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2018 (1) TMI 549 - AT - Income TaxTDS u/s 194J - awarding right to supply water to consumers in Haldia - scheme of sharing of amount deposited in the revenue collection account, the assessee is taking and accounting only license fee as income in its books of account - Held that:- The assessee did not engage HWML to render any service. Under the said agreement, dt. 18th July, 2008, the assessee transferred to HWML, for an agreed consideration and for a specified period, its right to supply water to consumers in Haldia and conferred the right to HWML to charge and collect the charge thereto directly from the consumers. The terms & conditions of such transfer, is that HWML shall operate and maintain the existing facilities and establish, operate and maintain the new facilities at its cost. The assessee was to share 50 per cent of the cost of rehabilitation/replacement of the existing facility subject to an upper limit of ₹ 5 Crores. The assessee was also to share the increase in the power cost over the base power tariff, equally with HWML. During the currency of the agreement, the assessee was to receive only license fee and an agreed share in additional revenue from HWML. The revenue from Water Bills raised belonged to HWML. Thus there is no payment of any amount of any kind for any service by the assessee to HWML. Under these circumstances, the conclusion of the Assessing Officer that Section 194J of the Act, applies, is bad in law. - Decided in favour of assessee.
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