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2019 (1) TMI 642 - AT - Income TaxLiability to collect TCS - Demand raised u/s 206C(6A)/206C(7) - treating the assessee as “assessee-in-default” for not collecting TCS from the collecting party - case of the assessee is that, the collecting entity is doing job of toll collection from different plazas on behalf of the assessee and the collection amount daily deposited in the designated bank of the assessee-company - Held that:- CIT(A) has gone through all the relevant material and analysed the issue in details including the agreement entered into by the assessee-company and the collecting entity, and came to a conclusion that the said collecting entity’s role was restricted to collecting the toll amount and deposit the same on daily basis in bank account of the company and it has no right on any part of the toll collection. The ld.AO has construed the collection of toll with right of toll collection being transferred to the entity, which is not correct in the present case. Considering the scope and nature of the work carried out by the collecting entity, it clearly shows that activities of collecting toll fees as entrusted by the assessee was not a contract within the meaning of section 206C and will not attract provisions of section 206C(1C) of the Act, rather it was in the nature of outsourcing of job for collection of user fees. See ACIT, BHUBANESWAR VERSUS PROJECT DIRECTOR, NATIONAL HIGHWAY AUTHORITY OF INDIA, PROJECT DIRECTOR, PARADIP PORT ROAD CO. LTD., BHUBANESWAR [2013 (1) TMI 975 - ITAT CUTTACK] - Decided in favour of assessee.
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