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2015 (7) TMI 519 - AT - Income TaxTds deduction - section 194I OR under section 194C - assessee has deducted tax @2% on the payments made to the concerned persons in accordance with section 194C of the Act treating the payments as contract for service but whereas the assessing officer has treated the payment as a lease rental and therefore he opines that the tax to be deducted at source ought to be at 10% in accordance with section 194I - assessee in default - CIT(A) found the assessee has discharged its onus of having fulfilled the conditions laid down in terms of proviso to section 201 of the Act and therefore has to succeed in these appeals - Held that:- The income from "warehousing" is chargeable under the head "Business Income" and not under the head "income from House Property" as held by jurisdictional High Court in the case of CIT vs. NDR Warehousing Pvt. Ltd (2014 (12) TMI 189 - MADRAS HIGH COURT ) and also by the Bombay High Court in the case of Nutan Warehousing Company Ltd vs. DCIT [2010 (2) TMI 397 - BOMBAY HIGH COURT]. These facts are not controverted by the Department Representative. Being so, this is an admitted fact that once income of the letout of ware housing is treated as business income then tax deduction at source to be made u/s.194C of the Act. Being so, in our opinion the Commissioner of Income Tax (Appeals) is justified in observing that the assessee is liable to deduct tax at source u/s.194C, since the nature of the service rendered by the assessee is not only providing space but also providing warehousing activity and the income derived from such activity is "business income" and not income from "house property". Further, if the tax deducted and the same was deposited in the Government account, the due credit shall be given to that extent. If the recipient has declared income in their return of income, the assessee cannot be liable for payment of TDS once again in view of the judgment of Supreme Court in the case of Hindustan Coca Cola Beverage P. Ltd vs CIT [2007 (8) TMI 12 - SUPREME COURT OF INDIA] wherein it has been held that where deductee, recipient of income, has already paid taxes on amount received from deductor, department once again cannot recover tax from deductor on same income by treating deductor to be assessee in default for short fall in its amount of tax deducted at source. However, the department is at liberty to recover the amount of interest, if any, arising out of delayed payments of taxes under the provisions of Section 201(1A) of the Act from assessee. - Decided against revenue.
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