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2017 (1) TMI 242 - HC - Income TaxTDS u/s 194H or u/s 194J - applicability u/s 40(a)(ia) - TDS on Services Charges made to RCDF - Held that:- Tribunal as held apropos the payment to RCDF cess, it has not been demonstrated by the Department that any managerial services in this connection have been rendered to assessee by RCDF qua this amount. RCDF is an apex cooperative body and cess is paid to it by virtue of federal structure in Rajasthan cooperative set up. Thus as far as assessee's business is concerned, there is no rendering of any managerial services by RCDF as alleged by the AO u/s 194H and upheld ld. CIT(A) u/s194J. Since there is no rendering of any services and the payment is not made for any managerial services to RCDF, therefore, payment can neither be held as liable for TDS u/s 194H of the Act as commission/brokerage as held by the AO nor u/s 194J for rendering any managerial services as held by the ld. CIT(A). In view thereof, we hold that assessee's impugned payment to RCDF are not liable for TDS. It is true that the counsel for the appellant contended that the the payment which has been made till 16.12.2013 (Annexure-4) on completion of financial year will be applied or not. Therefore, we are not confirming the reasoning adopted by the Tribunal but confirming only the conclusion drawn by the Tribunal. However, question regarding Section 194J & H of the Income Tax Act. It is payment made on the basis of Federation and Membership. It is on the ground of mutuality payment is made.
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