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2016 (6) TMI 90 - ITAT VISAKHAPATNAMTDS u/s 194J OR 194C - service provided by the contractor as technical services - assessee in default u/s 201(1)- whether the contract entered into by the assessee with M/s. Divine Establishment, is one for supply of manpower for execution of works contract attracting TDS provisions of section 194C or is the contract for providing technical services attracting the provisions of section 194J? - Held that:- whether the contract entered into by the assessee with M/s. Divine Establishment, is one for supply of manpower for execution of works contract attracting TDS provisions of section 194C of the Act or is the contract for providing technical services attracting the provisions of section 194J of the Act Once the recipient assessee has paid the taxes on the considerations received from the deductor, than the A.O. cannot hold the assessee as an assessee in default in view of the provisions of section 191(1) of the Act and also in view of the circular issued by the CBDT vide circular no.275/201/95/IT(b) on 29.1.1997. This position has further strengthened by the decision of Hon’ble Supreme Court, in the case of Hindustan Coca-Cola Beverages Pvt. Ltd. (2007 (8) TMI 12 - SUPREME COURT OF INDIA ) wherein held that no demand can be visualized, once the assessee proved to the satisfaction of the officer incharge of TDS that the recipient has considered the payment and discharged the tax liability. In the present case on hand, on perusal of the documents available on record, we find that the assessee has furnished the income tax returns on the recipient for the relevant assessment years. The assessee also furnished a certificate from the recipient, wherein the recipient has categorically stated that he has paid the taxes on the consideration received from the assessee company. Therefore, we are of the opinion that the A.O. was not correct in coming to the conclusion that the assessee as an assessee in default u/s 201(1) of the Act. Therefore, we are of the view that on both counts, the demand raised by the A.O. cannot sustain in the eyes of law. - Decided in favour of assessee
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