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Income Tax Officer (TDS) , Alwar. Versus M/s Krishi Upaj Mandi Samiti, Dausa.

Tds u/s 194C - non deduction of TDS - CIT(A) deleting the demand raised by A.O. and interest payable u/s 201(1A) - Held that:- It is found that there is no contractor-contractee relationship between the assessee and the RSAMB. The RSAMB is a parental body of Krishi Upaj Mandi Samiti. The Krishi Upaj Mandi Samiti is required to make a contribution out of its income to the marketing board and the marketing board is required to utilize these receipts on improvement of the agricultural market in the .....

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a certain percentage of its income and is obligatory on the part of assessee. Therefore, no TDS is liable to be deducted U/s 194C and 194J of the Act. Accordingly, order of the Ld. CIT(A) is upheld. - Decided in favour of assessee. - ITA No. 18/JP/2013 - Dated:- 10-4-2015 - SHRI R.P. TOLANI, JM & SHRI T.R. MEENA, AM For The Appellant : Shri Rajesh Ojha (JCIT) For The Respondent : Shri R.S. Poonia (C.A.) ORDER PER: T.R. MEENA, A.M. This is an appeal filed by the revenue against the order date .....

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1961. 2. Both the grounds of the appeal are directed against the order of the Ld CIT(A) against deleting of demand created on account of non deduction of tax U/s 201(1) and interest payable U/s 201(1A) of the Act. The ITO (TDS) observed that the assessee made payment to Executive Engineer, Rajasthan State Agriculture Marketing Board (in short the RSAMB), Dausa for construction at ₹ 74,80,179/-. Besides this, the assessee deductor had made contribution of ₹ 11,83,3309/- @ 10% to RSAMB .....

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ity of being heard to the assessee, which was replied by the assessee. After considering the assessee s reply, it has been held that RSAMB is an autonomous body and assessed to tax separately. The RSAMB is charging supervision and work charges on Samiti for the construction activity done by it. All these facts showed that the construction work done by RSAMB is covered U/s 194C and liable to deduct TDS on payment made to the Executive Engineer, Dausa. Further, Section 194J is also applicable on c .....

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ssing Officer, the assessee carried the matter before the learned CIT(A), who had allowed the appeal by observing as under:- 4.3 I have considered the case and submission filed by the AR. I am included to agree with the submission of the AR that so far as the payment to RSAMB for construction related work is concerned there is no contractor-contractee relationship. I rely on the finding of my ld. Predecessor in the case of KUMS, Bharatpur for A.Y. 2009-10 in appeal No. 369/09-10 where the appeal .....

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hich are owned by the Krishi Upaj Mandi Samiti. The Marketing Board is also required to give aid and grant to Krishi Upaj mandi Samiti to enable them to discharge their duties and functions satisfactorily. I also considered the CBDT Circular 741 dated 18.04.1996 Circular No. 745 dated 19.07.1996, Circular No. 22/68-ITB dated March 28/May 13, 1968 advise non-deduction of tax on interest which is wholly exempt from tax in the hands of the recipient. Where there is no liability of tax in the hands .....

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nce the contribution made is as per section 18A of the Rajasthan Agricultural Marketing Act 1961 whereby the certain percentage of its income is to be given as contribution to the Board. This amount is in turn spent by the RSAMB for the improvements of Agricultural Markets in the State and it cannot be said to be a fees for professional or technical services within the meaning of section 194J of the Act. I rely on the findings of my ld. Predecessor in the case of KUMS, Bharatpur for A.Y. 2009-10 .....

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rofessional or Technical services. The legal position has been discussed in preceding paras and also the RSAMB is exempted on the paying tax. So the Mandi Samiti is under no obligation to deduct tax at source and the provisions of section 194J cannot be attracted to the case of Mandi Samiti. In view of above discussion it is held that there was no liability to deduct tax by KUMS on the above said payments to RSAMB for construction work and for the contributions made as per section 18A of the Raj .....

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