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The Income Tax Officer, (TDS) , Bundi. Versus The Secretary, Krishi Upaj Mandi Samiti, Bundi.

2016 (1) TMI 247 - ITAT JAIPUR

TDS u/s 194J - payments made by the assessee to RSAMB on account of statutory contribution, against which the assessee received professional and technical services from RSAMB - 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 t .....

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A of the Rajasthan Agricultural Marketing Act, 1961, which is 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. - Decided in favour of assessee. - ITA No. 499 to 503/JP/2013 - Dated:- 10-11-2015 - SHRI R.P. TOLANI, JM & SHRI T.R. MEENA, AM For The Revenue : Shri Raj Mehra (JCIT) For The Assessee : Shri Tanuj Agarwal (CA) ORDER PER: BENCH These the appeals filed by the revenue arise against th .....

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ng the provisions of Section 194J of the Income Tax Act, 1961 (in short the Act) is applicable on payments made to Rajasthan State Agricultural Marketing Board (in short RSAMB). The ITO(TDS) observed that the assessee had made payments to RSAMB but no TDS has been deducted, which is covered U/s 194C of the Act. Non-deduction of tax at source on the above payments U/s 201(1) is worked out as under:- F.Y. Amount paid Amount of non deduction of tax at source U/s 201(1) Interest leviable U/s 201(1A) .....

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194J ₹ 1,42,08,099/- 7,97,074/- 3,58,683/- 2007-08 U/s 194J ₹ 2,13,09,168/- 24,14,329/- 7,96,728/- 2008-09 U/s 194J ₹ 2,07,62,284/- 23,52,367/- 4,93,997/- 2009-10 U/s 194J ₹ 1,36,22,044/- 15,43,378/- 1,54,337/- Total 79,22,627/- 22,60,413/- The ITO (TDS) gave reasonable opportunity of being heard to the assessee. After considering the assessee s reply in all the years, it has been held that a responsible persons was mandatory obliged to make deduction of tax at the time o .....

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01(1)/194J of the Act for A.Y. 2006-07 at ₹ 8,15,479/-, for A.Y. 2007-08 at ₹ 7,97,074/-, for A.Y. 2008-09 at ₹ 24,14,329/-, for A.Y. 2009-10 at ₹ 23,52,367/- and for A.Y. 2010-11 at ₹ 15,43,378/- and calculated interest U/s 201(1A) for A.Y. 2006-07 at ₹ 6,02,064/-, for A.Y. 2007-08 at ₹ 5,28,041/-, for A.Y. 2008-09 at ₹ 9,27,893/-, for A.Y. 2009-10 at ₹ 9,07,187/- and for A.Y. 2010-11 at ₹ 2,20,005/- and created a demand accordingly. 3 .....

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tractual / technical / professional payment. It is therefore held that contribution to RSAMB cannot be subject to TDS [being a statutory payment]. Payment to RSAMB for Construction & Repair of Roads and Buildings etc. The assessee regularly makes payment to Executive Engineer, RSAMB for repair, maintenance and construction of roads & buildings. The assessee claimed that there was no contractor-contractee relationship between the assessee and RSAMB. However, in my opinion it is not necess .....

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r specific purposes (for construction of roads etc.). However before treating the assessee in default, the A.O. should have gone through explanation to section 191 of the I.T. Act. For ready reference, the same is reproduced below:- In the case of income in respect of which provision is not made under this chapter for deducting income-tax at the time of payment, and in any case where income-tax has not been deducted in accordance with the provisions of this chapter, income-tax shall be payable b .....

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x directly, then such persons shall, without prejudice to any other consequences which he may incur, be deemed to be an assessee in default within the meaning of sub-section (1) of section 201, in respect of such tax. According to this section, a deductor cannot be treated as assessee in default if due taxes were directly paid by the deductee. In this case, the deductee RSAMB has filed its returns of income declaring either loss or nil income and was not liable to pay tax (as on the returned inc .....

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& 479/Kol/2012 has held as under: As far as recovery provisions are concerned, these provisions are set out in Section 201(1) which seeks to make goods any loss to revenue on account of lapse by the assessee tax deductor. However, the question of making goods the loss of revenue arises only when there is indeed a loss of revenue and the loss of revenue can be there only when recipient of income has not paid tax. Therefore, recovery provisions under section 201(1) can be invoked only when lo .....

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basis information, the Assessing Officer can very well ascertain the related facts about payment of taxes on incomes of the recipient directly from the recipients of income. It is not the revenue s case before us that, on the facts of this case, such an exercise by the Assessing Officer is not possible. It does put on additional burden on the Assessing Officer before he can invoke section 201(1) but that s how Hon'ble High Court has visualized the scheme of Act and that s how, therefore, it .....

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er of the ITO(TDS). At the outset, the ld AR of the assessee has submitted that this issue is covered in the case of Krishi Upaj Mandi Samiti, Dausa in ITA No. 18/JP/2013 decided on 10/4/2015. The ld AR referred paragraph No. 6 at page No. 6 of this order, which is reproduced as under:- 6. We have heard the rival contentions of both the parties and perused the material on record. It is found that there is no contractor-contractee relationship between the assessee and the RSAMB. The RSAMB is a pa .....

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ular No. 745 dated 19.07.1996, Circular No. 22/68-ITB dated March 28/May 13, 1968 are also squarely applicable in the case of the assessee. The Samiti is required to contribute as per Section 18A of the Rajasthan Agricultural Marketing Act, 1961, which is 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. He further argued that there is no relation a .....

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