COMMISSIONER OF INCOME TAX, CHD V. EXECUTIVE ENGINEER CONTRUCTION DIVISION

ITA/832/2010

AI Insights

The case involves multiple appeals by the Commissioner of Income Tax (TDS), Chandigarh against the Executive Engineer Construction Division (now Deputy General Manager), Works Division, Operation Circle, DHBVN, Gurgaon. The appeals were related to the non-deduction of TDS on payments made under a composite contract for the erection of 33 KV electric lines/sub-stations, which included both the supply of material and the erection work. The core legal issue was whether the Income Tax Appellate Tribunal was correct in upholding the order of the CIT(A) that deleted the demand for non-deduction of TDS on the entire payments made under the contract. The Tribunal had previously determined that the contract was split into two distinct parts, and TDS was only applicable to the erection part under Section 194C of the Income Tax Act, 1961.

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 719003 (HC-CHANDIGARH)
• Appeal Type: Others
• Pronouncement Date: 09-11-2011
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Assessee Lawyers: YOGESH PUTNEY
• Keywords: Composite contract; Non-deduction of TDS; Supply of material; Erection of transmission lines
• Section: 194C

Judgement Text

"ITA No.832 of 2010 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Date of decision: 09.11.2011 ITA No.832 of 2010 (O & M) The Commissioner of Income Tax (TDS), Chandigarh ….Appellant Vs. Executive Engineer Construction Division (Now Deputy General Manager), Works Division, Operation Circle, DHBVN, M.G. Road, Gurgaon ….Respondent ITA No.833 of 2010 (O & M) The Commissioner of Income Tax (TDS), Chandigarh ….Appellant Vs. Executive Engineer Construction Division (Now Deputy General Manager), Works Division, Operation Circle, DHBVN, M.G. Road, Gurgaon ….Respondent ITA No.834 of 2010 (O & M) The Commissioner of Income Tax (TDS), Chandigarh ….Appellant Vs. Executive Engineer Construction Division (Now Deputy General Manager), Works Division, Operation Circle, DHBVN, M.G. Road, Gurgaon ….Respondent ITA No.835 of 2010 (O & M) The Commissioner of Income Tax (TDS), Chandigarh ….Appellant Vs. Executive Engineer Construction Division (Now Deputy General Manager), Works Division, Operation Circle, DHBVN, M.G. Road, Gurgaon ….Respondent ITA No.832 of 2010 2 CORAM: HON’BLE MR.JUSTICE HEMANT GUPTA HON’BLE MR.JUSTICE G.S.SANDHAWALIA Present: Mr.Yogesh Putney, Advocate for the appellant. HEMANT GUPTA J. (ORAL) This order shall dispose of ITA Nos.832 of 2010, 833 of 2010, 834 of 2010 and 835 of 2010 arising out of order passed by Income Tax Appellate Tribunal, Delhi Bench in ITA No 4750/DEL/2009 for the assessment year 2006-07; ITA No.4751/DEL/2009 for the assessment year 2007-08; ITA No.4752/DEL/2009 for the assessment year 2008-09; and ITA No 4749/DEL/2009 for the assessment year 2005-06. The Revenue has claimed the following substantial question of law: “Whether on the facts and circumstances of the case, the Ld. ITAT has rightly upheld the order of the CIT(A) deleting the demand raised for Non-deduction of TDS on the whole payments of the contract work done including execution of work and the contract supply of material being part of the same contract with the same contractors as required u/s 194C of the I.T. Act, 1961.” The assessee awarded contract to different contractors the work of erection of 33 KV electric lines/sub-stations including the work of laying poles and electric wires. The contract in question was a composite contract for erection of the transmission lines and for supply of material. The learned Income Tax Appellate Tribunal has recorded a finding of fact that the agreement was split into two parts – one for supply of material as per the specifications and other for erection of the same. The learned Tribunal returned a finding that tax was required to be deducted only from that part of the contract which dealt with erection of the ITA No.832 of 2010 3 transmission lines falling within the scope of Section 194C of the Income Tax Act. 1961. It is finding of fact that the contract was composite contract consisting of two parts – one for the supply of material and another for erection of electric poles. Therefore, no tax was required to deducted in respect of the contract for the purchase of material. In view of the said fact, we do not find any substantial question of law arises for consideration of this Court. Dismissed. (HEMANT GUPTA) JUDGE (G.S.SANDHAWALIA) 09.11.2011 JUDGE Sailesh/vimal "