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2017 (7) TMI 429 - HC - Income TaxTDS u/s 194I - TDS on rent to AAI - Held that:- The Court is satisfied that in the present case, the payment made by the Assessee to AAI under the LA is ‘rent’ within the meaning of Section 194-I of the Act. Question (i) in the quantum appeals is, therefore, answered in the negative, i.e., in favour of the Revenue and against the Assessee. Penalty under Section 271C - non tds deduction - Held that:- The question whether in the present case the payment of royalty for the right to operate the executive lounge is in fact ‘rent’ under Section 194-I of the Act, was a debateable issue. The fact that the LA termed this payment as 'royalty' may have given rise to a reasonable doubt whether it should nevertheless to be treated as 'rent'. The Court is of the view that in the circumstances, the Assessee can take advantage of the exemption provided under Section 273 B of the Act by contending that there were bonafide reasonable grounds for the Assessee not to have deducted tax at source from the payment made to AAI under the LA. This was not a case where the Assessee could be said to have deliberately avoided making payment of tax so as to attract penalty under Section 271 C of the Act. - Decided in favour of assessee.
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