TMI Blog2015 (8) TMI 80X X X X Extracts X X X X X X X X Extracts X X X X ..... b-contractor. This being so, the TDS liability of the assessee in terms of Section 194C is exigible @ 1% which has rightly been upheld by the ld. CIT(A). Hence, we find no infirmity in order of the ld. CIT(A) which is upheld. - Decided against revenue. - ITA Nos. 284, 285 & 286/JP/2014, ITA No.4/JP/2013 - - - Dated:- 10-4-2015 - R P Tolani, JM And T R Meena, AM,JJ. For the Appellant : Shri Kailash Mangal (JCIT-DR) For the Respondents : Shri Siddharth Ranka Shri Muzaffar Iqbal, Adv. ORDER Per R. P. Tolani, JM. This is a set of four appeals filed by the Revenue against two different orders passed by ld. CIT(A)-III, Jaipur dated 25-02-2014 for the assessment year 2007-08, 2008-09 and 2010-11 and by ld. CIT(A), Alwar dated 19-10-2012 , raising following common ground in all the appeals. The ld. CIT(A) has erred in law and on facts in holding that the assessee was liable to deduct tax at source @ 1% instead of 2% u/s 194C of the I.T. Act on payments made by the assessee to M/s. Max Logistics (P) Ltd. treating it as a subcontractor instead of contractor. 2.1 Brief facts of the case are that the assessee is a State Govt. Undertaking incorporated with the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... actor and relations of M/s. Max Logistics (P) Ltd. with assessee as a sub-contractor liable for TDS @ 1% by following observations. 4.3 I have carefully considered the findings of the AO as also the submission of the appellant. It may be noted that the only dispute in these three appeals is that the appellant has made payment to M/s. Logistic (P) Ltd. and the payment made to this concern were on account of work done which was in the nature of sub-contract and accordingly the appellant has deducted TDS @ 1% . On the other hand, AO s case is that payments made to M/s. Logistic (P) Ltd. were of contact nature and TDS was to be deducted @ 2%. Accordingly, the AO has determined short deduction of TDS and assessment order charged interest u/s 201(1A) of I.T. Act and demand raised in all the three assessment years as discussed in para 4.2. The AO s case is that the assessee has made a contract with M/s. Logistic (P) Ltd. for performing incidental services at the port or on the way during the transit and that such contract was of independent nature on which TDS @ 2% was to be deducted. On the other hand , the appellant case is that the appellant was appointed custodian of imported gods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty till the date of actual payment of tax in the light of decision of Hon'ble Supreme Court in the case of CIT vs. Eli Lilly Company (I) (P) Ltd. 312 ITR 225. The AO is directed to compute the interest u/s 201(1A) of I.T. Act accordingly. 2.3 Now the Revenue is before us against the order of the ld. CIT(A); ld. DR contends that the survey was carried out on 07-12-2009 in the premises of the assessee, a Rajasthan State Govt. Undertaking and it was found that the assessee was not deducting proper TDS. According to the public notice no. 20/89-Customs, it is clearly stated that RAJSICO has been termed as the custodian of the goods at ICDs and the charges received by it cannot be covered under any contractual payment and consequently its arrangement with M/s. Logistic (P) Ltd. should be considered as of a contract rather than sub-contractor. Status of RAJSICO was that of a custodian with a liberty to assign contract to any party to handle the works. Thus RAJSICO in its own right could issue contracts. From the contents of the agreement dated 13-06- 2007, it is amply clear that M/s. Logistic (P) Ltd. was a contractor and not a sub-contractor for the purpose of this agreement, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the relationship between the Commissioner of Customs Central Excise, Jaipur in respect of ICD, Jodhpur with assessee is not in the nature of a contract. The ld. CIT(A) after reading the public notification and material available on record has held the relationship to be that of contract. In this back ground, it will be worthwhile to refer the public notice No. 15/95 (Customs) dated 19-07-1995 which appoints the assessee as a custodian of cargo handling till they are exported. The important paras of this public notice are as under:- (ii) if any imported gods meant for export are pilfered after unloading ad loading thereof in the Custom area while in the custody of The Rajasthan Small Industries Corporation Ltd. then in terms of provisions as laid down u/s 45(3) of the Customs Act, 1962, they shall be liable to pay duty on such goods as applicable.. (iii) The Rajasthan Small Industries Corporation Ltd., Jaipur as custodian, shall pay the cost recovery charges of customs officers posted at ICD, as prescribed in advance, on half year basis. (iv) The Rajasthan Small Industries Corporation Ltd., Jaipur as Custodian shall execute a bond for ₹ 3.00 crores with surety. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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