TH AT THE OWNERSHIP OF THE PIPELINE ALWAYS REMAINED WITH GSPL AND IN POSSESSIO N OF GSPL. WE FIND THAT LD. CIT(A) WHILE ALLOWING THE APPEAL OF THE AS SESSEE HAS GIVEN A FINDING THAT THE PIPELINE WAS USED ONLY FOR TRANSMISSION OF GAS AND DID NOT GIVE ANY INCLUSIVE RIGHT OR INTEREST TO THE ASSESSEE. WE FUR THER FIND THAT CIRCULAR NO. 9/12 DATED 17.10.2012 ISSUED BY CBDT IN THE CONTEXT OF DEDUCTION OF TAX AT SOURCE ON PAYMENT OF GAS TRANSPORTATION CHARGES HAS CLARIFIED AS UNDER:- 4. IT IS CLARIFIED THAT IN CASE THE OWNER/SELLER OF THE GAS SELLS AS WELL AS TRANSPORTS THE GAS TO THE PURCHASER TILL THE POINT OF DELIVERY, WHERE THE OWNERSHIP OF GAS TO THE PURCHASER IS SIMULTANEOUSLY TRANSFERRED, THE MANNER RAISING THE SALE BILL (WHETHER THE TRANSPORT ATION CHARGES ARE EMBEDDED IN THE COST OF GAS OR SHOWN SEPARATELY) DO ES NOT ALTER THE ITA NO. 1947/AHD/2011 ACIT VS. HAZIRA LNG PVT LTD FOR AY 2009-10 3 BASIC NATURE OF SUCH CONTRACT WHICH REMAINS ESSENTI ALLY A CONTRACT FOR SALE AND NOT A WORKS CONTRACT AS ENVISAGED IN SE CTION 194C OF THE ACT. HENCE IN SUCH CIRCUMSTANCES, PROVISIONS OF CHA PTER XVII-B OF THE ACT ARE NOT APPLICABLE ON THE COMPONENT OF GAS TRANSPORTATION CHARGES PAID BY THE PURCHASER TO THE OWNER/SELLER O F THE GAS. THE USE OF DIFFERENT MODES OF TRANSPORTATION OF GAS BY OWNE R/SELLER WILL NOT ALTER THE POSITION. 5. IT IS NEEDLESS TO MENTION THAT TRANSPORTATION CH ARGES PAID TO A THIRD PARTY TRANSPORTER OF GAS, EITHER BY THE OWNER/SELLE R OF THE GAS OR PURCHASER OF THE GAS OR ANY OTHER PERSON, SHALL CON TINUE TO BE GOVERNED BY THE APPROPRIATE PROVISIONS OF THE ACT AND TDS SH ALL BE DEDUCTIBLE ON SUCH PAYMENT TO THE THIRD PARTY AT THE APPLICABL E RATES. 7. IN THE CASE OF KRIBHCO SHYAM FERTILIZERS LTD. VS. ITO (ITA NOS. 78, 79 & 80/LKW/2013 ORDER DATED 25.06.2013 THE CO-ORDINATE BENCH HAS HELD AS UNDER:- TAX DEDUCTION AT SOURCEPURCHASE OF GAS-TRANSMISSIO N CHARGES APPLICABILITY OF SECTION 194CASSESSEE HAD PURCHASE D NATURAL GAS FROM GAILGAS WAS TRANSPORTED TO MANUFACTURING UNIT OF ASSESSEE THROUGH PIPELINE OF GAIL FOR WHICH ASSESSEE PAID TR ANSMISSION CHARGES TO GAILAO CONTENDED THAT ASSESSEE SHOULD H AVE DEDUCTED TAX FROM TRANSMISSION CHARGES PAID TO GAIL U/S 1941 AO CALCULATED SHORT DEDUCTION OF TAX AND RAISED DEMAND CIT(A) DIRECTED AO TO RECOMPUTE SHORT DEDUCTION BY APPLYIN G SECTION 194C RATHER THAT SECTION 1941HELD, FROM CIRCULAR NO. 9 OF 2012 ISSUED BY CBDT IT WAS CLEAR THAT WHENEVER GAS IS TRANSPORTED BY SELLER TO POINT OF DELIVERY, TRANSPORTATION CHARGES OF GAS WOULD BE EMBEDDED IN COST OF GAS, THOUGH TRANSPORTATION CHARGES ARE CLAIMED SEPA RATELY OR ALONG WITH COST OF GAS IN SALE BILL AND NATURE OF SUCH CO NTRACT ESSENTIALLY REMAINS A CONTRACT FOR SALE AND NOT A WORKS CONTRAC TBUT WHEREVER TRANSPORTATION OF GAS IS MADE BY THIRD PERSON APART FROM SELLER OF GAS, TRANSPORTATION CHARGES PAID BY BUYER TO TRANSPORTER SHALL BE GOVERNED BY PROVISIONS OF SECTION 194CTDS SHALL BE DEDUCTIB LE ON SUCH PAYMENT TO THIRD PARTY BY BUYER AT APPLICABLE RATES ASSESSEE HAD ADMITTED THAT IT HAD ALSO PURCHASED GAS FROM OTHER SELLERS APART FROM GAIL BUT SAME WAS TRANSPORTED BY GAILASSESSEE HAD PAID TRANSMISSION CHARGES TO GAIL AND ALSO DEDUCTED TDS ON PAYMENT IN SUCH CASES TRANSMISSION CHARGES PAID BY ASSESSEE TO GAIL ATTRACTED PROVISIONS OF SECTION 194C AS PER CIRCULARBUT THIS ASPECT HAD NOT BEEN CLARIFIED BY ANY OF LOWER AUTHORITIES AS THEY TREATED ENTIRE PAYMENT OF TRANSMISSION CHARGES AS HAD BEEN MADE U/ S 1941 OR 194C- ITA NO. 1947/AHD/2011 ACIT VS. HAZIRA LNG PVT LTD FOR AY 2009-10 4 ORDER OF CIT(A) SET ASIDE-MATTER RESTORED TO FILE O F AO WITH DIRECTION TO RE-EXAMINE ISSUE AFRESH. 8. BEFORE US REVENUE HAS NOT BROUGHT ANY MATERIAL ON RECORD TO CONTROVERT THE FINDINGS OF CIT(A) NOR HAS BROUGHT ANY CONTRARY BINDING DECISION IN ITS SUPPORT. IN VIEW OF THE THESE FACTS, WE FIND NO REA SON TO INTERFERE WITH THE ORDER OF CIT(A) AND THUS THIS GROUND OF REVENUE IS DISMISSED. 4. THE FACTS OF THE YEAR UNDER CONSIDERATION ARE ID ENTICAL, BECAUSE IN THIS YEAR ALSO, ON THE PAYMENT OF TRANSPORTATION CHARGES TO GSPL, THE ASSESSEE DEDUCTED THE TAX AT SOURCE U/S 194C. AS PER ASSESS ING OFFICER, ASSESSEE OUGHT TO HAVE DEDUCTED THE TAX AT SOURCE U/S 194I. HE, THEREFORE, HELD THE ASSESSEE TO BE LIABLE FOR LESS DEDUCTION OF TAX AT SOURCE. ON APPEAL, THE CIT(A) HAS ACCEPTED THE CONTENTION THAT THE TAX IS REQUIRED TO BE DEDUCTED U/S 194C. THE REVENUE, AGGRIEVED WITH THE ORDER OF THE CIT(A), IS IN APPEAL BEFORE US. 5. AFTER CONSIDERING THE FACTS OF THE CASE AND THE ARGUMENTS OF BOTH THE SIDES, WE ARE OF THE OPINION THAT THE ISSUE IS SQUA RELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF ITAT IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2008-09. RESPECTFULLY FOLLOWING THE SAME, WE UPHOLD THE ORDER OF THE CIT(A) AND DISMISS THE REVENUES APPEAL. 6. IN THE RESULT, THE REVENUES APPEAL IS DISMISSED . ORDER PRONOUNCED IN THE COURT ON 22 ND JUNE, 2015 AT AHMEDABAD. SD/- SD/- (RAJPAL YADAV) JUDICIAL MEMBER (G.D. AGRAWAL) VICE-PRESIDENT AHMEDABAD; DATED 22/06/2015 BIJU T., PS ITA NO. 1947/AHD/2011 ACIT VS. HAZIRA LNG PVT LTD FOR AY 2009-10 5 *+ % *+ % *+ % *+ % !&, -*,& !&, -*,& !&, -*,& !&, -*,&/ COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. !' / THE RESPONDENT. 3. & #. / CONCERNED CIT 4. #. ( ) / THE CIT(A) 5. ,12 !& , , / DR, ITAT, AHMEDABAD 6. 2 4$ / GUARD FILE . *+# *+# *+# *+# / BY ORDER, TRUE COPY 5 55 5/ // / 6 6 6 6 ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD