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2016 (12) TMI 240 - AT - Income TaxTDS u/s 194I - TDS towards sublease of 5 Bigha land - Held that:- This payment of ₹ 3 lacs paid by the assessee to Suzlon Energy Limited towards sublease charges for 5 bigha land at Baramsar, Tehsil and District Jaisalmer, Rajasthan for setting up windmill project is not covered within the ambit and mandate of Section 194-I of the Act and no tax is deductible at source as the payment is made albeit as sublease charges for acquiring the rights in property which is akin to ownership rights. Common infrastructure facilities as detailed above require rendering of services associated with these infrastructure facilities for availing these infrastructure facilities which are in the nature of payment to contractor for carrying out the work associated with the utilization of these common infrastructure facilities. These are payments which are contractual payment for provision of various common infrastructure facilities by Suzlon Developers Private Limited to the assessee and is covered u/s 194-C of the Act. The assessee has claimed that the lower deduction certificate was issued by ACIT in favour of Suzlon Developers Private Limited to deduct tax at source @0.55% on contractual payments during the financial year 2003-04 which was produced by the payee (pb/page 19). In our considered view,this payment of ₹ 3 lacs was covered under the provisions of Section 194-C of the Act and the assessee has defaulted in not deducting tax at source u/s 194-C of the Act on this payment of ₹ 3 lacs to Suzlon Developers Private Limited. The verification is required from the side of A.O. w.r.t. claims of the assessee that the said Suzlon Develoeprs Private Limited hold lower deduction certificate issued by Revenue u/s 197(1) of the Act as also the claim of the assessee that the said Suzlon Develoeprs Private Limited has duly paid taxes on these payment of ₹ 3 lacs paid by the assessee( page 19-20/pb) and accordingly we set aside and restore this issue to the file of the A.O. with a direction to verify the afore-stated contentions of the assessee that M/s Suzlon Developers P. Ltd. has produced TDS certificate issued u/s 197(1) of the Act in their favour for the impugned assessment year 2004-05 for lower deduction of tax at source @0.55% on contractual payments and also that they have duly paid the taxes to Revenue after including afore-stated receipts.
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