TMI Blog2014 (7) TMI 991X X X X Extracts X X X X X X X X Extracts X X X X ..... sion of PGCIL can be said to have been made for 'the use of ' these transmission lines or other related infrastructure - Section 194 I has no application so far as the payments for transmission of electricity is concerned – Decided against Revenue. Penalty u/s 271(1)(c) – Held that:- Addition in AY 2006-07 has been deleted by the tribunal - Therefore there is no liability upon the assessee to pay taxes on the additions made therefore, it cannot be asked to pay penalty equivalent to taxes sought to be evaded - once there are no taxes sought to be evaded then, there cannot be any penalty u/s 271 (1)(c) – CIT(A) has rightly held that no penalty is imposable upon the assessee because additions have already been deleted – Decided against Revenue. - ITA No.3526,3527,3528,3529 and 3530 /DEL/ 2013 - - - Dated:- 9-5-2014 - Shri S. V. Mehrotra And Shri Shri R. P. Yadav,JJ. For the Appellant : Smt. Nidhi Srivastava, SR. DR For the Respondent : Sri H. P. Agrawal, CA ORDER Per Bench: The present five appeals are directed at the instance of revenue against the separate orders of Ld. Commissioner of Income Tax (appeals) dated 28.3.2013. ITA No. 3527 is an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... NTPC up to the point of assessee where it was required by PGCIL. The Ld. Assessing Officer in that case observed that assessee had paid rental for the use of transmission line. Therefore, It ought to have deduct TDS u/s 194(I) of the Act, whereas assessee has deducted the TDS u/s 194(C). The tribunal has allowed the appeal of assessee and held that TDS was not to be deducted u/s 194(I). 6. Ld. Departmental Representative was unable to controvert the contention of the Ld. Counsel for the assessee. 7. We have duly considered the rival contention and gone through the record carefully the ITAT in assessment year 2005- 06 has consider an indentical issue. The finding recorded by the ITAT read as under : We have considered the facts of the case and submissions made before us. In the case of Bharti Cellular Ltd. (Supra), the Hon ble Court by applying the rule of noscitur a sociis, has come to a conclusion that involvement of human element is essential for rendering any service as technical service . In the case of Skycell Communications Ltd. (supra), the stress has been laid on imparting technical knowledge. However, it cannot be said whether any one of the element or both th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such delivery points of NTPC . It is pursuant to these obligations that the assessee, along with other bulk power beneficiaries - namely M P State Electricity Board, Gujarat Electricity Board, Maharashtra State Electricity Board, Electricity Department - Government of Goa, Administration of Daman Diu, and Electricity Department - Administration of Dadra and Nagar Haveli, has entered into a 'Bulk Power Transmission Agreement' with PGCIL. The preamble of this agreement, inter alia, notes that the PGCIL is desirous to transmit energy from the Central Sector Power Station(s) to the Bulk Power Beneficiaries and that the said Bulk Power Beneficiaries are desirous of receiving the same through POWERGRID transmission system on mutually agreed terms and conditions . This agreement provides that POWERGRID shall operate and maintain the transmission system belonging to it in the Western Region as per agreed guidelines and the directives of the Western Regional Electricity Board and the Regional Load Dispatch Centers, and cooperate with the Bulk Power Beneficiaries of the Region, so as to maintain the system parameters within acceptable/reasonable limits except where it is necessa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l, at the time of credit of such income to the account of the payee or at the time of payment thereof in cash or by the issue of a cheque or draft or by any other mode, whichever is earlier, deduct income-tax thereon at the rate of - (a) two per cent. for the use of any machinery or plant or equipment; and (b) ten per cent for the use of any land or building (including factory building) or land appurtenant to a building (including factory building) or furniture or fittings: Provided that no deduction shall be made under this section where the amount of such income or, as the case may be, the aggregate of the amounts of such income credited or paid or likely to be credited or paid during the financial year by the aforesaid person to the account of, or to, the payee, does not exceed [one hundred eighty thousand rupees] : Provided further that an individual or a Hindu undivided family, whose total sales, gross receipts or turnover from the business or profession carried on by him exceed the monetary limits specified under clause (a) or clause (b) of section 44AB during the financial year immediately preceding the financial year in which such income by way of rent is credited or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or transmission to electricity to various other entities. The transmission lines continue to be not only under control and possession of the PGCIL in legal terms, but, what is more important, these transmission lines are effectively in the control of PGCIL, without any involvement of the assessee in actual operations of the same. On these facts, in our humble understanding, the assessee has made the payments for transmission of electricity in which transmission lines have been used rather than for the use of transmission lines per se. The payments could be said to have been made for the use of transmission lines in a case in which the object of consideration for which payments are made was the use of transmission lines simplictor, and such a use by the assessee does not extend beyond the transmission of electricity through such lines in the sense that the same transmission lines continue to be in the control of PGCIL for transmission of electricity for other entities and for all practical purposes. Even as electricity purchased by the assessee is transmitted to the assessee from the NTPC busbar to its landing points, the same transmission lines continue to be engaged in similar t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... further, with an illustration which is a variation of the illustration used by the Andhra Pradesh High Court in the case of Rashtriya Ispat Nigam Ltd. v. CTO. (i) A customer engages a carrier (transport operator) to transport one consignment (a full lorry load) from place A to B, for an agreed consideration which is called freight charges or lorry hire. The carrier sends its lorry to the customer's depot, picks up the consignment and proceeds to the destination for delivery of the consignment. The lorry is used exclusively for the customer's consignment from the time of loading, to the time of unloading at destination. Can it be said that right to use of the lorry has been transferred by the carrier to the customer ? The answer is obviously in the negative, as there is no transfer of the use of the lorry for the following reasons : (i) The lorry is never in the control, let alone effective control of the customer; (ii) the carrier decides how, when and where the lorry moves to the destination, and continues to be in effective control of the lorry; (iii) the carrier can at any point (of time or place) transfer the consignment in the lorry to another lorry; or the carri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he case Chhattisgarh State Electricity Board, we are of the view that Ld. Commissioner of Income Tax (appeals) has appreciated the controversy in right prospective and no interference is called for. Therefore, ITA No. 3526,3528,3629,3530 are dismissed. 10. In ITA no. 3527 in this appeal revenue is impugning deletion of penalty amounting to ₹ 59271691 imposed u/s 270 (1) C of the Act. Section 271 (1) (C) provides ; if the assessing officer or the commissioner (appeal) or the commissioner in the course of any proceeding under this act, is satisfied that any person (a) XXXXXX (b) XXXXXX (c) has concealed the particulars of his income or furnished in accurate particulars of such income. (d) XXXXXX he may direct that such person shall pay by way of penalty -: (I) XXXXXX ; (II) XXXXXX ; (III) in the case referred to in clause C or clause d, in addition to tax, if any, payable by him, a sum which shall not be less than , but shall not exceed three times, the amount of tax sought to be evaded by reason of the concealment of particulars of his income or the furnishing of inaccurate particulars of such income; Thus bare perusal of the section suggests ..... X X X X Extracts X X X X X X X X Extracts X X X X
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