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2023 (9) TMI 156 - AT - Income TaxTDS u/s 194C and/or 194H - assessee who is a Joint Venture made a payments to one of its constituents for execution of work awarded to it and payments made to another constituent as compensation, constitutes payment in the nature of commission - HELD THAT:- Considering the facts and circumstances of the case fulfilment of the attributes of not treating a JV as an AOP prescribed under CBDT Circular No. 07 of 2016 dated 07.03.2016 ,as issued considering the dispute in respect of consortium contracts which are formed to implement large infrastructure projects, we are of the considered view that assessee JV does not fall in the category of AOP under the Act. Further, there does not exist a relationship of a contractor and sub-contractor within the meaning of section 194C, therefore, question of deduction of tax at source does not arise. Once there is no liability to deduct tax at source, holding assessee JV as assessee in default is also not tenable. Application of sec 194H for the compensation paid to RAMKY, out of the gross bills received from NHDICL, by treating it as commission. Definition of commission as contained in section 194H does not befit the payment of 2.25% made to RAMKY to subject it to tax deduction at source. From the definition of commission contained in Explanation to section 194H in the present case, compensation paid by assessee JV is not for acting on behalf of JV for any service. Further, there are no services taken by the JV in the course of buying or selling of goods nor there is any transaction relating to any asset, valuable articles or thing. Accordingly, the payment is not in the nature of commission and section 194H does not get attracted. Hence, assessee JV is not to be treated as assessee in default. Assessee cannot be held to be the assessee in default u/s. 201(1) and liable for interest charged u/s. 201(1A) - Decided in favour of assessee.
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