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2016 (8) TMI 472 - AT - Income TaxTds u/s 194I - failure to deduct tax at source on payment made to RIICO - assessee in default u/s 201(1) - development charges paid by the assessee to Rajasthan State Industrial Development and Investment Corporation Limited (RIICO) towards allotment of land on lease of 99 years - Held that:- As decided in case of M/s. Gupta Fabtex (P) Ltd. vs. DCIT (TDS) [2016 (1) TMI 664 - ITAT JAIPUR] lease document has used the "Development charges" and "Economic rent" to be payable by the assessee. As the document has used two different phrases to connote different obligation therefore in our view development charges can not be read as rent within the purview of the section 194-I. further lease document has provided the consequences of non-payment of the development charges by the assessee, if the assessee failed to pay the development charges, as mentioned in the agreement, the possession was liable to be taken over by the RIICO, therefore the development charges can not be considered as rent.- Decided in favour of assessee Payment to M/s Rajasthan Technical University (RTU) on account of affiliation fee on which TDS was not deducted - appellant has claimed that the income of RTU is exempt under section 10(23C)(iiiab) - Held that:- The CBDT Circular No 4/2002 dated 16.7.2002 has been issued in the context of self-declaration by entities/institutions whose income is exempt under section 10 of the Act. In the said circular, the CBDT has clarified that in case of those funds or authorities or Boards or Bodies, by whatever name called, whose income is unconditionally exemption u/s 10 of the IT Act and who are statutorily not required to file return of income as per section 139 of the Income Tax Act, there would be no requirement for tax deduction at source since their income is anyway exempt under the Income Tax Act. The appellant has claimed that the income of RTU is exempt under section c(iiiab) of the Act. Where the income of RTU is exempt, in light of CBDT Circular, there is no requirement to deduct tax at source. In light of above, the AO is directed to verify from the concerned AO of RTU as well as independently from RTU whether the income of RTU is exempt under section 10(23C)(iiiab) of the Act. If the AO finds the same to be in order, the AO is directed not to treat the assessee in default u/s 201(1) of the Act and thereby not to recover any tax and interest u/s 201(1A) on payments to RTU. - Decided in favour of assessee for statistical purposes.
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