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2016 (10) TMI 409 - AT - Income TaxTDS liability w/o taking into consideration the service tax - Held that:- Having considered the facts of the case and system of accounting followed by the assessee we find that the assessee has rightly deduced TDS on payment basis without taking into consideration the service tax and the AO, in our opinion, was not correct in applying deemed service tax on the payment made. Similarly, the ld.CIT(A) has also erred in holding that the TDS was deductible on the service tax component if charged in the bills not otherwise. In our opinion, no TDS is required to be deducted as the assessee was following cash system of account and accordingly, grounds no.1,2 and 3 are allowed in favour of the assessee. T.D.S. u/s 194C - payment made to Urvi Communication for telecasting short film on Air pollution and Noise Pollution in the public interest on Doordarshan - Held that:- We find that in this case payment has been made to M/s Urvi Communication and Prop. Urvi Deshmukh for the purpose of telecasting short film on Doordarshan on Air Pollution and Noise Pollution on ETV and Sub-TV at the time of Deewali. The ld. AR submitted that the payment was made for telecasting short film on Doordarshan and no TDS was required to be deducted at all and prayed that the order of the ld.CIT(A) be set aside on this issue and the ground raised by the assessee be allowed by allowing the appeal of the assessee. On the contrary, the ld.DR heavily relied on the orders of authorities below. We find that the payment is made through intermediary for further making payment to Doordarshan and therefore we are in agreement with the findings recorded by the ld. CIT(A) that the payment made to these parties were of the nature of contractual and the TDS was to be deducted u/s 194C of the Act - Decided against assessee Charging Interest u/s 201 - Held that:- After going through the provisions of section 201(1A), we find some merit in the argument of the ld. AR that the interest was not to be charged from the beginning of the financial year the argument of the ld.AR that the same was to be charged from the date of assessment year is not convincing. It has been clearly provided in the section that interest has to be calculated from the date on which the TDS is deductible to the date of actual payment of such TDS. But in the instant case, the ld. CIT(A) has held that the interest be calculated up to the date of filing of return by the deductee. In our opinion, the interest should be calculated from the date on which such TDS was deductible to the date of filing of return of income by deductees. Accordingly, we direct the AO to charge interest from the date on which the TDS was deductible to the date of filing of return of income of the deductees. The order of the ld.CIT(A) is set aside and the AO is directed accordingly. The ground taken by the assessee is partly allowed. TDS u/s 194J OR 194C - payment made to Chemtrol Engineers Ltd on account of AMC of mobile monitoring vans - Held that:- We find that the said repair services rendered by M/s Chemtrol Engineers Ltd are not technical as it is a AMC contract for maintenance of machines.Therefore we are not in agreement with the view of the ld.CIT(A) on this issue that AMC is a technical service and liable to TDS u/s 194 of the Act . There is merit in the submissions of the ld.AR that the payment made to M/s Chemtrol Engineers Ltd are covered by the provision of section 194C which is applicable to general contract. In our opinion M/s Chemtrol Engineers Ltd providing services for installation of quality monitoring system and operation and maintenance and installation of machinery and maintenance of contracts are covered by the provision of section 194C of the Act. Accordingly, we set aside the order of ld. CIT(A) on this issue by holding that the section 194C is applicable in this case and not 194J. The AO is directed accordingly and this ground is allowed.
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