TMI Blog2013 (10) TMI 1398X X X X Extracts X X X X X X X X Extracts X X X X ..... unity to furnish necessary details before the AO. With regard to the rent payments also, the Ld A.R sought an opportunity. Since the matter relating to the commission payments requires fresh examination, in the interest of substantial justice, the assessee may be given one more opportunity to furnish the details of rent payments also. Accordingly, we set aside the orders passed by Ld CIT(A) in all the three years in respect of the above said two payments and restore them to the file of the assessing officer for making fresh examination. The assessee is also directed to furnish all the details that may be called for by the assessing officer, failing which the AO is free to take decision on the basis of available facts. - ITA No.278/Coch/20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In assessment years 2007-08 and 2008-09, the assessee had constructed building and the according to AO, the assessee did not deduct tax at source on the payments made to the contractor u/s 194C of the Act. Hence, the AO treated the assessee as assessee in default in all the three years in respect of his failure to deduct tax at source from the payments stated above. Accordingly, the AO raised demand u/s 201(1) of the Act and also charged interest u/s 201(1A) of the Act in all the three years. The assessee challenged the orders passed by the AO by filing appeals before Ld CIT(A), but could not succeed. Hence, the assessee has filed these appeals before us. 3. The Ld Counsel for the assessee submitted that the tax authorities have treate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... about 140 to 150 franchisees and the payments made to each of them would not warrant tax deduction at source. The Ld Counsel further submitted that the assessee has paid rent to one person on behalf of various co-owners and each co-owner s share is below the monetary limits prescribed u/s 194I of the Act. The AO has presumed that the assessee is constructing building by giving it on contract, where as the fact remains that the assessee himself is constructing the building. Hence the AO was not right in presuming that the assessee has failed to deduct tax at source u/s 194C of the Act in respect of construction expenses. He further submitted that the Finance Act, 2012 has inserted a proviso below sec. 40(a)(ia) of the Act, whereby the disal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 201(1) is not to be levied if the payee has paid the tax on the payments made by the assessee. He submitted that the assessee could also furnish the details of rent payments. 6. We have heard the rival contentions and perused the record. The admitted fact is that the assessee has accounted for the payments made to the franchisees as Commission payments . However, the assessee claims before us that the relationship between him and the franchisees is on Principal to principal basis. When it was asked whether there is any written agreement between the assessee and the franchisees, the Ld A.R could not clarify the said query. Even if there is no written agreement, it seems that the assessee and the franchisees work on some understand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e and the expenses are incurred on the instructions of the assessee, then in our view, the tax is required to be deducted at source on Commission amount alone. However, if the franchisee is entitled to commission plus expenses and he himself incurs expenses, then the tax is required to be deducted at source on the aggregate payments made. We notice the tax authorities have not examined these aspects and the assessee has also failed to furnish the relevant details to them. 8. In respect of rent payments, the contention of the assessee is that the payments attributable to each co-owner do not exceed the monetary limits prescribed u/s 194I of the Act. However, before us also, the assessee has failed to furnish relevant details. 9. With ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... our view, the Ld CIT(A) was not justified in confirming the demand raised u/s 201(1) and interest charged u/s 201(1A) of the Act in respect of building construction. Accordingly we set aside the order of Ld CIT(A) in respect of this issue and direct the AO to delete the demand raised thereon. 9.1. The Ld Counsel contended that the beneficial amendment made by Finance Act 2012 to sec. 40(a)(ia) of the Act should be extended to the provisions of sec. 201 also. However, in our view, the provisions of sec. 40(a)(ia) and sec. 201 operate in different field. Further the benefit extended by the proviso to sec. 40(a)(ia) of the Act is already available to the demand leviable u/s 201(1) of the Act in view of the decision of Hon ble Supreme Court ..... X X X X Extracts X X X X X X X X Extracts X X X X
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