DCIT, Jaipur V. NATIONAL HIGHWAY AUTHORITY OF INDIA, Jaipur

ITA 236/JPR/2012

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 5083 (ITAT-JAIPUR)
• Duration Of Justice: 4 year(s) 6 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-09-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2004-2005
• Appeal Filed On: 12-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P BHATEJA
• Assessee Lawyers: VIKAS RAJVANSHI C A DHK
• Keywords: Depreciation
• Section: 194C; 201(1)

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH HKKXPUN] YS[KK LNL; ,OA JH DQY HKKJR] U;KF;D LNL; DS LE{K BEFORE: SHRI BHAGCHAND, AM AND SHRI KUL BHARAT, JM VK;DJ VIHY LA-@ ITA NOS. 236, 237 & 238/JP/2012 FU/KZKJ.K O'K Z@ ASSESSMENT YEARS : 2004-05, 05-06 & 06-07. THE DEPUTY COMMISSIONER OF INCOME-TAX (TDS), JAIPUR. CUKE VS. NATIONAL HIGHWAY AUTHORITY OF INDIA LTD., (PIU), GIRNAR COLONY, GANDHI PATH, VAISHALI NAGAR, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. JPRN0 0336 A VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY : SHRI O.P. BHATEJA (ADDL. CIT) FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI VIKAS RAJVANSHI (CA) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 16.09.2016. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 23/09/2016. VKNS'K@ ORDER PER BENCH : THESE ARE THREE APPEALS BY THE REVENUE DIRECTED AGA INST THE SEPARATE ORDERS OF LD. CIT (A)-III, JAIPUR DATED 02.12.2011 PERTAIN ING TO ASSESSMENT YEARS 2004-05, 05-06 AND 06-07. ALL THESE APPEALS ARE TAKEN UP TO GETHER AND ARE BEING DISPOSED OFF BY WAY OF A CONSOLIDATED ORDER, FOR THE SAKE OF CONVENIENCE. 2. THE COMMON SOLITARY GROUND, EXCEPT CHANGE IN NAM E, RAISED BY THE REVENUE READS AS UNDER :- THE LD. CIT (A) HAS ERRED IN LAW AND ON FACTS IN HOLDING THAT THE ASSESSEE, M/S. NATIONAL HIGHWAY AUTHORITY OF INDIA (NHAI), WAS NOT LIABLE TO DEDUCT TAX AT SOURCE, IN TERMS OF THE PRO VISIONS OF SECTION 194C OF THE I.T. ACT, IN RESPECT OF THE CONTRACT MO NEY PAID BY NHAI TO THE CONCESSIONAIRE (M/S. GVK JAIPUR KISHANGARH EXPR ESSWAY PVT. LTD) UNDER THE NAME OF GRANT, IGNORING THE FACT THAT T HE SAID PAYMENT WAS TO BE FULLY APPLIED AND UTILIZED TOWARDS THE CONSTR UCTION OF THE PROJECT HIGHWAY AND, HENCE, IT WAS IN THE NATURE OF CONTRAC T MONEY PAYMENT. 2 ITA NOS. 236, 237 & 238/JP/2012 M/S. NATIONAL HIGHWAY AUTHORITY OF INDIA LTD.(PIU) JAIPUR. 3. BRIEFLY STATED THE FACTS ARE THAT A TDS VERIFICA TION WAS CARRIED OUT ON 10.02.2011. DURING THE COURSE OF VERIFICATION, IT W AS NOTICED THAT THE ASSESSEE HAS NOT MADE TDS AS PER SECTION 194C OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) WHICH APPEARED TO BE APPLIC ABLE IN EACH OF THE CONCESSIONAIRE, NAMELY, M/S. JAIPUR MAHUA TOLLWAY P VT. LTD., M/S. MADHUCON AGRA JAIPUR EXPRESSWAYS LTD. AND M/S. ORIENTAL PATHWAYS (AGRA) PVT. LTD. THE AO AFTER CONSIDERING THE TERMS OF THE AGREEMENT CONCLUDED TH AT THE ASSESSEE WAS REQUIRED TO DEDUCT TAX, EACH OF THE CONDITIONS PRECEDENT TO THE APPLICATION OF SECTION 194C HAVE BEEN MET AND ALL INGREDIENTS REQUIRED FOR THE APPLI CATION OF SECTION 194C ARE PRESENT IN THE INSTANT CASE. THEREFORE, HE HELD THAT ASSES SEE DEDUCTOR HAS FAILED TO DEDUCT AND DEPOSIT TDS ON THE PAYMENT OF CONTRACT MONEY TO CONCESSIONAIRES I.E. M/S. GVK, M/S. MADHUCON AND M/S. JAIPUR MAHUA TOLLWAYS P VT. LTD. TO THE EXTENT OF RS. 211 CRORES, RS. 96.00 CRORES AND RS. 99 CRORES RESP ECTIVELY AND ACCORDINGLY HELD THAT THE ASSESSEE DEDUCTOR IS DEEMED TO BE AN ASSESSEE I N DEFAULT IN RESPECT OF TDS WHICH OUGHT TO HAVE BEEN DEDUCTED ON SUCH PAYMENT A ND HE FURTHER CHARGED INTEREST THEREON UNDER SECTION 201(1A) OF THE ACT. THE ASSESSEE AGGRIEVED BY THIS ORDER, PREFERRED AN APPEAL BEFORE LD. CIT (A), WHO AFTER CONSIDERING THE SUBMISSIONS PARTLY ALLOWED THE APPEAL. WHILE PARTLY ALLOWING T HE APPEAL, THE LD. CIT (A) CONCLUDED THAT THE BOT PROJECTS ARE IN NATURE OF JO INT VENTURE OF PUBLIC AND PRIVATE PARTICIPATIONS, WHEREIN THE NHAI AND THE CONCESSION AIRES ENJOY THE POSITION OF CO- OWNERS, AS SUCH. MOREOVER, THE CONTRIBUTIONS MADE BY THE NHAI, ON BEHALF OF GOVT. OF INDIA, ARE ACTUALLY EQUITY PARTICIPATION TOWARDS THE COST OF THE PROJECT AND RIGHTLY TERMED AS GRANT IN THE RELEVANT AGREEMENTS. ACCOR DINGLY, HE HELD THAT SUCH 3 ITA NOS. 236, 237 & 238/JP/2012 M/S. NATIONAL HIGHWAY AUTHORITY OF INDIA LTD.(PIU) JAIPUR. CONTRIBUTIONS HAVE NO ESSENCE OR COLOUR OF ANY CONT RACTUAL PAYMENT, AS DEFINED U/S 194C, AS ERRONEOUSLY PERCEIVED BY THE AO. IT WAS F URTHER HELD THAT SINCE FOR THE NHAI IS, TIME BEING, NOT THE OWNER OF THE ASSETS, T ILL THE BOT AGREEMENT EXISTS, AND THE CONCESSIONAIRES ENJOY THE LEGAL AND PRACTICAL O WNERSHIP OF PRINCIPAL AND CONTRACT IN BETWEEN THEM AS OF NOW. ACCORDINGLY, HE HELD TH AT UNDER SUCH SITUATIONS, THE PROVISIONS OF SECTION 194C CANNOT BE APPLIED ON ANY PAYMENT RELEASED BY NHAI TO THE CONCESSIONAIRES, TERMED AS EQUITY CONTRIBUTION IN THE BOT AGREEMENT. HE DIRECTED THE AO TO DELETE THE DEMAND OF TAX OF RS. 2,11,00,000/- U/S 201(1) AND INTEREST THEREON OF RS. 1,96,23,000/- UNDER SECTION 201(1A). 4. AGGRIEVED BY THIS ORDER, THE REVENUE IS IN APPEA L BEFORE THE TRIBUNAL. 4.1 THE LD.CIT D/R VEHEMENTLY ARGUED THAT THE LD. C IT (A) WAS NOT JUSTIFIED IN DELETING THE ADDITION. HE SUBMITTED THAT THE ASSESS EE HAS GIVEN COLOUR OF CONTRACTUAL PAYMENT AS GRANT. HE SUBMITTED THAT THE PAYMENT MADE TO THE CONCESSIONAIRES IS NOTHING BUT A CONTRACTUAL PAYMENT. THEREFORE, THE ASSESSEE WAS REQUIRED TO DEDUCT TAX THEREON AS PER SECTION 194C OF THE ACT. THE AS SESSEE HAS GROSSLY FAILED TO DO SO, THEREFORE, THE AO WAS JUSTIFIED IN TREATING THE ASS ESSEE IN DEFAULT. 4.2. ON THE CONTRARY, THE LD. COUNSEL FOR THE ASSES SEE REITERATED THE SUBMISSIONS AS MADE IN THE WRITTEN SUBMISSION. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT AS PER CLAUSE XXIII OF THE AGREEMENT WITH M/S. GVK, THE TOTAL CONTRIBUTIONS MADE BY THE NHAI OF RS. 211 CRORES IN A.Y. 2004-05, 2005-06 & 2006-07 TOWARDS ITS SHARES IN RESPECT OF THE COST OF THE PROJECT. SUCH CONTRIB UTIONS HAVE BEEN NOMENCLATURE AS GRANT TO MEET OUT THE CAPITAL COST OF THE PROJEC T AND TREATED THE SAME AS PART OF THE SHARE HOLDERS FUNDS OR EQUITY SUPPORT FROM THE ABOVE SPECIFIC INTENTION OF THE APPELLANT AS DECLARED IN THE BOT AGREEMENTS. IT IS QUITE CLEAR THAT THE ABOVE 4 ITA NOS. 236, 237 & 238/JP/2012 M/S. NATIONAL HIGHWAY AUTHORITY OF INDIA LTD.(PIU) JAIPUR. CONTRIBUTIONS WERE NOT CONTRACTUAL PAYMENTS TO A CO NTRACTOR BUT AMOUNT TO CAPITAL PARTICIPATION BY A MEMBER OF JOINT VENTURE TOWARDS ITS EQUITY SUPPORT AS SUCH. OBVIOUSLY, IT IS FELT THAT THE PROVISIONS OF SECTIO N 194C DO NOT APPLY TO SUCH CAPITAL CONTRIBUTION/EQUITY PARTICIPATION MADE BY AN ASSESS EE, UNDER SUCH CIRCUMSTANCES. THE LD. COUNSEL REITERATED THAT THE PRINCIPAL NHAI AND THE CONCESSIONAIRES WERE REQUIRED TO BE CONTRIBUTED THE COSTS OF THE PROJECT AND ALSO THEY ARE ELIGIBLE TO SHARE THE REVENUE GENERATED OUT OF SUCH PROJECT AND THE E NTIRE INFLOW AND OUTFLOW OF REVENUE ARE BEING MANAGED THROUGH A COMMON ESCROW A CCOUNT. THUS, IN VIEW OF SUCH FINANCIAL ARRANGEMENT, THEIR RELATIONSHIP IS F OUND MORE OF LIKE PARTNERS/JOINT OWNERS OF A PROJECT THAN A CONTRACTOR AND CONTRACTO REE. MOREOVER, ANOTHER UNIQUE ARRANGEMENT I.E. OWNERSHIP OF THE ASSETS/PROJECT IS RESTED WITH THE CONCESSIONAIRES FOR INITIAL PHASE ONLY AND SUBSEQUENTLY REQUIRES TO BE PASSED ON TO THE NHAI ALSO SUGGESTS THAT SUCH UNUSUAL PHASE-WISE OWNERSHIP ARR ANGEMENT IS NOT AT ALL POSSIBLE. IN A NORMAL CONTRACTUAL AGREEMENT, HAVING SUCH UNIQ UE CHARACTERISTICS AND DIMENSIONS CANNOT BE SUBJECT MATTER OF SECTION 194C OF THE ACT, WHICH DEAL WITH SIMPLE CONTRACTUAL MATTERS. IN OTHER WORDS, THE PH ASE-WISE OWNERSHIP ARRANGEMENTS ENTERED BETWEEN BOT CONCESSIONAIRES AN D NHAI IS FOUND ABSOLUTELY DIFFERENT FROM THE RELATIONSHIP, NORMALLY THE NHAI IS HAVING WITH THE OTHER CONTRACTORS WHO ARE ENGAGED FOR ROAD CONSTRUCTION I N ROUTINE MANNER. SINCE THE NHAI AND THE BOT CONCESSIONAIRES ARE FOUND INVESTIN G IN THE PROJECT ARE LIKE CARRYING OUT ITS OWN BUSINESS AND THE SAME ARE NOT FOUND SIMILAR TO A RELATIONSHIP OF THE PRINCIPAL AND CONTRACTOR AS SUCH ACCORDINGLY, A NY CONTRIBUTION MADE BY NHAI IS OUT OF PURVIEW OF SECTION 194C. HE FURTHER SUBMITT ED THAT NORMALLY IN WORKS CONTRACT AGREEMENT, THE PRINCIPAL PAYS TO THE CONTR ACTOR AGAINST THE WORKS 5 ITA NOS. 236, 237 & 238/JP/2012 M/S. NATIONAL HIGHWAY AUTHORITY OF INDIA LTD.(PIU) JAIPUR. COMPLETED UNDER THE CONTRACTUAL OBLIGATION ON AGREE D UPON QUANTUM THEREOF. HOWEVER, IN THE PRESENT CASE THE CONTRIBUTION TOWAR DS COST OF THE PROJECT I.E. CONCESSIONAIRES ALSO. LIKE CO-OWNER OF THE PROJECT , THEY ARE ALSO ENTITLED TO SHARE THE REVENUE/INCOME RECEIVED AS TOLL COLLECTION, THR OUGH THE METHOD OF ESCROW ACCOUNTING SYSTEM. THESE PECULIAR FEATURES ALSO DI FFERENTIATE THE PRESENT AGREEMENTS FROM THE NORMAL WORKS CONTRACT AGREEMENT . ACCORDINGLY, THE AOS FINDINGS GIVEN IN THIS REGARD ARE IRRELEVANT AND IN CORRECT. HE FURTHER SUBMITTED THAT IN THE WORKS CONTRACT AGREEMENT, THE OWNERSHIP OF T HE PROJECT/ASSETS LIES WITH THE PRINCIPAL ONLY AND THE CONTRACTOR IS NOT HAVING ANY SORT OF RIGHTS, BE OF REAL OWNERSHIP OR BENEFICIAL IN NATURE, IN THIS REGARD. HOWEVER, IT CAN BE NOTICED THAT AS PER CLAUSE XXXVIII OF THE CONCESSION AGREEMENT, TIL L THE SPECIFIED TIME PERIOD THEREIN, THE BOT CONCESSIONAIRES WOULD HAVE THE OWN ERSHIP RIGHTS OF THE PROJECT AND ITS ASSETS FOR ALL PRACTICAL AND LEGAL PURPOSES. TH US THE CONCESSIONAIRES ARE NOT ONLY EXECUTORS OF THE PROJECT, BUT THEY ALSO ASSUMED STA TUS OF THE CO-OWNERS OF THE SAME. THE LD. COUNSEL SUBMITTED THAT IN THE CASE O F M/S. GVK, THE COORDINATE BENCH OF THE TRIBUNAL ALLOWED DEPRECIATION TO THE C ONCESSIONAIRES ON SUCH ASSETS WHILE TREATING THEM BENEFICIAL OWNERSHIP IN THE PRO JECT AS SUCH. HE SUBMITTED THAT THE AO HAS ERRED IN NOT APPRECIATING ESCROW ACCOUNT ING SYSTEM, AS SPECIFIED IN SUCH AGREEMENTS. BY DOING SO, THE AO HAS GIVEN A DIFFER ENT MEANING OR CONNOTATION TO SUCH PHRASES THAN THE OBVIOUS AND LITERAL MEANING O F SUCH ASPECTS. HE SUBMITTED THAT THE CARDINAL RULE OF INTERPRETATION OF LAW SU GGEST THAT WHEN THE MEANING OF THE WORDS/PHRASE USED IN A STATUTE IS CLEAR AND UNAMBIG UOUS, THEN SUCH WORDS TO BE GIVEN ITS PLAIN AND GRAMMATICAL MEANING AND EFFECT OF THE LAW HAS TO BE GIVEN IN SUCH CONTEXT ONLY. IN SIMPLER TERM, WHEN THERE IS N O AMBIGUITY IN THE LANGUAGE OF 6 ITA NOS. 236, 237 & 238/JP/2012 M/S. NATIONAL HIGHWAY AUTHORITY OF INDIA LTD.(PIU) JAIPUR. THE STATUTE, THEN SUCH PROVISION CANNOT BE INTERPRE TED IN DIFFERENT MANNER TO ARRIVE AT A PARTICULAR CONCLUSION AS SUCH. IN SUPPORT OF T HIS CONTENTION, THE LD. COUNSEL PLACED RELIANCE ON THE JUDGMENTS OF THE HONBLE SUP REME COURT REPORTED IN 306 ITR 277 (SC) AND 266 ITR 521 (SC). THE LD. COUNSEL THE N DREW OUR ATTENTION TO VARIOUS ARTICLES OF THE AGREEMENT AND VEHEMENTLY ARGUED THA T THE AO WAS NOT JUSTIFIED IN HOLDING THE ASSESSEE IN DEFAULT FOR NON DEDUCTION O F TAX UNDER SECTION 201(1) AND ALSO CHARGED INTEREST UNDER SECTION 201(1A) OF THE ACT. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. COUNSEL FURTHER SUBMITTED THAT ALL THE BOT CONCESSIONAIRES HAVE ALREADY DISCHARGED THE DUTY AN D DULY FILED THEIR RETURNS OF INCOME FOR ALL ASSESSMENT YEARS AFTER PAYING DUE TA XES, HENCE THERE IS NO LIABILITY ON THE DEDUCTOR FOR DEDUCTION OF TAX UNDER SECTION 194 C. THE LD. COUNSEL PLACED RELIANCE ON THE JUDGMENT OF HONBLE SUPREME COURT R ENDERED IN THE CASE OF HINDUSTAN COCA COLA BEVERAGE PVT. LTD. VS. CIT (200 7) 293 ITR 226 (SC). THEREFORE, HE SUBMITTED THAT EVEN OTHERWISE ALSO TH E DEMANDS SO RAISED DESERVE TO BE DELETED. 4.3. WE HAVE HEARD RIVAL CONTENTIONS, PERUSED THE M ATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELO W. THE ONLY ISSUE TO BE ADJUDICATED UNDER THE FACTS OF THE CASE WHETHER PRO VISIONS OF SECTION 194C OF THE ACT IS APPLICABLE OR NOT. FOR THE SAKE OF CLARITY, SECTION 194C IS REPRODUCED AS UNDER :- SECTION 194C. (1) ANY PERSON RESPONSIBLE FOR PAYING ANY SUM TO AN Y RESIDENT (HEREAFTER IN THIS SECTION REFERRED TO AS THE CONTRACTOR) FOR CARRYING OUT ANY WORK (INCLUDING SUPPLY OF LABOUR FOR CARRYING OUT ANY WORK) IN PURSUANCE O F A CONTRACT BETWEEN THE CONTRACTOR AND A SPECIFIED PERSON SHALL, AT THE TIM E OF CREDIT OF SUCH SUM TO THE ACCOUNT OF THE CONTRACTOR OR AT THE TIME OF PAYMENT THEREOF IN CASH OR BY ISSUE OF 7 ITA NOS. 236, 237 & 238/JP/2012 M/S. NATIONAL HIGHWAY AUTHORITY OF INDIA LTD.(PIU) JAIPUR. A CHEQUE OR DRAFT OR BY ANY OTHER MODE, WHICHEVER I S EARLIER, DEDUCT AN AMOUNT EQUAL TO (I) ONE PER CENT. WHERE THE PAYMENT IS BEING MADE O R CREDIT IS BEING GIVEN TO AN INDIVIDUAL OR A HINDU UNDIVIDED FAMILY ; (II) TWO PER CENT. WHERE THE PAYMENT IS BEING MADE OR CREDIT IS BEING GIVEN TO A PERSON OTHER THAN AN INDIVIDUAL OR A HINDU UNDIVIDE D FAMILY, OF SUCH SUM AS INCOME-TAX ON INCOME COMPRISED THERE IN. (2) WHERE ANY SUM REFERRED TO IN SUB-SECTION (1) IS CREDITED TO ANY ACCOUNT, WHETHER CALLED SUSPENSE ACCOUNT OR BY ANY OTHER N AME, IN THE BOOKS OF ACCOUNT OF THE PERSON LIABLE TO PAY SUCH INCOME, SUCH CREDI TING SHALL BE DEEMED TO BE CREDIT OF SUCH INCOME TO THE ACCOUNT OF THE PAYEE A ND THE PROVISIONS OF THIS SECTION SHALL APPLY ACCORDINGLY. (3) WHERE ANY SUM IS PAID OR CREDITED FOR CARRYING OUT ANY WORK MENTIONED IN SUB-CLAUSE (E) OF CLAUSE (IV) OF THE EXPLANATION, T AX SHALL BE DEDUCTED AT SOURCE (I) ON THE INVOICE VALUE EXCLUDING THE VALUE OF MAT ERIAL, IF SUCH VALUE IS MENTIONED SEPARATELY IN THE INVOICE ; OR (II) ON THE WHOLE OF THE INVOICE VALUE, IF THE VALU E OF MATERIAL IS NOT MENTIONED SEPARATELY IN THE INVOICE. (4) NO INDIVIDUAL OR HINDU UNDIVIDED FAMILY SHALL B E LIABLE TO DEDUCT INCOME-TAX ON THE SUM CREDITED OR PAID TO THE ACCOUNT OF THE C ONTRACTOR WHERE SUCH SUM IS CREDITED OR PAID EXCLUSIVELY FOR PERSONAL PURPOSES OF SUCH INDIVIDUAL OR ANY MEMBER OF HINDU UNDIVIDED FAMILY. (5) NO DEDUCTION SHALL BE MADE FROM THE AMOUNT OF A NY SUM CREDITED OR PAID OR LIKELY TO BE CREDITED OR PAID TO THE ACCOUNT OF, OR TO, THE CONTRACTOR, IF SUCH SUM DOES NOT EXCEED THIRTY THOUSAND RUPEES : PROVIDED THAT WHERE THE AGGREGATE OF THE AMOUNTS OF SUCH SUMS CREDITED OR PAID OR LIKELY TO BE CREDITED OR PAID DURING THE FINANCI AL YEAR EXCEEDS SEVENTY-FIVE THOUSAND RUPEES, THE PERSON RESPONSIBLE FOR PAYING SUCH SUMS REFERRED TO IN SUB- SECTION (1) SHALL BE LIABLE TO DEDUCT INCOME-TAX UN DER THIS SECTION. (6) NO DEDUCTION SHALL BE MADE FROM ANY SUM CREDITE D OR PAID OR LIKELY TO BE CREDITED OR PAID DURING THE PREVIOUS YEAR TO THE AC COUNT OF A CONTRACTOR DURING THE COURSE OF BUSINESS OF PLYING, HIRING OR LEASING GOO DS CARRIAGES, WHERE SUCH CONTRACTOR OWNS TEN OR LESS GOODS CARRIAGES AT ANY TIME DURING THE PREVIOUS YEAR AND FURNISHES A DECLARATION TO THAT EFFECT ALONG WI TH HIS PERMANENT ACCOUNT NUMBER, TO THE PERSON PAYING OR CREDITING SUCH SUM. (7) THE PERSON RESPONSIBLE FOR PAYING OR CREDITING ANY SUM TO THE PERSON REFERRED TO IN SUB-SECTION (6) SHALL FURNISH, TO THE PRESCRI BED INCOME-TAX AUTHORITY OR THE PERSON AUTHORISED BY IT, SUCH PARTICULARS, IN SUCH FORM AND WITHIN SUCH TIME AS MAY BE PRESCRIBED. EXPLANATION - FOR THE PURPOSES OF THIS SECTION, (I) SPECIFIED PERSON SHALL MEAN, 8 ITA NOS. 236, 237 & 238/JP/2012 M/S. NATIONAL HIGHWAY AUTHORITY OF INDIA LTD.(PIU) JAIPUR. (A) THE CENTRAL GOVERNMENT OR ANY STATE GOVERNMENT ; OR (B) ANY LOCAL AUTHORITY ; OR (C) ANY CORPORATION ESTABLISHED BY OR UNDER A CENTR AL, STATE OR PROVINCIAL ACT ; OR (D) ANY COMPANY ; OR (E) ANY CO-OPERATIVE SOCIETY ; OR (F) ANY AUTHORITY, CONSTITUTED IN INDIA BY OR UNDER ANY LAW, ENGAGED EITHER FOR THE PURPOSE OF DEALING WITH AND SATISFYING THE NEED FOR HOUSING ACCOMMODATION OR FOR THE PURPOSE OF PLANNING, DEVELOPMENT OR IMPROVEMENT OF CITIES, TOWNS AND VILLAGES, OR FOR BOTH ; OR (G) ANY SOCIETY REGISTERED UNDER THE SOCIETIES REGI STRATION ACT, 1860 (21 OF 1860) OR UNDER ANY LAW CORRESPONDING TO THAT ACT IN FORCE IN ANY PART OF INDIA ; OR (H) ANY TRUST ; OR (I) ANY UNIVERSITY ESTABLISHED OR INCORPORATED BY O R UNDER A CENTRAL, STATE OR PROVINCIAL ACT AND AN INSTITUTION DECLARED TO BE A UNIVERSITY UNDER SECTION 3 OF THE UNIVERSITY GRANTS COMMISSION ACT, 1956 (3 OF 1956) ; OR (J) ANY GOVERNMENT OF A FOREIGN STATE OR A FOREIGN ENTERPRISE OR ANY ASSOCIATION OR BODY ESTABLISHED OUTSIDE INDIA ; OR (K) ANY FIRM ; OR (L) ANY PERSON, BEING AN INDIVIDUAL OR A HINDU UNDI VIDED FAMILY OR AN ASSOCIATION OF PERSONS OR A BODY OF INDIVIDUALS, IF SUCH PERSON , (A) DOES NOT FALL UNDER ANY OF THE PRECEDING SUB-CL AUSES ; AND 9 ITA NOS. 236, 237 & 238/JP/2012 M/S. NATIONAL HIGHWAY AUTHORITY OF INDIA LTD.(PIU) JAIPUR. (B) IS LIABLE TO AUDIT OF ACCOUNTS UNDER CLAUSE (A) OR CLAUSE (B) OF SECTION 44AB DURING THE FINANCIAL YEAR IMMEDIATELY PRECEDING THE FINANCIAL YEAR IN WHICH SUCH SUM IS CREDITED OR PAID TO THE ACCOUNT OF THE CONTR ACTOR ; (II) GOODS CARRIAGE SHALL HAVE THE MEANING ASSIGN ED TO IT IN THE EXPLANATION TO SUB-SECTION (7) OF SECTION 44AE ; (III) CONTRACT SHALL INCLUDE SUB-CONTRACT ; (IV) WORK SHALL INCLUDE (A) ADVERTISING ; (B) BROADCASTING AND TELECASTING INCLUDING PRODUCTI ON OF PROGRAMMES FOR SUCH BROADCASTING OR TELECASTING ; (C) CARRIAGE OF GOODS OR PASSENGERS BY ANY MODE OF TRANSPORT OTHER THAN BY RAILWAYS ; (D) CATERING ; (E) MANUFACTURING OR SUPPLYING A PRODUCT ACCORDING TO THE REQUIREMENT OR SPECIFICATION OF A CUSTOMER BY USING MATERIAL PURCH ASED FROM SUCH CUSTOMER, BUT DOES NOT INCLUDE MANUFACTURING OR SUPPLYING A P RODUCT ACCORDING TO THE REQUIREMENT OR SPECIFICATION OF A CUSTOMER BY USING MATERIAL PURCHASED FROM A PERSON, OTHER THAN SUCH CUSTOMER. A BARE READING OF ABOVE SECTION, MAKES IT EXPLICIT THAT ANY PERSON RESPONSIBLE BEING THE CONTRACTOR FOR CARRYING OUT ANY WORK IN PURSUAN CE OF A CONTRACT BETWEEN THE CONTRACTOR AND A SPECIFIED PERSON SHALL, AT THE TIM E OF CREDIT OF SUCH SUM TO THE ACCOUNT OF THE CONTRACTOR OR AT THE TIME OF PAYMENT THEREOF IN CASH OR BY ISSUE OF A 10 ITA NOS. 236, 237 & 238/JP/2012 M/S. NATIONAL HIGHWAY AUTHORITY OF INDIA LTD.(PIU) JAIPUR. CHEQUE OR DRAFT OR ANY OTHER MODE, WHICHEVER IS EAR LIER, DEDUCT AN AMOUNT EQUAL TO TWO PER CENT WHERE THE PAYMENT IS BEING MADE OR CRE DIT IS BEING GIVEN TO A PERSON OTHER THAN AN INDIVIDUAL OR A HINDU UNDIVIDED FAMIL Y OF SUCH SUM AS INCOME-TAX FOR A.Y. 2011-12 OF SUCH SUM AS INCOME COMPRISED THEREI N. THEREFORE, SPECIFIED PERSON THE DEDUCTOR HEREIN I.E. NHAI IS REQUIRED TO DEDUCT TAX IN THE EVENT THE PAYMENT IS MADE TO THE CONTRACTOR IN PURSUANCE OF A CONTRACT. IN THE CASE IN HAND, WE NEED TO EXAMINE WHETHER THE PAYMENTS MADE BY THE NHAI UNDER THE HEAD GRANT TO M/S. GVK KISHANGARH EXPRESSWAY PVT. LTD. WAS LIABLE TO D EDUCTION OF TAX OR NOT. UNDISPUTED FACTS REMAIN THAT THE NHAI HAS MADE PAYM ENT TO M/S. GVK KISHANGARH EXPRESSWAY PVT. LTD. UNDER THE HEAD GRANT. THE A O TREATED SUCH PAYMENTS AS PAYMENT MADE UNDER THE CONTRACT. THE AO EXAMINED VA RIOUS TERMS OF THE AGREEMENT BETWEEN NHAI AND M/S. GVK KISHANGARH EXPR ESSWAY PVT. LTD. AND HAS ALSO REPRODUCED CERTAIN TERMS OF AGREEMENT. THE AO , THEREFORE, TREATED THE ASSESSEE IN DEFAULT. HOWEVER, THE LD. CIT (A) AFTE R EXAMINING THE TERMS OF AGREEMENT CAME TO THE CONCLUSION THAT SUCH PAYMENTS ARE NOT IN THE NATURE OF PAYMENT MADE TO THE CONTRACTOR. BY DOING SO, HE OBS ERVED IN PARA 3.3.1 OF HIS ORDER AS UNDER :- 3.3.1. IN THE LIGHT OF THE ABOVE DETAILED DELIBER ATIONS AND SUBMISSIONS, I HAVE REACHED TO FOLLOWING FINDINGS C UM OBSERVATIONS AND ALSO THE IMPLICATION THEREOF, TOWARDS THE ISSUE UNDER CONSIDERATION :- I. NATURE OF AGREEMENT : AS DISCUSSED ABOVE, THE NHAI HAS ENTERED IN FIVE BOT PROJECTS WITH DIFFERENT CONCESS IONAIRES TO BUILD AND MAINTAIN ROADS ON DIFFERENT NATIONAL HIGH WAYS. DUE TO THE PECULIARITY OF SUCH BOT AGREEMENTS, THE NATURE AND COMPLEXION OF SUCH PROJECTS ARE FOUND RATHER DIFFER ENT THAN THE NORMAL WORKS-CONTRACT, CARRIED OUT BY A CONTRACTOR, ON THE BEHEST OF THE PRINCIPAL. FROM THE ESSENCE OF DIFFER ENT CLAUSES OF 11 ITA NOS. 236, 237 & 238/JP/2012 M/S. NATIONAL HIGHWAY AUTHORITY OF INDIA LTD.(PIU) JAIPUR. THE CONCESSION/BOT AGREEMENTS, IT IS EVIDENT THAT T HE PRINCIPAL (NHAI) AND CONCESSIONAIRES WERE REQUIRED TO PARTICI PATE IN PROJECT COST OF THE HIGHWAYS AND THEY ARE ALSO ENTI TLED TO SHARE THE REVENUE OF SUCH PROJECT, RECEIVED IN THE FORM O F TOLL COLLECTION ETC. FROM THE ABOVE UNIQUE FEATURES OF T HE CONCESSION AGREEMENTS, IT IS FOUND MORE LIKE A JO INT VENTURE IN BETWEEN INTERESTED PARTIES TO ACCOMPLISH SPECIFIC P ROJECT AND MAKING EQUITY PARTICIPATIONS, BY ALL SUCH PARTIES A LSO. A NORMAL CONTRACT AGREEMENT DOES NOT HAVE SUCH FEATURES, THE REFORE, I AM AGREED WITH THE CONTENTION OF THE LD. AR, THAT T HE PROJECTS UNDER CONSIDERATION ARE NOT OF NATURE OF WORKS-CONT RACT, AS PERCEIVED BY THE AO, BUT KIND OF JOIN VENTURE, AS S UCH. THUS THE PROVISIONS OF SEC. 194C WOULDNT ATTRACT ON PAYMENT MADE TOWARDS SUCH VENTURE. II. NATURE OF CONTRIBUTION OF NHAI: AS PER THE CLAUSE XXIII OF THE AGREEMENT WITH M/S. GVK, THE TOTAL CONTRIBUTION S MADE BY THE NHAI OF RS. 211 CRORES, IN A.Y. 2004-05, 2005-0 6 & 2006- 07, TOWARDS ITS SHARES, I.R.O., THE COST OF THE PRO JECT. SUCH CONTRIBUTIONS HAVE BEEN NOMENCLATURE AS GRANT TO MEET OUT THE CAPITAL COST OF THE PROJECT AND TREATED THE SAME AS PART OF THE SHARE HOLDER FUNDS OR EQUITY SUPPORT. FROM THE ABOV E SPECIFIC INTENTION OF THE APPELLANT, AS DECLARED IN THE BOT AGREEMENTS ITSELF, IT IS QUITE CLEAR THAT THE ABOVE CONTRIBUTI ONS WERE NOT A CONTRACTUAL PAYMENTS TO A CONTRACTOR BUT AMOUNT TO CAPITAL PARTICIPATION BY A MEMBERS OF JOINT VENTURE TOWARDS ITS EQUITY SUPPORT AS SUCH. OBVIOUSLY, IT IS FELT THAT THE PRO VISIONS OF SEC. 194C DO NOT APPLY TO SUCH CAPITAL CONTRIBUTION/EQUI TY PARTICIPATION MADE BY AN ASSESSEE, UNDER SUCH CIRCU MSTANCES. III. INTRA-PARTIES RELATIONSHIP : - TO ASCERTAIN THE ACT UAL NATURE AND CHARACTERISTICS OF THE RELATIONSHIP IN BETWEEN THE NHAI AND CONCESSIONAIRES, THE RELEVANT CLAUSES OF THE AGREEM ENT HAVE BEEN FOUND QUITE RELEVANT IN THIS REGARD. AS STATED ABOVE THE PRINCIPAL (NHAI) AND THE CONCESSIONAIRES WERE REQUI RED TO BE CONTRIBUTED THE COSTS OF THE PROJECT AND ALSO THEY ARE ELIGIBLE TO SHARE THE REVENUE GENERATED OUT OF SUCH PROJECT AND THE ENTIRE INFLOW & OUTFLOW OF REVENUE ARE BEING MANAGED THROU GH A COMMON ESCROW ACCOUNT. THUS, IN VIEW OF SUCH FINANC IAL ARRANGEMENT, THEIR RELATIONSHIP IS FOUND MORE OF LI KE PARTNERS/JOINT OWNERS OF A PROJECT THAN A CONTRACTO R AND CONTRACTOREE AS SUCH. MOREOVER, ANOTHER UNIQUE ARRA NGEMENT I.E. THE OWNERSHIP OF THE ASSETS/PROJECT IS RESTED WITH THE CONCESSIONAIRES FOR INITIAL PHASE ONLY AND SUBSEQUE NTLY REQUIRES TO BE PASSED ON TO THE NHAI ALSO SUGGESTS THAT SUCH UNUSUAL PHASE-WISE OWNERSHIP ARRANGEMENT IS NOT AT ALL POSS IBLE IN A NORMAL CONTRACTUAL AGREEMENT. THUS, SUCH BOT AGREEM ENTS, 12 ITA NOS. 236, 237 & 238/JP/2012 M/S. NATIONAL HIGHWAY AUTHORITY OF INDIA LTD.(PIU) JAIPUR. HAVING SUCH UNIQUE CHARACTERSTICS AND DIMENSIONS CA NT BE SUBJECT MATTER OF SEC. 194C OF THE ACT, WHICH DEAL WITH SIMPLE CONTRACTUAL MATTERS. IN OTHER WORDS, THE PHASE WIS E OWNERSHIP- ARRANGEMENTS ENTERED BETWEEN BOT CONCESSIONAIRES AN D NHAI IS FOUND ABSOLUTELY DIFFERENT FROM THE RELATIONSHIP , NORMALLY NHAI IS HAVING WITH THE OTHER CONTRACTORS WHO ARE E NGAGED FOR ROAD CONSTRUCTION IN ROUTINE MANNER. SINCE THE NHAI AND THE BOT CONCESSIONAIRES ARE FOUND INVESTING IN THE PROJ ECT, AS CO- OWNERS OF THE JOINT VENTURE, THUS, THEIR ALL ACTS I N THIS REGARD ARE LIKE CARRYING OUT ITS OWN BUSINESS AND THE SAME ARE NOT FOUND SIMILAR TO A RELATIONSHIP OF THE PRINCIPAL AND CONT RACTOR AS SUCH. ACCORDINGLY, IN MY CONSIDERED OPINION, ANY CONTRIBU TION MADE BY THE NHAI AS CO-OWNER OF SUCH PROJECT IS OUT OF PREV IEW OF SEC. 194C AS SUCH. IV. REVENUE SHARING MODEL : - IT IS A MATTER OF FACT TH AT NORMALLY IN WORKS-CONTRACT AGREEMENT; THE PRINCIPLE PAYS TO THE CONTRACTOR AGAINST THE WORKED COMPLETED UNDER THE CONTRACTUAL OBLIGATION ON AGREED UPON QUANTUM THEREOF. HOWEVER, IN THE PRE SENT CASE THE CONTRIBUTION TOWARDS COST OF PROJECT WAS NOT ON LY BORNE BY THE PRINCIPAL (NHAI) BUT ALSO THE EXECUTORS OF THE PROJECT I.E. CONCESSIONAIRES ALSO. LIKE CO-OWNERS OF THE PROJECT , THEY ARE ALSO ENTITLED TO SHARE THE REVENUE/INCOME, RECEIVED AS TOLL COLLECTION, THROUGH THE METHOD OF ESCROW ACCOUNTING SYSTEM. THESE PECULIAR FEATURES ALSO DIFFERENTIATE THE PRES ENT AGREEMENTS FROM THE NORMAL WORKS-CONTRACT AGREEMENT . ACCORDINGLY THE AOS FINDINGS GIVEN THIS REGARD ARE FOUND IRRELEVANT AND INCORRECT ALSO. ON THIS GROUND, ALSO THE EQUITY CONTRIBUTION MADE BY THE APPELLANT IS CONSIDERED AS CONTRACTUAL PAYMENT. V. OWNERSHIP OF THE PROJECT :- NORMALLY, IT CAN BE SEE N THAT IN THE WORKS-CONTRACT AGREEMENT, THE OWNERSHIP OF THE PROJ ECT/ASSETS LIES WITH THE PRINCIPAL ONLY AND THE CONTRACTOR IS NOT HAVING ANY SORT OF RIGHTS, BE OF REAL OWNERSHIP OR BENEFICIAL IN NATURE, IN THIS REGARD. HOWEVER, IT IS FOUND THAT AS PER CLAUSE XX XVIII OF THE CONCESSION AGREEMENT, TILL THE SPECIFIED TIME PERIO D THEREIN, THE BOT CONCESSIONAIRES WOULD HAVE THE OWNERSHIP RIGHTS OF THE PROJECT AND ITS ASSETS FOR ALL PRACTICAL AND LEGAL PURPOSES. THUS THE CONCESSIONAIRES ARE NOT ONLY EXECUTORS OF THE P ROJECT, BUT THEY ALSO ASSUMED STATUS OF THE CO-OWNERS OF THE SA ME. THE ABOVE PERCEPTION IS ALSO FOUND SUPPORT FROM THE SUB SEQUENT DECISION OF THE HONBLE ITAT JAIPUR IN THE CONCESSI ONAIRE I.E. M/S. GVK CASE, WHEREIN THEY HAVE ALSO UPHELD THE CL AIM OF DEPRECIATION ON SUCH ASSETS BY THE CONCESSIONAIRE, WHILE TREATING THEM HAVING BENEFICIAL OWNERSHIP IN THE PR OJECT AS SUCH. MOREOVER, AS DISCUSSED ABOVE, AS PER CLAUSE XXXIII OF 13 ITA NOS. 236, 237 & 238/JP/2012 M/S. NATIONAL HIGHWAY AUTHORITY OF INDIA LTD.(PIU) JAIPUR. THE AGREEMENT, THE OWNERSHIP OF SUCH PROJECT IS TO BE TRANSFERRED TO THE NHAI, BY WAY OF SALE AGREEMENT O F SUCH PROPERTIES, AFTER CESSATION OF THE CONCESSION AGRE EMENTS. THIS PARTICULAR UNUSUAL TYPE OF OWNERSHIP ASPECT IS NEVE R POSSIBLE IN ORDINARY WORKS-CONTRACT AND IT COULD BE RESULT OF O NLY OF A JOINT VENTURE OR CO-OWNERSHIP PROJECT. ACCORDINGLY ANY CO NTRIBUTION MADE TO SUCH JOINTLY OWNED PROJECT BY THE APPELLANT CAN NOT BE A CONTRACTUAL PAYMENT COVERED U/S 194C, UNDER THE G IVEN CIRCUMSTANCES. VI. THE AOS APPROACH/FINDINGS: - FROM THE IMPUGNED ORD ER, IT IS FELT THAT THE AO HAS DEALT WITH THE RELEVANT IMPORT ANT ISSUES OF THE CONCESSION AGREEMENTS IN RATHER SUPERFICIAL A ND UNUSUAL MANNERS AND AT TIMES HE BRUSHED ASIDE THE APPARENT IMPORTANT ASPECTS LIKE NATURE OF GRANTS, EQUITY PARTICIPATION BY THE APPELLANT, ESCROW ACCOUNTING SYSTEM, AS SPECIFIED I N SUCH AGREEMENTS AND FOUND RELEVANT TO DECIDE THE MATTER UNDER CONSIDERATION. WHILE DOING SO, EVEN THE AO HAS GIVE N A DIFFERENT MEANING OR CONNOTATION TO SUCH PHRASES THEN THE OBV IOUS AND LITERAL MEANING OF SUCH ASPECTS. MOREOVER, IN VIEW OF THE DIVERGENT UNDERSTANDING OF RELEVANT CLAUSES OF THE AGREEMENTS ON THE PART OF THE AO AND LD. AR, AND TO PERCEIVE T HE EXACT SCOPE AND AMBIT OF THE ABOVE PHRASES/PROVISIONS, TH E HELP OF THE OF PRINCIPAL OF INTERPRETATION OF LAW WAS CON SIDERED HELPFUL AND ESSENTIAL, UNDER THE GIVEN CIRCUMSTANCES. THE CARDINAL RULE OF INTERPRETATION OF LAW SUGGESTS THAT WHEN THE ME ANING OF THE WORDS/PHRASE USED IN A STATUTE IS CLEAR AND UNAMBIG UOUS, THEN SUCH WORDS TO BE GIVEN ITS PLAIN AND GRAMMATICAL ME ANING AND EFFECT OF THE LAW HAS TO BE GIVEN IN SUCH CONTEXT O NLY. IN SIMPLER TERM, WHEN THERE IS NO AMBIGUITY IN THE LAN GUAGE OF THE STATUTE, THEN SUCH PROVISION CAN NOT BE INTERPRETED IN DIFFERENT MANNER TO ARRIVE AT A PARTICULAR CONCLUSION AS SUCH . IN THIS REGARD THE RELIANCE IS PLACED ON FOLLOWING DECISION S :- - DHARMENDRA TEXTILE LTD. 306 ITR 277 (SC) - IPCA LABORATORY LTD. 266 ITR 521 (SC) THOUGH THE ABOVE DECISIONS WERE GIVEN IN CONTEXT OF INTERPRETATION OF A STATUTE LIKE INCOME TAX ACT, HO WEVER, IN MY CONSIDERED OPINION, THE SAME ANALOGY CAN BE APPLIED EVEN IN UNDERSTANDING THE MEANING AND ESSENCE OF ANY PHRASE USED IN A COMMERCIAL AGREEMENT ALSO. ACCORDINGLY IT IS FELT T HAT IF THE TERMS LIKE GRANT, EQUITY PARTICIPATION ETC., USED I N THE BOT AGREEMENTS, FOR THE CONTRIBUTION MADE BY THE APPELL ANT TO THE 14 ITA NOS. 236, 237 & 238/JP/2012 M/S. NATIONAL HIGHWAY AUTHORITY OF INDIA LTD.(PIU) JAIPUR. CONCESSIONAIRES, WERE GIVEN THEIR LITERAL AND ORDIN ARY MEANING AND CONTEXT, THEN OBVIOUSLY SUCH PAYMENTS COULD NOT BE CONSIDERED AS A CONTRACTUAL PAYMENT AND THEREFORE, THE SAME WOULD NOT FALL IN THE NET OF SEC. 194C OF THE ACT. ACCORDINGLY, IT IS PERCEIVED THAT THE AO WAS NOT JUSTIFIED IN GIVIN G A DIFFERENT MEANING AND CONTEXT TO SUCH CRUCIAL PHRASES/ISSUES LIKE GRANTS, EQUITY PARTICIPANT, ESCROW ACCOUNTING SYSTEM ETC., IN OTHER WAY THEN WHAT THEY STAND FOR IN NORMAL CIRCUMSTANCES, A PPARENTLY TO ARRIVE AT A PRECONCEIVED CONCLUSION. VII) MISC. ASPECTS :- A) AS PER THE DEFINITION CLAUSES OF THE CONCESSION AGREEMENTS, THE DEFINITION OF CONTRACTOR HAS BEEN GIVEN AS CONTRACTOR OR CONTRACTORS, IF ANY, WHICH WHOM THE CONCESSIONAIRES HAS ENTERED INTO ALL OR ANY OF THE PROJECT AGREEMENTS. THIS ALSO SHOWS THAT THE POSITION/STAT US OF THE CONCESSIONAIRES IN THE CURRENT PROJECTS ARE OF LIKE CO-OWNERS, WHO CAN APPOINT THE CONTRACTOR TO ACCOMPLISH ANY PA RT OF THE PROJECTS AND NOT THE STATUS OF THE CONTRACTOR IT SE LF, AS PERCEIVED BY THE AO. B) FROM THE DETAILS SUBMISSIONS OF THE LD. AR, IT IS A LSO FELT THAT HE HAD REASONABLY AND SUCCESSFULLY ADDRESSED ALL TH E ISSUES, CONTROVERSIES AND REBUTTAL MADE BY THE AO IN THE IM PUGNED ORDER AND IN THE REMAND REPORT SUBMITTED BY HIM. TH US, IT IS FELT THE LD. AR HAS CLEARLY ESTABLISHED HIS POINT O F VIEWS, IN SATISFACTORY MANNER AND THUS LEFT NO GRAY AREAS, IN THIS REGARD, TO PROVE THE PROVISIONS OF SEC. 194C CANT BE APPLIED IN THE PRESENT CASE. IN THE LIGHT OF THE ABOVE FACTUAL AND LEGAL DELIBER ATION AND ALSO FROM THE IN-DEPTH ANALYSIS OF THE RIVAL STANDS OF T HE AO AND THE LD. AR, I AM AGREED WITH THE LD. AR THAT THE BOT PR OJECTS ARE IN NATURE OF JOINT VENTURE OF PUBLIC AND PRIVATE PARTI CIPATIONS, WHEREIN THE HAHI AND THE CONCESSIONAIRES ENJOY THE POSITION OF CO-OWNERS, AS SUCH. MOREOVER, THE CONTRIBUTIONS MAD E BY THE NHAI, ON BEHALF OF GOVT. OF INDIA, ARE ACTUALLY EQU ITY PARTICIPATION TOWARDS THE COST OF THE PROJECT AND R IGHTLY TERMED 15 ITA NOS. 236, 237 & 238/JP/2012 M/S. NATIONAL HIGHWAY AUTHORITY OF INDIA LTD.(PIU) JAIPUR. AS GRANT IN THE RELEVANT AGREEMENTS. FOR THE REAS ONS DISCUSSED IN THE EARLIER PARAS, IT IS ALSO HELD THT SUCH CONT RIBUTIONS HAVE NO ESSENCE OR COLOUR OF ANY CONTRACTUAL PAYMENT, AS DE FINED U/S 194C, AS ERRONEOUSLY PERCEIVED BY THE AO. IT IS ALS O HELD THAT SINCE FOR THE NHAI IS, TIME BEING, NOT THE OWNER OF THE ASSETS, TILL THE BOT AGREEMENT EXISTS, AND THE CONCESSIONAI RES ENJOY THE LEGAL AND PRACTICAL OWNERSHIP OF SUCH PROJECT ASSET S, THEREFORE, THERE CAN NOT BE A CASE OF ANY RELATIONSHIP OF PRIN CIPAL AND CONTRACT IN BETWEEN THEM AS OF NOW. ACCORDINGLY, UN DER SUCH SITUATIONS, THE PROVISIONS OF SEC. 194C CAN NOT APP LIED ON ANY PAYMENT RELEASED BY NHAI TO THE CONCESSIONAIRES, TE RMED AS EQUITY CONTRIBUTION IN THE BOT AGREEMENT. IN VIEW O F THE ABOVE DETAILED DISCUSSION, I AM ALSO AGREED WITH THE CONT ENTION OF THE LD. AR THAT THE CONTRIBUTIONS MADE BY THE NHAI IN T HE FORM OF GRANT EQUITY PARTICIPATION, ARE OF CAPITAL CONTRIBU TION IN NATURE TOWARDS THE JOINT VENTURE WITH THE CONCESSIONAIRES, THUS THE SEC 194C DOES NOT APPLY ON SUCH PAYMENTS. ACCORDINGLY, THE DEMAND OF RS. 2,11,00,000/- RAISED U/S 201(1) AND O F RS. 1,96,23,000/- U/S 201(1A) ARE FOUND UNCALLED FOR AN D UN- SUSTAINABLE UNDER THE GIVEN LEGAL AND FACTUAL CIRCU MSTANCES THE SAME ARE HEREBY DELETED. CONSEQUENTLY, THIS GROUND OF APPEAL IS UPHELD. THE CONTENTION OF THE ASSESSEE IN SUBSTANCE IS THAT FROM THE TERMS OF THE AGREEMENT IT CAN BE INFERRED THAT THE PAYMENTS MADE TO THE CO NCESSIONAIRES IN THE FORM OF GRANT WOULD NOT ATTRACT THE PROVISIONS OF SECTIO N 194C. ESSENTIALLY THESE PAYMENTS ARE IN THE NATURE OF CONTRIBUTION IN THE JOINT VENT URE. WE HAVE GONE THROUGH THE TERMS OF THE AGREEMENT. THE INFERENCE DRAWN BY THE AO IS THAT THE GRANT IS NOTHING BUT PAYMENT TO THE CONTRACTOR IS MIS-PLACED. AS PE R SECTION 194C, THE PAYMENT IS REQUIRED TO BE MADE TO THE CONTRACTOR BUT IN THE GI VEN CASE PAYMENT IS NOT MADE TO THE CONTRACTOR. THE AGREEMENT CANNOT BE STATED TO B E PURELY A CONTRACT AGREEMENT 16 ITA NOS. 236, 237 & 238/JP/2012 M/S. NATIONAL HIGHWAY AUTHORITY OF INDIA LTD.(PIU) JAIPUR. BUT IT IS A CONTRACT AGREEMENT OF JOINT VENTURE. H ENCE, WE DO NOT SEE ANY INFIRMITY IN THE ORDER OF LD. CIT (A), THEREFORE, THE SAME IS HEREBY UPHELD. 5. IN THE RESULT, APPEALS OF THE REVENUE ARE DISMIS SED. ORDER PRONOUNCED IN THE OPEN COURT ON 23/09/2016. SD/- SD/- ( HKKXPUN ( DQY HKKJR ) ( BHAGCHAND) ( KUL BHARAT ) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 23/09/2016. DAS/ VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- THE DCIT (TDS) JAIPUR. 2. THE RESPONDENT NATIONAL HIGHWAY AUTHORITY OF I NDIA, JAIPUR. 3. THE CIT(A). 4. THE CIT, 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 236(3)/JP/2012) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR