The Incomet-ax Officer, Jalandhar V. M/s, Om Publicity, Jalandhar

ITA 560/ASR/2014

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9747 (ITAT-AMRITSAR)
• Duration Of Justice: 9 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-06-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 09-06-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 10-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: BHAGAT
• Section: 194C; 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRI BUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. PRAMOD KUMAR, ACCOUNTANT MEMBER AND SH. A.D.JAIN, JUDICIAL MEMBER I.T.A. NO. 559 & 560/ASR/2014 ASSESSMENT YEAR: 2009-10 & 2010-11 PAN : AABFQ7739D THE INCOME TAX OFFICER (TDS)- II, JALANDHAR VS. M/S OM PUBLICITY, 14-A, ATWAL COLONY, CANTT ROAD, JALANDHAR NOW 691-GURU TEG BAHADUR NAGAR, JALANDHAR (APPELLANT) (RESPONDENT) APPELLANT BY: SH. TARSEM LAL RESPONDENT BY: SH. M.R. BHAGAT DATE OF HEARING: 09.06.2015 DATE OF PRONOUNCEMENT: 12.06.2015 ORDER PER A.D.JAIN (JM): THESE ARE DEPARTMENTS APPEALS FOR AYS 2009-10 AND 2010-11 AGAINST THE ACTION OF LD. CIT(A) IN HOLDING THAT TH E AO WAS NOT JUSTIFIED IN TREATING THE PR AS ASSESSEE IN DEFAULT FOR BOTH THE YEARS UNDER CONSIDERATION FOR SHORT / NON DEDUCTION OF TAX UNDER THE PROVISIO NS OF SECTION 194 I OF THE INCOME TAX ACT AND THEREBY DELETING THE DEMAND RAIS ED UNDER SECTION 201(1)/ 201(1A) OF THE ACT. I.T.A. NO. 559 & 560/ASR/2014 ASSESSMENT YEAR: 2009-10 & 2010-11 2 2. THE FACTS ARE THAT IN THE TDS INSPECTION CARRIED OUT IN THE CASE OF PERSON RESPONSIBLE, IT WAS NOTICED THAT THE PR HAD ENTERED INTO AN AGREEMENT WITH M/S MSK PROJECTS (INDIA) LTD., VADOD ARA, AUTHORIZING PR TO UTILIZE THE SPACE AVAILABLE OF THE ISBT, JALANDHAR FOR THE PURPOSE OF ADVANCE ON BEHALF OF ITS CLIENTS, AT THE ANNUAL LICENSE FEE OF RS. 54,00,000/- FOR THE ENTIRE CONCESSION PERIOD, AS REFERRED TO IN THE CON CESSION AGREEMENT ENTERED INTO BETWEEN THE GOVT. OF PUNJAB AND M/S MSK PROJEC TS (INDIA) LTD., VADORA. THE PR WAS ALSO UTILIZING SPACE ON OTHER DI FFERENT BUILDINGS IN THE CITY AND WAS PAYING CHARGES AGAINST THIS FACILITY. WHILE DOING SO, TDS @ 1% WAS BEING MADE OUT OF THE PAYMENTS MADE TO VARIO US PERSONS INCLUDING M/S MSK PROJECTS (INDIA) LTD., UNDER THE PROVISIONS OF SECTION 194C OF THE ACT. THE AO, HOWEVER, WAS OF THE OPINION THAT THE T DS OUGHT TO HAVE BEEN MADE UNDER SECTION 194 I OF THE ACT, @ 20% OR 15%, SINCE THE PR WAS PAYING RENT TO THE PARTIES, MAKING THE PROVISIONS O F SECTION 194 I OF THE ACT APPLICABLE. IT WAS, THEREFORE, THAT THE PR WAS TREA TED AS AN ASSESSEE IN DEFAULT UNDER THE PROVISIONS OF SECTION 201(1)/201(1A) OF T HE ACT AND THE DEMAND WAS CREATED FOR BOTH THE YEARS. THE LD. CIT(A) HELD THE PROVISIONS OF SECTION 194 I OF THE ACT TO BE NOT APPLICABLE AND T HE PROVISIONS OF SECTION 194 C OF THE ACT SHOULD HAVE RIGHTLY BEEN INVOKED B Y THE PR. THE DEMAND CREATED WAS, HENCE, DELETED. I.T.A. NO. 559 & 560/ASR/2014 ASSESSMENT YEAR: 2009-10 & 2010-11 3 3. AS BEFORE THE AUTHORITIES BELOW, THE STAND OF TH E ASSESSEE REMAINS THAT IT DOES NOT HAVE ANY LAND / BUILDING AND THEREFORE, NO EXISTENCE OF ANY RELATIONSHIP OF LAND LORD AND TENANT WITH ANYONE WH OMSOEVER. THE PROVISIONS OF SECTION 194 I OF THE ACT, THEREFORE, DID NOT COME INTO PLACE AT ALL. THE LD. DR, ON THE OTHER HAND, HAS SOUGHT TO P LACE RELIANCE ON THE ORDER OF THE AO. 4. IT REMAINS UNDISPUTED THAT IN THE REMAND REPORT FURNISHED BY THE AO BEFORE THE LD. CIT(A), IT WAS STATED THAT THE RECEI PT FROM THE PR STOOD REJECTED IN THE RETURN OF M/S MSK PROJECTS (INDIA) LTD. FOR ASSESSMENT YEAR 2008-09 AND IT WAS FOR THIS REASON THAT NO LIABILIT Y ON ACCOUNT OF SHORT TDS FOR ASSESSMENT YEAR 2009-10 WAS CREATED IN RESPECT OF THE PAYMENTS MADE. THE DEMAND WAS RAISED ONLY UNDER SECTION 201(1A) OF THE ACT. M/S MSK PROJECTS LTD. HAD SHOWN THE ENTIRE RECEIPT FROM TH E PR AS ITS INCOME FROM CONTRACT IN THE RETURN FOR AY 2010-11 AS SUCH, OBVI OUSLY, THE PR COULD NOT BE TREATED AS AN ASSESSEE IN DEFAULT CONSIDERING TH E DEMAND RAISED UNDER SECTION 201(1) OF THE ACT REGARDING THE PAYMENT MAD E TO M/S MSK PROJECTS LTD.. THIS HAS DULY BEEN TAKEN INTO CONSIDERATION B Y THE LD. CIT(A). MOREOVER, UNDISPUTEDLY, RECOVERY STANDS DULY MADE. THE MATTER WAS NOT APPEALED AGAINST BY THE DEPARTMENT. I.T.A. NO. 559 & 560/ASR/2014 ASSESSMENT YEAR: 2009-10 & 2010-11 4 5. IN VIEW OF THE ABOVE, FINDING NO ERROR THEREIN, THE ORDER OF THE LD. CIT(A) FOR BOTH THE YEARS UNDER CONSIDERATION IS CO NFIRMED, REJECTING THE GRIEVANCE SOUGHT TO BE RAISED BY THE DEPARTMENT. 6. IN THE RESULT BOTH THE APPEALS ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 12/06/2015. SD/- SD/- (PRAMOD KUMAR) ( A.D. JAIN) ACCOUNTANT MEMBER JUDIC IAL MEMBER DATED: 12.06.2015 AG COPY TO: 1.THE APPELLANT, 2. THE RESPONDENT, 3. THE CIT, 4. THE CIT(A), 5. THE DR BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR