TMI Blog2015 (5) TMI 111X X X X Extracts X X X X X X X X Extracts X X X X ..... the context of deduction of tax at source on payment of Gas Transportation Charges has clarified that in case transportation charges paid to a third party transporter of gas, either by the owner/ seller of the gas shall continue to be governed by the appropriate provisions of the act 1.e. 194C shall be deductible on such payments at the applicable rates. In the case of Kribhco Shyam Fertilizers Ltd. [2015 (3) TMI 490 - ITAT LUCKNOW], it was held that from Circular No. 9/2012 issued by CBDT it was clear that whenever gas is transported by seller to point of delivery, transportation charges of gas would be embedded in cost of gas, though transportation charges are claimed separately or along with cost of gas in sale bill and nature of such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessee had paid ₹ 6.59 crores as transportation charges to Gujarat State Petronet Ltd. (GSPL) and had deducted tax u/s 194C of the Act. On perusing the agreement entered by the Assessee with GSPL, A.O noticed that Assessee had entered into agreement for hiring of Gas Pipeline and had made payment for utilization of such pipeline equipments, the hiring of pipeline was on a regular basis, A.O was therefore of the view that the payments made for hiring of pipelines was covered u/s 194I of the Act and the deduction made by the Assessee u/s. 194C was not correct. He accordingly worked out the short deduction of tax to the extent of ₹ 1,43,90,073/-and considered the Assessee to be deemed defaulter u/s 201(1) and being liable to int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... considered as a works contract and accordingly, would subject to IDS under section 194C of the Act. Moreover, the appellant correctly pointed out that each section under Chapter XVII deals with a particular kind of payment to the exclusion of all other sections in the Chapter. Accordingly, when a payment is taxable under a particular section, it cannot be taxable under another section. Therefore when the appellant has correctly applied the provisions of section 194C while making payment of transportation charges to GSPL, the question of applying provisions of section 1941 to the same would not arise. Hence, the action of AO is not justified and the appeal filed by the appellant company is hereby allowed. 4. Aggrieved by the order of CIT( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is clarified that in case the Owner/Seller of the gas sells as well as transports the gas to the purchaser till the point of delivery, where the ownership of gas to the purchaser is simultaneously transferred, the manner raising the sale bill (Whether the transportation charges are embedded in the cost of gas or shown separately) does not alter the basic nature of such contract which remains essentially a contract for sale and not a works contract as envisaged in Section 194C of the Act. Hence in such circumstances, provisions of Chapter XVII-B of the Act are not applicable on the component of Gas Transportation Charges paid by the purchaser to the Owner/Seller of the gas. The use of different modes of transportation of gas by Owner/S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on apart from seller of gas, transportation charges paid by buyer to transporter shall be governed by provisions of section 194C-TDS shall be deductible on such payment to third party by buyer at applicable rates-Assessee had admitted that it had also purchased gas from other sellers apart from GAIL but same was transported by GAIL-Assessee had paid transmission charges to GAIL and also deducted TDS on payment-In such cases transmission charges paid by assessee to GAIL attracted provisions of section 194C as per circular-But this aspect had not been clarified by any of lower authorities as they treated entire payment of transmission charges as had been made u/s 194I or 194C Order of CIT(A) set aside-Matter restored to file of AO with direct ..... X X X X Extracts X X X X X X X X Extracts X X X X
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