Asansol Durgapur Development Authority, Durgapur V. ITO (TDS), Durgapur, Durgapur

ITA 279/KOL/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1704 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 6 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 12-06-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 24-02-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Diversion of income; Non-deduction of tax; Corroborative evidences; Capital expenditure
• Section: 133A; 12A; 194C; 201(1); 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : KOLKATA [BEFORE HONBLE SHRI ABY. T. VARKEY, JM & SHRI M. BALAGANESH, AM ] I.T.A NOS. 279 & 280/ KOL/2016 ASSESSMENT YEARS : 2010- 11 TO 2011-12 ASANSOL DURGAPUR DEVELOPMENT AUTHORITY -VS- ITO (TDS), DURGAPUR [PAN: AAALA 0733 G] (APPELLANT) (RESPONDENT) FOR THE APPELLANT SHRI ARNAB CHAKRABORTY, ADVOCATE SHRI ABHIJIT BISWAS, ADVOCATE FOR THE RESPONDENT : SHRI SAURABH KUMAR, ADDL . CIT DR DATE OF HEARING : 28.08.2017 DATE OF PRONOUNCEMENT : 08.09.2017 ORDER PER M.BALAGANESH, AM 1. THESE APPEALS ARE DIRECTED AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) DURGAPUR [IN SHORT THE LD CITA] IN APPEAL NO. 39/CIT(A)/DGP/2013- 14 DATED 22.12.2015 AND APPEAL NO. 76/CIT(A)/DGP/20 14-15 DATED 22.12.2015 AGAINST THE ORDER OF THE LEARNED INCOME TAX OFFICER, TDS, DURGAPUR [ IN SHORT THE LD AO] TREATING THE ASSESSEE AS ASSESSEE IN DEFAULT UNDE R SECTION [IN SHORT U/S] 201(1) / 201(1A) OF THE INCOME TAX ACT, 1961 (HEREINAFTER RE FERRED TO AS THE ACT) DATED 26.3.2013 AND 28.3.2014 FOR THE ASST YEARS 2010-11 AND 2011-12 RESPECTIVELY. AS THE ISSUES INVOLVED IN BOTH THE APPEALS ARE IDENTICAL, THE SAME ARE TAKEN UP TOGETHER AND DISPOSED OFF BY THIS COMMON ORDER FOR THE SAKE OF C ONVENIENCE. 2. THE FIRST ISSUE TO BE DECIDED IN THESE APPEALS IS AS TO WHETHER THE ASSESSEE COULD BE TREATED AS AN ASSESSEE IN DEFAULT U/S 201 / 201(1A) OF THE ACT IN RESPECT OF PAYMENTS RELEASED TO GUJARAT ENVIRO PROTECTION AND INFRASTRU CTURE LIMITED [ IN SHORT GEPIL] , IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 2 ITA NOS.279 & 280/KOL/2016 ASANSOL DURGAPUR DEVELOPMENT AUTHORITY A.YRS.2010-11 TO 2011-12 2 2.1. THE BRIEF FACTS OF THIS ISSUE IS THAT A TDS S URVEY U/S 133A OF THE ACT WAS CONDUCTED IN THE OFFICE PREMISES OF ASSESSEE SIMULT ANEOUSLY AT DURGAPUR AS WELL AS AT ASANSOL ON 12.10.2012. DURING THE COURSE OF SURVEY PROCEEDINGS, IT WAS FOUND THAT THE BOOKS OF ACCOUNTS FROM FINANCIAL YEAR 2009-10 ONWAR DS HAD NOT BEEN AUDITED AND ACCOUNTS WERE YET TO BE FINALIZED. NUMBER OF DOCU MENTS WERE IMPOUNDED BEARING IDENTIFICATION MARKS ADDA -01 TO ADDA 40 (IMPOUND ED FROM DURGAPUR OFFICE) AND ADDA-A-01 TO ADDA-A-11 (IMPOUNDED FROM ASANSOL OFFI CE). THE ASSESSEE SUBMITTED A QUARTER WISE WRITTEN SUBMISSIONS WITH R EGARD TO ELIGIBILITY OF DEDUCTION OF TAX AT SOURCE AND ITS REMITTANCES THEREON FOR EACH OF THE EXPENSES DEBITED IN ITS ACCOUNTS VIDE ITS LETTERS DATED 20.12.2012 AND 3.1.2013. FR OM THE SAME, THE LD AO OBSERVED THAT IN THE FOURTH QUARTER OF FINANCIAL YEAR 2009-10, TH E ASSESSEE HAD MADE PAYMENT OF RS 2,60,00,000/- (OUT OF TOTAL CONTRIBUTION OF RS 9,60 ,00,000/- AS PER THE AGREEMENT) TO GEPIL , AN ENVIRO-INFRASTRUCTURE COMPANY, ENTRUSTED WITH THE JOB OF MUNICIPAL SOLID WASTE MANAGEMENT, WITHOUT DEDUCTION OF TAX AT SOURC E. SIMILARLY THE ASSESSEE MADE PAYMENT IN THE SECOND QUARTER OF FINANCIAL YEAR 201 0-11, A SUM OF RS 3,60,92,878/- TO GEPIL TOWARDS THE SAME PURPOSE. WHEN CONFRONTED WIT H THE NON-APPLICABILITY OF TDS ON THE SAME, THE ASSESSEE EXPLAINED THAT IN THE FOU RTH QUARTER, CERTAIN PAYMENTS WERE MADE TO GEPIL, AN ENVIRO-INFRASTRUCTURE COMPANY WIT H WHOM ADDA AND OTHER FIVE URBAN LOCAL BODIES (ULB) NAMELY, DURGAPUR MUNICIPAL CORPORATION [IN SHORT DMC] , ASANSOL MUNICIPAL CORPORATION [ IN SHORT AMC] , RAN IGANJ MUNICIPALITY [IN SHORT RM] , JAMURIA MUNICIPALITY [IN SHORT JM] AND KULTI MUNIC IPALITY [IN SHORT KM] , HAD ENTERED INTO A CONCESSION AGREEMENT WITH GEPIL FOLLOWING A BIDDING PROCEDURE FOR DEVELOPMENT OF MUNICIPAL SOLID WASTE PROCESSING AND ENGINEERED SANITARY LANDFILL FACILITIES UNDER THEIR JURISDICTION AND PROVIDED IN ITIAL CONTRIBUTION OF RS 2,60,00,000/- AS INITIAL CONTRIBUTORY SUPPORT DURING THE CONCERNED F INANCIAL YEAR. THE ASSESSEE (ADDA) EXPLAINED THAT IT WAS MERELY ASSOCIATED AS A NODAL AGENCY WHICH ONLY RELEASED THE CONTRIBUTION OF RS 9,60,00,000/- TO GEPIL OUT OF T HE TOTAL COST INVOLVED FOR IMPLEMENTATION OF MUNICIPAL SOLID WASTE MANAGEMENT PROJECT UNDER THE DESIGNATED 3 ITA NOS.279 & 280/KOL/2016 ASANSOL DURGAPUR DEVELOPMENT AUTHORITY A.YRS.2010-11 TO 2011-12 3 AREAS OF 5 ULBS ON A BUILD, OWN, OPERATE & TRANSFER (BOOT) BASIS AND THE SAME WAS IN NO WAY RELATED TO ANY PAYMENT FOR ANY PROFESSION AL SERVICE. THE NODAL AGENCY (IE THE ASSESSEE) WOULD BE RESPONSIBLE FOR SUPERVISION AND LIAISON DURING CONSTRUCTION PERIOD AS WELL AS DURING OPERATION & MAINTENANCE (O&M) PERIOD WHICH INCLUDE RELEASING APPROVALS, HANDING OVER SITES, APPOINTMENT OF PROJE CT ENGINEER TO ENSURE MINIMUM SUPPLY OF MUNICIPAL SOLID WASTE BY ULBS TO THE CONC ESSIONAIRE (I.E GEPIL) , TO ENSURE THAT THE ULBS SUPPLY MINIMUM GUARANTEED QUANTITY OF MUNICIPAL SOLID WASTE TO GEPIL, PAYMENTS ARE RELEASED IN TIME TO GEPIL, DUE COMPLIANCE OF MUNICIPAL SOLID WASTE BY GEPIL ETC. 2.2. THE LD AO ON PERUSAL OF THE CONCESSION AGREEME NT, BID PROPOSAL AND WRITTEN SUBMISSIONS OF THE ASSESSEE OBSERVED AS UNDER:- 1. THAT ADDA AS A NODAL AGENCY HAD AWARDED A CONTRA CT UNDER THE NOMENCLATURE CONCESSION AGREEMENT TO M/S GEPIL FO R EXECUTION OF A JOB INVOLVING SPECIFIC PROFESSIONAL-CUM-TECHNOLOGICAL E XPERTISE FOR SUSTAINABLE & BETTER ENVIRONMENT THROUGH SOLID WASTE MANAGEMENT I N THE AREA UNDER ITS JURISDICTION WHERE THE NODAL AGENCY HAD RETAINED EV ERY POSSIBLE CONTROL OVER THE DEVELOPMENT AND FOR THE PURPOSE OF REDUCTION OF COS T OF THE PROJECT IT PROVIDED AND INITIAL CONTRIBUTION OF RS. 9.60 CRORES ONLY ON SUBMISSION OF PROGRESSIVE CLAIM FOR EXPENDITURE INCURRED. IN THIS FOURTH QUAR TER OF THE F.Y. 2009-10, IT MADE A PAYMENT OF RS. 2.60 CRORES TOWARDS THE SAME. FURTHER, IN THE ARS OWN SUBMISSION, GRANTS/ SUBS IDIES ARE ALWAYS GIVEN TO AN ORGANIZATION HAVING SUFFICIENT PROFESSIONAL E XPERTISE OTHERWISE PROPER UTILIZATION OF GRANT IS NOT FEASIBLE AND THAT GRANT /INITIAL CONTRIBUTION WAS PROVIDED BY ADDA ONLY TO REDUCE THE COST OF WASTE M ANAGEMENT. SO, TO MAKE THE PROJECT FEASIBLE, THE SO-CALLED GRA NT/INITIAL CONTRIBUTION WAS PROVIDED TO M/S GEPIL WITH THE SOLE PURPOSE OF RATE REDUCTION TOWARDS THE COST OF THE PROJECT TO SUCH AN ENTITY HAVING PROFESSIONA L-CUM-TECHNOLOGICAL EXPERTISE IN THIS KIND OF PROJECT. FURTHER, AS PER PARA 14.2.4 OF THE BID DOCUMENT, T HE MOBILIZATION OF FINANCE FOR THE EXECUTION OF THE PROJECT SHALL BE THE RESPO NSIBILITY OF THE PRIVATE PARTNER WITHIN A SPECIFIED TIME FRAME. THE PUBLIC PARTNER I S IN NO WAY SHALL BE RESPONSIBLE FOR FUNDING THE CAPITAL EXPENDITURE; OV ER RUN IN CONSTRUCTION COST 4 ITA NOS.279 & 280/KOL/2016 ASANSOL DURGAPUR DEVELOPMENT AUTHORITY A.YRS.2010-11 TO 2011-12 4 AND OPERATIONAL EXPENSES. ALL THE REQUIRED PERSONNE L SHALL HAVE TO BE DEPLOYED BY THE PRIVATE DEVELOPER AT THEIR OWN COST. HENCE, THE ARS ARGUMENT THAT AS THE COMPANY CAN CR EATE CHARGES FOR GETTING FINANCE FROM THE BANKS/FIS AND THAT TO WITH THE NEC ESSARY NO OBJECTION CERTIFICATE FROM THE ADDA AND THE ULBS IS ATTRIBUTI NG SOME SHORT OF OWNERSHIP ON M/S GEPIL IS NOT AT ALL TENABLE AS THOSE CLAUSES ARE THERE IN THE AGREEMENT TO ENABLE M/S GEPIL TO ARRANGE FOR THE FINANCE, IF NEC ESSARY, AS THE PROJECT IS THE SELF FINANCING ONE. ALSO GEPIL IS NOT A BODY WHOSE INCOME IS EXEMPTED U NDER ANY PROVISIONS OF INCOME TAX ACT, 1961. SO ALL THE ARGUMENTS AS PUT FORWARD BY THE AR OF TH E ADDA REGARDING NON- DEDUCTION OF TAX AT SOURCE OVER THE PAYMENT OF RS. 2.60 CRORES, DURING THE FOURTH QUARTER OF THE F.Y. 2009-10 DOES NOT HOLD ANY GROUN D HERE. HENCE, IT CAN BE SAFELY CONCLUDED THAT TAX WAS TO B E DEDUCTED U/S 194J OF THE ACT ON THE TOTAL PAYMENT OF RS. 2.60 CRORE IN THE FOURT H QUARTER OF F.Y. 2009-10. THE LD AO OBSERVED THAT NON-DEDUCTION OF TAX AT SOU RCE ON THE SAME WOULD MAKE THE ASSESSEE AS AN ASSESSEE IN DEFAULT IN TERMS OF SE CTION 201(1) OF THE ACT AND WOULD BE INVITED WITH CONSEQUENTIAL INTEREST U/S 201(1A) OF THE ACT. 3. THE NEXT ISSUE TO BE DECIDED IN THESE APPEALS IS AS TO WHETHER THE ASSESSEE COULD BE TREATED AS AN ASSESSEE IN DEFAULT U/S 201 / 201(1A) OF THE ACT IN RESPECT OF PAYMENTS MADE TOWARDS LIFT INSTALLATION CHARGES , IN THE FAC TS AND CIRCUMSTANCES OF THE CASE. 3.1. THE LD AO OBSERVED THAT IN THE FINANCIAL YEARS 2009-10 AND 2010-11, THE ASSESSEE MADE THREE PAYMENTS FOR THE LIFT INSTALLATION CHARG ES I.E RS 18,870/- ON 12.10.2009 , RS 1,68,550/- ON 8.3.2010 AND RS 1,00,000/- DURING FIN ANCIAL YEAR 2010-11 TOTALLING TO RS 2,87,420/- . HE OBSERVED THAT AS PER THE ACT, TAX IS TO BE DEDUCTED ON THE DATE ON WHICH THE BILL IS RAISED OR PAYMENT IS MADE WHICHEVER IS EARLIER. ACCORDINGLY HE OBSERVED THAT THE TDS WAS TO BE MADE ON THE TOTAL COST OF LIFT IN STALLATION IN THE FIRST QUARTER OF FINANCIAL YEAR 2009-10. THE ASSESSEE REPLIED THAT PAYMENTS WERE MADE TO OTIS AS AND 5 ITA NOS.279 & 280/KOL/2016 ASANSOL DURGAPUR DEVELOPMENT AUTHORITY A.YRS.2010-11 TO 2011-12 5 WHEN BILLS ARE RAISED BY THEM AND IT IS NOT A DEFER RED PAYMENT BY ASSESSEE AGAINST THE BILL RAISED BY OTIS ON 12.10.2009. HENCE THERE IS NO ERROR COMMITTED BY THE ASSESSEE IN THIS REGARD. THE LD AO HOWEVER OBSERVED THAT TH E SUBJECT MENTIONED PAYMENTS WOULD FALL UNDER THE AMBIT OF PROVISIONS OF SECTION 194J OF THE ACT ON THE TOTAL COST OF RS 2,87,420/- IN THE FIRST QUARTER OF FINANCIAL YEA R 2009-10 AND NON-DEDUCTION OF THE SAME WOULD MAKE THE ASSESSEE AS AN ASSESSEE IN DEF AULT IN TERMS OF SECTION 201(1) OF THE ACT AND WOULD BE INVITED WITH CONSEQUENTIAL INT EREST U/S 201(1A) OF THE ACT. 4. THE NEXT ISSUE TO BE DECIDED IN THESE APPEALS IS AS TO WHETHER THE ASSESSEE COULD BE TREATED AS AN ASSESSEE IN DEFAULT U/S 201 / 201(1A) OF THE ACT IN RESPECT OF PAYMENTS MADE TO DURGAPUR EX SERVICEMEN WELFARE SECURITY IN ASST YEAR 2011-12 , IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 4.1. THE BRIEF FACTS OF THIS ISSUE IS THAT THE LD A O OBSERVED THAT IN THE FIRST QUARTER OF FINANCIAL YEAR 2010-11, THE ASSESSEE MADE PAYMENT A MOUNTING TO RS 9,03,541/- TO DURGAPUR EX SERVICEMEN WELFARE SECURITY WHERE NO TA X WAS DEDUCTED AT SOURCE. THE ASSESSEE STATED THAT THE SAID AGENCY WAS HAVING PAN BUT THE SAME WAS MISTAKENLY NOT QUOTED BY THE ASSESSEE IN THE TDS RETURNS. THE LD AO HOWEVER CONCLUDED THAT THE SAID PAYMENT WOULD SUFFER TDS AT THE RATE OF 20% IN THE ABSENCE OF PAN. 5. THE LD CITA OBSERVED THAT THE ASSESSEE WAS COVER ED BY EXEMPTION U/S 10(20A) OF THE ACT PRIOR TO ITS OMISSION WITH EFFECT FROM 1.4.2003 . HE OBSERVED THAT THE ASSESSEE IS NOT REGISTERED U/S 12A OF THE ACT AND HENCE ITS INCOME IS NOT EXEMPT U/S 11 OF THE ACT, EVEN IF THE OBJECTS FOUND TO BE CARRIED OUT BY THE ASSES SEE ARE CHARITABLE IN NATURE. HENCE THE INCOME OF SUCH ORGANIZATIONS SHALL BE COMPUTED IN T HE SAME MANNER AS INCOME OF COMMERCIAL ORGANIZATIONS. THE ASSESSEE CONTENDED T HAT THE PAYMENT MADE TO GEPIL WAS OUT OF CENTRAL GOVERNMENT GRANT ON BEHALF OF GE PIL WHICH WAS ROUTED THROUGH ASSESSEE AS NODAL AGENCY AND ASSESSEE DID NOT ENTER INTO ANY AGREEMENT AND IT WAS ONLY 6 ITA NOS.279 & 280/KOL/2016 ASANSOL DURGAPUR DEVELOPMENT AUTHORITY A.YRS.2010-11 TO 2011-12 6 MONITORING THE UTILIZATION OF GRANT. THE LD CITA ON THE CONTRARY OBSERVED THAT : (1) OPERATIONAL EXPENSES ALL THE REQUIRED PERSONNEL SHALL HAVE TO BE DEPLOYED BY THE PRIVATE DEVELOPER AT THEIR OWN COST ; (2) FURTHER AS PER PARA 14.2.4. OF THE BID DOCUMENT, THE MOBILIZATION OF FINANCE FOR THE EXEC UTION OF THE PROJECT SHALL BE THE RESPONSIBILITY OF THE PRIVATE PARTNER WITHIN A SPEC IFIED TIME FRAME. THE PUBLIC PARTNER IS NO WAY SHALL BE RESPONSIBLE FOR FUNDING THE CAPITAL EXPENDITURE, OVER RUN IN CONSTRUCTION COST ; (3) MOREOVER, AS THE COMPANY CAN CREATE CHA RGES FOR GETTING FINANCE FROM BANKS / FIS AND THAT TOO WITH THE NECESSARY NO OBJECTION CE RTIFICATE FROM ASSESSEE AND THE ULBS DOESNT ATTRIBUTE ANY OWNERSHIP ON GEPIL ; (4) THAT ASSESSEE AS A NODAL AGENCY HAD AWARDED A CONTRACT UNDER THE NOMENCLATURE CONC ESSION AGREEMENT TO GEPIL FOR SUSTAINABLE AND BETTER ENVIRONMENT THROUGH SOLID WA STE MANAGEMETN IN THE AREA UNDER ITS JURISDICTION WHERE THE NODAL AGENCY HAD RETAINE D EVERY POSSIBLE CONTROL OVER THE DEVELOPMENT ; (5) GEPIL IS NOT A BODY WHOSE INCOME IS EXEMPTED UNDER ANY PROVISIONS OF THE INCOME TAX ACT, 1961 ; (6) GRANTS / SUBSIDIES ARE ALWAYS GIVEN TO AN ORGANIZATION HAVING SUFFICIENT PROFESSIONAL EXPERTI SE OTHERWISE PROPER UTIISATION OF GRANT IS NOT FEASIBLE . HE OBSERVED THAT THE ASSESSEE H AD SUBMITTED THAT IN ORDER TO MAKE THE PROJECT FEASIBLE, THE SO CALLED GRANT WAS PROVIDED TO GEPIL WITH THE SOLE PURPOSE OF RATE REDUCTION TOWARDS THE COST OF THE PROJECT TO SUCH A N ENTITY HAVING PROFESSIONAL CUM TECHNOLOGICAL EXPERTISE IN THIS KIND OF PROJECT. TH E LD CITA ALSO OBSERVED THAT GEPIL HAD NOT SHOWN THIS RECEIPT FROM THE ASSESSEE AS A R EVENUE RECEIPT RATHER IT HAD REFLECTED THE SAME UNDER CAPITAL RESERVE. HENCE THIS IS NOT A CASE WHERE THE PAYEE HAD PAID ITS DUE TAXES. HE OBSERVED THAT GEPIL HAD PERFORMED O N THE BASIS OF CONTRACT AND THEREFORE AMOUNT PAID TO THEM WAS REVENUE IN NATURE IN THEIR HANDS AND HENCE THE ASSESSEE IS OBLIGATED TO DEDUCT TAX AT SOURCE ON TH E PAYMENTS MADE TO THEM. 5.1. SIMILARLY FOR THE OTHER PAYMENTS MADE BY THE A SSESSEE, THE LD CITA CONFIRMED THE ACTION OF THE LD AO BY TREATING THE ASSESSEE AS AS SESSEE IN DEFAULT U/S 201 / 201(1A) OF THE ACT, WITHOUT HAVING ANY DISCUSSION OR GIVING AN Y FINDING THEREON. 7 ITA NOS.279 & 280/KOL/2016 ASANSOL DURGAPUR DEVELOPMENT AUTHORITY A.YRS.2010-11 TO 2011-12 7 6. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US O N THE FOLLOWING GROUNDS:- I.T.A. NO. 279/KOL/2016 FOR ASSESSMENT YEAR 2010-11 A. FOR THAT THE CIT(APPEALS) HAS ERRED IN CONFIRMIN G THE FINDING OF THE ASSESSING OFFICER THAT IN RESPECT OF THE AMOUNT PAID BY THE A PPELLANT TO GUJRAT ENVIRONMENT PROTECTION AND INFRASTRUCTURE LIMITED (IN SHORT GEP IL) UNDER THE CONCESSION AGREEMENT DATED DECEMBER 23,2008, AS AND BY WAY OF DISBURSEMENT OF A PART OF THE GRANT PROVIDED BY THE GOVERNMENT OF WEST BENGAL , URBAN DEVELOPMENT DEPARTMENT, KOLKATA UNDER THE JAWAHARLAL NEHRU NATI ONAL URBAN RENEWAL MISSION (IN SHORT JNNURM), TAX WAS DEDUCTIBLE UNDER SECTION 194J OF THE INCOME TAX ACT, 1961 AS PAYMENT OF FEES FOR PROFESS IONAL OR TECHNICAL SERVICES BY THE APPELLANT. SECTION 194J HAS NO APPLICATION IN THE UNDISPUTED FACTS OF THE INSTANT CASE. B. FOR THAT THE CIT(APPEALS) HAS ERRED IN CONFIRMIN G THE ERRONEOUS FINDING OF THE ASSESSING OFFICER INCREASING THE AMOUNT OF TAX DEDU CTIBLE AT SOURCE UNDER SECTION 194C OF THE ACT FOR THE 4 TH QR. OF A.Y. 2010-11 FROM RS. 18,404/- TO RS. 33,307/-. THERE IS NO DISCUSSION OR FINDING ON THE ISSUE IN THE SAID ORDER. C. FOR THAT THE CIT(APPEALS) HAS ERRED IN HOLDING T HAT THE ASSESSING OFFICER HAD RIGHTLY DISALLOWED THE AMOUNTS INVOLVED AS PER THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT. D. FOR THAT THE CIT(APPEALS) HAS ERRED IN CONFIRMIN G THE INCREASE IN INTEREST LIABILITY BY RS. 77,593/- BY THE ASSESSING OFFICER AND THAT TOO WITHOUT ANY DISCUSSION OR FINDING. IN THE FACTS AND CIRCUMSTANC ES OF THE INSTANT CASE THERE BEING NO LIABILITY TO DEDUCT TAX UNDER SECTION 194J OF THE ACT BY THE APPELLANT, THERE CAN BE NO INCREASED DEMAND OF INTEREST. I.T.A. NO. 280/KOL/2016 FOR ASSESSMENT YEAR 2011-12 A. FOR THAT THE CIT(APPEALS) HAS ERRED IN CONFIRMIN G THE FINDING OF THE ASSESSING OFFICER THAT IN RESPECT OF THE AMOUNT PAID BY THE A PPELLANT TO GUJRAT ENVIRONMENT PROTECTION AND INFRASTRUCTURE LIMITED (IN SHORT GEP IL) UNDER THE CONCESSION AGREEMENT DATED DECEMBER 23,2008, AS AND BY WAY OF DISBURSEMENT OF A PART OF THE GRANT PROVIDED BY THE GOVERNMENT OF WEST BENGAL , URBAN DEVELOPMENT DEPARTMENT, KOLKATA UNDER THE JAWAHARLAL NEHRU NATI ONAL URBAN RENEWAL MISSION (IN SHORT JNNURM), TAX WAS DEDUCTIBLE UNDER SECTION 194J OF THE INCOME TAX ACT, 1961 AS PAYMENT OF FEES FOR PROFESS IONAL OR TECHNICAL SERVICES BY THE APPELLANT. SECTION 194J HAS NO APPLICATION IN THE UNDISPUTED FACTS OF THE INSTANT CASE. 8 ITA NOS.279 & 280/KOL/2016 ASANSOL DURGAPUR DEVELOPMENT AUTHORITY A.YRS.2010-11 TO 2011-12 8 B. FOR THAT THE CIT(APPEALS) SHOULD HAVE HELD AND E RRED IN NOT DOING SO THAT THE FINDING OF THE ASSESSING OFFICER THAT DEDUCTION OF TAX IN RESPECT OF PAYMENT TOWARDS LIFT INSTALLATION COST IN A BUILDING IS A W ORKS CONTRACT AND HENCE DEDUCTION OF TAX FOR PAYMENT THEREFORE HAD TO BE UN DER SECTION 194C OF THE ACT AND NOT UNDER SECTION 194J THEREOF. C. FOR THAT THE CIT(APPEALS) HAS ERRED IN UPHOLDING THE FINDING OF THE ASSESSING OFFICER THAT DUE TO ALLEGED NON-AVAILABILITY OF PAN NO. OF DURGAPUR EX SERVICES WELFARE ASSOCIATION TAX IS REQUIRED TO BE DEDUCTED AT SOURCE @ 20% IN RESPECT OF PAYMENTS MADE TO THE SAID ASSOCIATION AND NOT @ 2% UNDER SECTION 194C OF THE ACT. D. FOR THAT THE CIT(APPEALS) HAS ERRED IN HOLDING T HAT THE ASSESSING OFFICER HAD RIGHTLY DISALLOWED THE AMOUNTS INVOLVED AS PER THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT. E. FOR THAT THE CIT(APPEALS) HAS ERRED IN CONFIRMIN G THE DEMAND OF INTEREST BY THE ASSESSING OFFICER, THERE BEING NO LIABILITY TO DEDUCT TAX UNDER SECTION 194J OF THE ACT BY THE APPELLANT IN THE INSTANT CASE, CONTR ARY TO WHAT HAS BEEN ERRONEOUSLY HELD BY THE ASSESSING OFFICER. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. WE FIND THAT FOR DEVELOPMENT OF AN INTEGRATED MUNIC IPAL SOLID WASTE MANAGEMENT FOR ULBS OF ASANSOL, DURGAPUR, RANIGUNJ , JAMURIA AND K ULTI URBAN AREA ON BOOT TRANSFER BASIS, A CONCESSION AGREEMENT WAS ENTERED INTO ON 23.12.2008 BETWEEN DURGAPUR MUNICIPAL CORPORATION, ASANSOL MUNICIPAL C ORPORATION, RANIGANJ MUNICIPALITY, JAMURIA MUNICIPALITY, KULTI MUNICIPAL ITY AND THE ASESSEEE, OF THE ONE PART, WITH GEPIL. THE MINISTRY OF ENVIRONMENT AND FORESTS, GOVERNMENT OF INDIA, FORMULATED THE MUNICIPAL SOLID WASTES (MANAGEMENT A ND HANDLING) RULES, 2000 WHICH MADE IT MANDATORY FOR EVERY MUNICIPAL AUTHORITY TO IMPLEMENT A SCIENTIFIC SOLID WASTE MANAGEMENT SYSTEM WHEREIN THE MUNICIPAL SOLID WASTE IS DULY PROCESSED AND THE RESIDUAL INERT / NON-BIODEGRADABLE SOLD WASTES DISP OSED IN AN ENGINEERED SANITARY LANDFILL. THE PROJECT UNDER THE SAID AGREEMENT WA S, INTER ALIA, INCLUDED IN JNNURM. ACCORDINGLY FROM TIEM TO TIME, FUNDS WERE MADE AVAI LABLE AS AND BY WAY OF GRANTS FROM THE GOVERNMENT OF INDIA AND BUDGETARY SUPPORT FROM THE STATE GOVERNMENT AND 9 ITA NOS.279 & 280/KOL/2016 ASANSOL DURGAPUR DEVELOPMENT AUTHORITY A.YRS.2010-11 TO 2011-12 9 CONTRIBUTION FROM ULBS AS PER RATIO SUGGESTED UNDER JNNURM (I.E 50:20:30). FOR DISBURSEMENT OF SUCH GRANTS, THE GOVERNMENT OF WEST BENGAL APPOINTED KOLKATA METROPOLITAN DEVELOPMENT AUTHORITY (KMDA) AS THE NO DAL AGENCY FOR THE STATE FOR JNNURM. FUNDS WERE MADE AVAILABLE UNDER JNNURM SCH EMES TO KMDA FOR DISTRIBUTION AND RELEASE THEREOF TO THE CONCERNED P ROJECTS. KMDA WOULD MAKE AVAILABLE THE FUNDS TO THE ASSESSEE WHO IN TURN WOU LD DISBURSE THE SAME TO THE CONCESSIONAIRE I.E GEPIL. NOW THE SHORT QUESTIO N THAT ARISES FOR OUR CONSIDERATION TO ADDRESS THE DISPUTE BEFORE US IS WHETHER THE AMOUNT S DISBURSED BY THE ASSESSEE TO GEPIL IN BOTH THE YEARS BEING GRANTS RECEIVED THROU GH KMDA FROM THE STATE GOVERNMENT UNDER JNNURM FOR THE SUBJECT PROJECT WOU LD COME UNDER THE PURVIEW OF PROVISIONS RELATING TO DEDUCTION OF TAX AT SOURCE U NDER THE ACT. WE FIND THAT THE LD AR DREW OUR ATTENTION TO THE RELEVANT PROVISIONS OF TH E WEST BENGAL TOWN AND COUNTRY (PLANNING AND DEVELOPMENT) ACT, 1979 AS UNDER:- SECTION 11 CONSTITUTION OF PLANNING AUTHORITY AND DEVELOPMENT AUTHORITY (1) AS SOON AS MAY BE , AFTER DECLARATION OF AN ARE A AS A PLANNING AREA, THE STATE GOVERNMENT MAY, BY NOTIFICATION, CONSTITUTE FOR THE PURPOSE OF THIS ACT A PLANNING AUTHORITY FOR THAT AREA OR A DEVELOPMENT A UTHORITY IN RESPECT OF THE PLANNIGN AREA OR A PART OF IT. (2) A PLANNING AUTHORITY OR A DEVELOPMENT AUTHORITY , IF IT IS NOT A LOCAL AUTHORITY OR A GOVERNMENT DEPARTMENT OR AGENCY, SHA LL BE A BODY CORPORATE HAVING PERPETUAL SUCCESSION AND A COMMON SEAL WITH POWER TO ACQUIRE, HOLD AND DISPOSE OF PROPERTY , BOTH MOVABLE AND IMMOVABLE, A ND TO ENTER INTO CONTRACTS AND SHALL BY ITS CORPORATE NAME SUE AND BE SUED. (3) EVERY PLANNING AUTHORITY OR DEVELOPMENT AUTHORI TY CONSTITUTED UNDER SUB- SECTION (1) SHALL CONSIST OF A CHAIRMAN AND NOT MOR E THAN THIRTEEN BUT NOT LESS THAN SEVEN OTHER MEMBERS TO BE APPOINTED BY THE STA TE GOVERNMENT. (4) THE STATE GOVERNMENT MAY APPOINT A LOCAL AUTHOR ITY OR ANY OTHER AUTHORITY OR CORPORATION (STATUTORY OR OTHERWISE), OR ANY OFF ICER OF THE STATE GOVERNMENT, AS THE PLANNING AUTHORITY OR THE DEVELOPMENT AUTHOR ITY FOR THE AREA WITHIN THE JURISDICTION OF THAT AUTHORITY. 10 ITA NOS.279 & 280/KOL/2016 ASANSOL DURGAPUR DEVELOPMENT AUTHORITY A.YRS.2010-11 TO 2011-12 10 (5) THE PROVISIONS OF SUB-SECTION (3) OF THIS SECTI ON AND SECTIONS 12, 14 AND 15 SHALL NOT APPLY TO A PLANNING AUTHORITY OR A DEVELO PMENT AUTHORITY APPOINTED UNDER SUB-SECTION (4) AND THE PROVISIONS OF THIS AC T BY WHICH SUCH AUTHORITY IS CONSTITUTED SHALL CONTINUE TO APPLY IN RESPECT OF T HE AREA WITHIN THE JURISDICTION OF THAT AUTHORITY. 7.1. WE FIND THAT THE ASSESSEE HAS BEEN CONSTITUTED UNDER SUB-SECTION (1) OF SECTION 11 ABOVE VIDE NOTIFICATION NO. 1881/T&CP/1R-6/80 DATED 17.3.1980 WHICH IS ENCLOSED IN PAGE 3 OF THE SECOND PAPER BOOK. WE FIND THAT THE KEY OFFICIALS OF THE ASSESSEE WERE APPOINTED BY THE GOVERNMENT OF WEST BENGAL, URBAN D EVELOPMENT DEPARTMENT, TOWN & COUNTRY PLANNING BRANCH AS EVIDENT FROM PAGE 5 OF THE SECOND PAPER BOOK. WE FIND THAT THE GRANTS ARE GIVEN TO GEPIL THROUGH THE ASSE SSEE BY THE STATE / CENTRAL GOVERNMENT. THE ASSESSEE IS MERELY A DISBURSING AU THORITY AND IS REQUIRED TO OVERSEE THE PROPER UTILIZATION OF THE FUNDS GIVEN FOR AND O N BEHALF OF THE ULBS OF THE STATE GOVERNMENT. WE ALSO FIND THAT THE STATE GOVERNMENT ALSO DIRECTS THE ASSESSEE TO MAKE USE OF THE FUNDS COLLECTED SUCH AS LAND PREMIUM , G ROUND RENT, ETC ON BEHALF OF THE GOVERNMENT AND ACCORDING PERMISSION FOR THE SAME TO BE INVESTED IN BANK FOR ONWARD UTILIZATION OF ITS EARMARKED PURPOSES. THIS IS ENCL OSED IN PAGE 4 OF THE SECOND PAPER BOOK. ALL THESE DOCUMENTS CLEARLY PROVE THAT THE A SSESSEE IS ACTING ONLY AT THE BEHEST OF THE STATE GOVERNMENT AND ACCORDINGLY COULD BE SAFEL Y CONCLUDED THAT IT IS ONLY AN AGENT OF THE GOVERNMENT. EVEN THE FINANCIAL STATEMENTS OF THE ASSESSEE REFLECT THAT THE GRANTS PROVIDED BY GOVERNMENT OF WEST BENGAL URBAN DEVELOP MENT DEPARTMENT UNDER JAWAHARLAL NEHRU NATIONAL URBAN RENEWAL MISSION ( I N SHORT JNNURM) SCHEME THROUGH THE KOLKATA METROPOLITAN DEVELOPMENT AUTHOR ITY, THAT THESE AMOUNTS ARE SPECIFICALLY RETAINED IN EARMARKED ACCOUNTS AND EVE NTUALLY REDUCED AS AND WHEN THEY ARE DISBURSED FOR ITS INTENDED PURPOSES. HENCE IT COULD BE SAFELY CONCLUDED THAT THE ASSESSEE IS ONLY A PASS THROUGH AGENCY OF THESE FUN DS AND HAD MERELY ACTED AS A CUSTODIAN OF FUNDS BELONGING TO THE GOVERNMENT. 11 ITA NOS.279 & 280/KOL/2016 ASANSOL DURGAPUR DEVELOPMENT AUTHORITY A.YRS.2010-11 TO 2011-12 11 7.2. NOW LET US EXAMINE THE APPLICABILITY OF PROVIS IONS OF SECTION 194C / 194J OF THE ACT WITH REGARD TO THE AFORESAID PAYMENTS. THE GRANT PAID UNDER THE JNNURM SCHEME BY THE STATE GOVERNMENT IN THE INSTANT CASE TO GEPIL, DISBURSED THROUGH THE ASSESSEE IN A SELF FINANCING PROJECT UNDER THE CONCESSIONAIRE AGR EEMENT, IS NOT A PAYMENT WHICH THE ASSESSEE IS OBLIGED OR RESPONSIBLE FOR PAYING TO GE PIL AND AS SUCH THE PRIMARY REQUIREMENT OF SECTION 194C OR 194J OF THE ACT SQUA RELY FAILS IN THE INSTANT CASE, AS ADMITTEDLY THE ASSESSEE IS NOT THE PERSON RESPONSIB LE FOR PAYMENT WITHIN THE MEANING OF PROVISIONS OF CHAPTER XVIIB OF THE ACT. HENCE WE H OLD THAT THE ASSESSEE IS NOT OBLIGATED TO DEDUCT TAX AT SOURCE ON THE SUBJECT ME NTIONED PAYMENTS AND HENCE CONSEQUENTIALLY THE ASSESSEE COULD NOT BE INVITED W ITH LIABILITY U/S 201 AND 201(1A) OF THE ACT IN RESPECT OF PAYMENTS MADE TO GEPIL. 7.3. WE FIND THAT IN THE CASE OF CIT VS PANDAVPUR SAHAKARA SAKKARA KHARKHANE LTD (1992) 198 ITR 690 (KAR) , IT WAS HELD THAT THE AMOUNT SET APART AND MEANT F OR UTILIZATION ONLY AS PER THE DIRECTIONS OF THE STATE GOVT. REPRESENTS DIVERSION OF INCOME AND THE SAME CANNOT BE CREDITED. IT WAS HELD THAT THE AMOUNT SO SET APART AS PER THE STATUTORY OBLIGATION IS NOT LIABLE TO TAX IN THE HA NDS OF THE ASSESSEE. THE SLP OF THE DEPARTMENT BEFORE THE HONBLE SUPREME COURT AGAINST THE ABOVE DECISION WAS ALSO DISMISSED VIDE (1992) 195 CTR (SC) 136. 7.4. WE ALSO FIND THAT THE CO-ORDINATE BENCH OF AHMEDABAD TRIBUNAL IN THE CASE OF THE /AHD/TANT GEOLOGIST , GEOLOGY & MINING DEPT. VS ITO TDS IN ITA NO. 810/AHD/2010 FOR ASST YEAR 2008-09 DATED 10.7.2013 HAD ADDRESSED A SIMILAR ISSUE. THE FACTS BEFORE T HE AHMEDABAD TRIBUNAL WAS THAT THE ASSESSEE IN THAT CA SE HAD PAID RS 6,93,16,000/- TO GUJARAT MINERAL DEVELOPMENT CORPORATION (GMDC) AND GUJARAT MINERAL RESEARCH & DEVELOPMENT SOCIETY (GMRDS) FOR CONSTRUCTION OF MAR BLE PARK FOR ARTISANS AND USING OF MINERAL WITHOUT DEDUCTING TAX AT SOURCE U/S 194C OF THE ACT. A SHOW CAUSE NOTICE WAS ISUSED TO THAT ASSESSEE TO EXPLAIN AS TO WHY DE MAND MAY NOT BE RAISED U/S 201(1) 12 ITA NOS.279 & 280/KOL/2016 ASANSOL DURGAPUR DEVELOPMENT AUTHORITY A.YRS.2010-11 TO 2011-12 12 AND INTEREST MAY NOT BE CHARGED FOR THE ABOVE DEF AULT U/S 201(1A) OF THE ACT. THE ASSESSEE IN THAT CASE REPLIED THAT SINCE THE AMOUNT S PAID TO THE AFORESAID PARTIES ARE GRANT-IN-AID, THEREFORE, THE ASSESSEE IS NOT REQUIR ED TO DEDUCT TAX AT SOURCE ON SUCH PAYMENT. THE ASSESSEE ALSO SUBMITTED IN THAT CASE, THAT ITS ROLE WAS INTERMEDIARY WHOSE RESPONSIBILITY WAS TO MAKE PROPOSAL TO THE CONCERNE D GOVERNMENT DEPARTMENT FOR RELEASE OF FUNDS TO GMDC AND GMRDS AND FOR MONITORI NG AND CONTROLLING THE EXPENDITURE INCURRED BY IT. IT WAS HELD AS UNDER :- 7. FURTHER, AS POINTED BY THE LEARNED AR, IT IS EVI DENT THAT THE STATE GOVERNMENT HAD MADE RESOLUTION FOR PROVIDING GRANT-IN-AID TO G MDC AND GMRDS FOR RS 4,78,76,000/- AND RS 2,15,00,000/- RESPECTIVELY AND THESE GRANT-IN-AID WERE ROUTED TO THE ABOVE SAID CORPORATIONS THROUGH THE A SSESSEE. THEREFORE, THESE ARE NOT PAYMENTS MADE FOR CARRYING OUT ANY WORK; HOWEVE R, INSTEAD THEY ARE GRANT- IN-AID GIVEN TO THE CORPORATION THROUGH THE ASSESSE E BY THE STATE GOVERNMENT. THESE FACTS ARE EVIDENT FROM THE PAPER BOOKS FILED BY THE ASSESSEE VIZ PAGE NO. 18 TO 29. THEREFORE, THE PROVISIONS OF SECTION 194C O F THE ACT WOULD NOT BE ATTRACTED IN THE ASSESSEES CASE AND CONSEQUENTIALL Y THE PROVISIONS OF SECTION 201(1) AND 201(1A) OF THE ACT WILL ALSO NOT BE APPL ICABLE. THEREFORE, THE GROUND RAISED BY THE ASSESSEE IS ALLOWED IN ITS FAVOUR. 7.5. WE FIND THAT THE ASSESSEE HAD ACTED ONLY AS A CUSTODIAN FOR DISBURSEMENT OF FUNDS FOR EARMARKED PURPOSES AS A NODAL AGENCY FOR THE SM OOTH IMPLEMENTATION OF THE MUNICIPAL SOLID WASTE MANAGEMENT IN THE DESIGNATED AREAS. THOUGH THE FUNDS CONTINUE TO REMAIN WITH THE ASSESSEE, THE OWNERSHIP OR UTILIZATION DOES NOT VEST IN IT. HENCE WE HOLD THAT WHEN THESE FUNDS ARE DISBURSED T O GEPIL, THERE CANNOT BE ANY OBLIGATION OF DEDUCTION OF TAX AT SOURCE AS THE PAY MENT IS EFFECTIVELY MADE BY THE GOVERNMENT THROUGH THE ASSESSEE. ACCORDINGLY THE G ROUNDS RAISED BY THE ASSESSEE IN THIS REGARD FOR BOTH THE YEARS ARE ALLOWED. 8. WITH REGARD TO DEDUCTION OF TAX AT SOURCE U/S 1 94C OF THE ACT FOR THE FOURTH QUARTER OF ASST YEAR 2010-11, THE SAME HAS BEEN ENHANCED FR OM RS 18,404/- TO RS 33,307/- BY THE LD AO. WE FIND THAT THIS ENHANCEMENT OF RS 14, 903/- HAS BEEN MADE WITHOUT ANY SUPPORTING EVIDENCE BY THE LD AO . WE FIND THAT TH E ASSESSEE HAS NOT BEEN CONFRONTED 13 ITA NOS.279 & 280/KOL/2016 ASANSOL DURGAPUR DEVELOPMENT AUTHORITY A.YRS.2010-11 TO 2011-12 13 WITH THIS ISSUE OF ENHANCEMENT BY CLEARLY POINTING OUT THE ERROR COMMITTED BY THE ASSESSEE IN THIS REGARD. HENCE IN THE INTEREST OF J USTICE AND FAIR PLAY, WE DEEM IT FIT AND APPROPRIATE, TO REMAND THIS ISSUE TO THE FILE OF TH E LD AO FOR ADJUDICATION AFRESH, IN ACCORDANCE WITH LAW. NEEDLESS TO MENTION THAT THE ASSESSEE BE GIVEN REASONABLE OPPORTUNITY OF BEING HEARD IN THIS REGARD. ACCORDI NGLY, THE GROUND RAISED IN THIS REGARD BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES . 9. WITH REGARD TO THE INTEREST LIABILITY OF RS 77,5 93/- WHICH HAS BEEN ENHANCED BY THE LD AO, THE LD AR STATED THAT THE ASSESSEE HAD DEPOSITE D THE ADMITTED TAX OF RS 6,70,224/- AND THE SAME WAS DULY COMMUNICATED TO THE LD AO VID E LETTER DATED 3.1.2013 (ENCLOSED IN PAPER BOOK). HERE ALSO THIS ADDITIONAL INTERES T LIABILITY HAS BEEN FASTENED ON THE ASSESSEE BY THE LD AO WITHOUT ANY SPEAKING ORDER. HENCE IN THE INTEREST OF JUSTICE AND FAIRPLAY, WE DEEM IT FIT AND APPROPRIATE, TO REMAND THIS ISSUE TO THE FILE OF THE LD AO FOR ADJUDICATION AFRESH, IN ACCORDANCE WITH LAW. NEEDL ESS TO MENTION THAT THE ASSESSEE BE GIVEN REASONABLE OPPORTUNITY OF BEING HEARD IN THIS REGARD. ACCORDINGLY, THE GROUND RAISED IN THIS REGARD BY THE ASSESSEE IS ALLOWED FO R STATISTICAL PURPOSES. 10. WITH REGARD TO THE PAYMENT AMOUNTING TO RS 9,03 ,541/- MADE BY THE ASSESSEE TO DURGPAUR EX-SERVICES WELFARE ASSOCIATION IN THE FIR ST QUARTER OF FINANCIAL YEAR 2010- 11 (ASST YEAR 2011-12) , THE LD AO HELD THAT DUE TO NON-AVAILABILITY OF PAN OF THE SAID PARTY, TAX IS REQUIRED TO BE DEDUCTED AT SOURCE @ 2 0% AND NOT 2% U/S 194C OF THE ACT. THE LD AR SUBMITTED THAT THE LD AO HAD FAILED TO TA KE INTO CONSIDERATION THAT TDS RETURNS SUBMITTED FOR THE PAST PERIODS CONTAINED TH E CORRECT PAN OF THE SAID PARTY AND HENCE THE ASSESSEE HAS CORRECTLY DEDUCTED TAX AT SO URCE @ 2% U/S 194C OF THE ACT. IN THE INTEREST OF JUSTICE AND FAIRPLAY, WE DEEM IT FI T AND APPROPRIATE, TO REMAND THIS ISSUE TO THE FILE OF THE LD AO, TO VERIFY THE EARLIER TDS RE TURNS AND IF THE CONTENTION OF THE ASSESSEE IS FOUND TO BE CORRECT, THEN THE APPROPRIA TE RELIEF SHOULD BE GRANTED TO THE 14 ITA NOS.279 & 280/KOL/2016 ASANSOL DURGAPUR DEVELOPMENT AUTHORITY A.YRS.2010-11 TO 2011-12 14 ASSESSEE THEREON. ACCORDINGLY, THE GROUND RAISED I N THIS REGARD BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 11. WITH REGARD TO THE PAYMENT MADE TOWARDS LIFT IN STALLATION CHARGES, THE ASSESSEE HAD DEDUCTED TAX AT SOURCE U/S 194C OF THE ACT, BUT THE LD AO HELD THAT THE SAME WOULD HAVE TO BE DEDUCTED AT HIGHER RATE U/S 194J OF THE ACT. WE FIND THAT THIS ISSUE IS NOW SQUARELY COVERED BY THE CONSTITUTION BENCH OF THE HONBLE SUPREME COURT IN THE CASE OF KONE ELEVATOR INDIA (P) LTD VS STATE OF TAMIL NADU REPOR TED IN (2014) 7 SCC 1 DATED 6.5.2014 . THE RELEVANT HEAD NOTES OF THE SAID JUDGEMETN ARE REPRODUCED HEREUNDER:- SALES TAX AND VAT WORKS CONTRACT TRANSACTION FO R SUPPLY AND INSTALLATION OF LIFT IN A BUILDING NATURE OF WORKS CONTRACT O R CONTRACT FOR SALE OF GOODS DETERMINATION OF COMPOSITE CONTRACT FOR SUPPLY AND INSTALLATION OF LIFTS , HELD (PER MAJORITY) , HAS TO BE TREATED AS A WORKS CONTRACT AND NOT AS A SALE OF GOODS / CHATTELS SIMPLICITER HOWEVER, IF THERE AR E TWO CONTRACTS, ONE FOR PURCHASE OF COMPONENTS OF THE LIFT AND ANOTHER FOR INSTALLATION OF THE LIFT, THEN THE FIRST CONTRACT COULD BE A CONTRACT OF SALE AND THE SECOND A CONTRACT FOR LABOUR AND SERVICE IN THE PRESENT CASES ALL THE CONTRACT S CONCERNED FOR INSTALLATION OF LIFTS ARE COMPOSITE CONTRACTS , HENCE, HELD ( PER M AJORITY) , THEY ARE WORKS CONTRACTS 12. THE ASSESSEE HAD RAISED WITH REGARD TO THE APP LICABILITY OF PROVISIONS OF SECTION 40(A)(IA) OF THE ACT. AS THE APPEALS INVOLVED BEFO RE US IS WITH REGARD TO RAISING OF DEMAND U/S 201 AND 201(1A) OF THE ACT EMANATING FRO M THE TDS ASSESSMENT, THE QUESTION OF APPLICABILITY OF PROVISIONS OF SECTION 40(A)(IA) OF THE IT ACT (WHICH WOULD BE RELEVANT ONLY FOR INCOME TAX ASSESSMENT AND NOT TDS ASSESSMENT) DOES NOT ARISE. HENCE THE GROUNDS RAISED BY THE ASSESSEE IN THIS RE GARD ARE DISMISSED. 13. THE OTHER GROUND RAISED BY THE ASSESSEE IS WITH REGARD TO CHARGEABILITY OF INTEREST U/S 201(1A) OF THE ACT, WHICH IS ONLY CONSEQUENTIAL IN NATURE AND DOES NOT REQUIRE ANY SPECIFIC ADJUDICATION. 15 ITA NOS.279 & 280/KOL/2016 ASANSOL DURGAPUR DEVELOPMENT AUTHORITY A.YRS.2010-11 TO 2011-12 15 14. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE IN ITA NO. 279 & 280 /KOL/2016 ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 08.09.2017 SD/- SD/- [A.T. VARKEY] [ M.BALAGANESH ] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 08.09.2017 SB, SR. PS COPY OF THE ORDER FORWARDED TO: 1. ASANSOL DURGAPUR DEVELOPMENT AUTHORITY, 1 ST ADMINISTRATIVE BUILDING, CITY CENTRE, DURGAPUR-713216 2. INCOME TAX OFFICER (TDS), DURGAPUR INCOME TAX DE PARTMENT, AAYAKAR BHAWAN, CITY CENTRE, DURGAPUR-713216. 3. C.I.T.(A)- DURGAPUR 4. C.I.T.- KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER SENIOR PRIVAT E SECRETARY HEAD OF OFFICE/D.D.O., ITAT, KOLKATA BENCHE S