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Bangalore Metro Rail Corporation Ltd. Versus The Deputy Commissioner of Income Tax, Circle-16 (1) , Bangalore

2016 (9) TMI 760 - ITAT BANGALORE

TDS liability -period of limitation - CIT(A) held that instead of fixing the liability of TDS on 21% to be charged by the KIADB from the assessee for various services, the liability should be restricted to 4% as per the revision order passed by the Government of Karnataka - Held that:- It is seen that the AO himself has passed order u/s 201(1A) only in respect of first four years i.e. assessment years 2006-07 and 2008-09 to 2010-11. Hence it is seen that for financial years ending on or before 3 .....

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for the AY: 2002-03 is barred by limitation as the period of limitation would be four years from the end of the financial year in question. Respectfully following this judgment, we hold that in the present case also, the orders passed after the end of the financial year in question is time barred and hence the same is quashed. Such time barred orders are four i.e AY: 2006-07, 2008-09, 2009-10 and 2010-11. Remaining three orders for AY: 2011-12 to 2013-14 are not time barred even as per this jud .....

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account of land acquisition only, it has to be held that such payment by the assessee to KIADB is a combined payment and it also included service charges and in that situation, whether the income is accounted for by the payee i.e. KIADB is not relevant because it is settled principle of law by now that book entry is not decisive and since even now, 4% service charges is payable and payment was made by the assessee company to KIADB for an amount in an excess of that 4 %, the assessee was required .....

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T(A) in any of the years out of his order for three years being AY: 2011-12 to 2013- 14 - ITA Nos.868 to 874(Bang) 2015 - Dated:- 5-8-2016 - SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K.GARODIA, ACCOUNANT MEMBER For The Assessee : Shri Shreehari Kutsa, CA For The Revenue : Smt. P. Renugadevi, JCIT ORDER PER BENCH All these appeals are filed by the assessee for the assessment years 2006-07 to 2013-14. Since common issues are involved in all these appeals, all these appeals were heard toge .....

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Crores to M/s KIADB during the span of seven years for which the appeals are being decided by us. Subsequently, the rate of service charges was revised to 4% vide copy of order dated 21-06-2012 and a High Powered Committee constituted by the Government of Karnataka held that 4% rate of service charges is on higher side and that the Finance Department should work out modalities for meeting the administrative expenses of KIADB towards land acquisition for the assessee. Under these facts, the AO pa .....

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KIADB dated 20-06-2005 is available on page No.1 to 8 of the paper book and in particular, our attention was drawn to clause-1(ii) of the agreement available on page-2 of the paper book, as per which the assessee company was required to pay establishment charges at 10%, audit charges at 1% and Board s service charges at 10% over the tentative cost of land. He also submitted that the order passed by Karnataka Government on 21-06-2012 revising the rate to 4% being the service charge, administrati .....

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r Pvt.Ltd 89 ITR 266(SC) iv) CIT Vs WExcel Industries Ltd., 358 ITR 295(SC) v) State Bank of Travancore Vs CIT 158 ITR 102(SC) vi) Morvi Industries Ltd., Vs CIT 82 ITR 835 (SC) vii) Godhara Electricity Co.Ltd.,CIT 225 ITR 746 (SC) viii) M/s P.G & W.Sawoo Pv.Ltd., Vs ACIT in Civil appeal No.4091 of 2016 arising out of SLP (Civil) Nos.6384 of 2009 dated 19/04/2016. Reliance on these judgments was placed in support of this contention that the income tax is a tax on income and income has to be r .....

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ed by the ld. AR of the assessee that such break-up is not readily available. Thereafter, he submitted that in fact, no part of this amount was considered as income by KIADB and therefore, there is no requirement of deducting TDS on any part of this amount. He also drawn our attention to para-15 of the written submission, wherein it has been submitted by the ld. AR of the assessee that as per the judgment of the Hon ble jurisdictional High Court rendered in the case of CIT Vs Bharat Hotels Limit .....

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is, ld. DR of the revenue supported the order of the ld. CIT(A). 6. We have considered rival submissions. First of all, we reproduce the finding of the ld.CIT(A) which are contained in para-4.3 and 5 of his order.. 4.3 From the cited judicial decisions, it is evident that interest u/s 201(1A) is to be levied if an assessee does not deduct the whole or part of tax. In the instant case, since the appellant did not deduct any tax from payments made to KIADB for services rendered by it to the appell .....

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Govt. Order dated 21-06-2012 whereby a rate of 4% was agreed upon vide Govt. Order dated 21-06-2012, the AO is directed to adopt 4% as rate paid/payable to KIADB by the appellant . 7. From the above paras of the order of the ld. CIT(A), it comes out that the ld. CIT(A) held that instead of fixing the liability of TDS on 21% to be charged by the KIADB from the assessee for various services, the liability should be restricted to 4% as per the revision order passed by the Government of Karnataka o .....

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e end of the relevant assessment years. In the judgment of the Hon ble jurisdictional High Court rendered in the case of CIT Vs Bharat Hotels Limited (Supra), it was held that the order passed u/s 201(1) and 201(1A) of the Act on 28.01.2008 for the AY: 2002-03 is barred by limitation as the period of limitation would be four years from the end of the financial year in question. Respectfully following this judgment, we hold that in the present case also, the orders passed after the end of the fin .....

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