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Hakmichand D & Sons Versus Dy. Commissioner of Income Tax, TDS Circle, Ahmedabad

2016 (11) TMI 1465 - ITAT AHMEDABAD

TDS u/s 194J - TDS liability of licence fees paid to IRCTC - Held that:- The issue in appeal is no longer res integra. A co-ordinate bench of this Tribunal, in assessee’s own case in respect of assessment under section 143(3) for the assessment years 2006-07 to 2011-12 has observed to hold that assessee’s licence fee payments to IRCTC were not liable for TDS and cannot be disallowed u/s. 40(a)(ia). Assessee by IRCTC dated 27.03.2014 and form no 26 has demonstrated that license fees paid by him f .....

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tain to the same assessee, involve a common issue and were heard together. As a matter of convenience, therefore, all these six appeals are being disposed of by this common order. 2. In substance, the short and common grievance, arising in all these appeals, is that the learned CIT(A) erred in upholding the tax withholding demands raised under section 201(1) r.w.s. 194J, and under section 201(1A) r.w.s. 194J, in respect of licence fees paid to Indian Railway Catering & Tourism Corporation Li .....

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pute about the fact that no taxes were deducted at source from these payments. On these facts, when a survey under section 133A was conducted for verifying compliance with tax deduction at source obligations, it was noted that there is a failure on the part of the assessee to deduct tax at source under section 194J. The Assessing Officer was of the view that the assessee ought to have deducted tax at source under section 194J, as licence fee payments were duly covered by the scope of that sectio .....

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s no longer res integra. A co-ordinate bench of this Tribunal, in assessee s own case in respect of assessment under section 143(3) for the assessment years 2006-07 to 2011-12, has, inter alia, observed as follows :- 8. We have heard the rival contentions and perused the material on record. In our considered view, on merits, the assessee deserves to succeed on these counts in view of the following:- a. The impugned license fee is paid by assessee to IRCTC for awarding licensed rights. Payments c .....

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assessees case. b. Similarly sec. 194C is also not applicable since the basis of allotment of catering rights on license fee involves peculiar features. The IRCTC is the contractor who awards rights and assessee is the contractee obliged to pay license fee for availing those rights. Sec. 194C fastens liability on contractor when amount is paid to contractee and not vice versa. Therefore payment of license fee by contractee to contractor can by no stretch of imagination be assumed to come under t .....

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ing any know how, patent , copy right , trade mark, license, franchise cannot fall under its purview. d. Apropos additional ground also respectfully Hon ble Supreme court judgments Som Prakash Rekhi has laid down parameters as to when a corporation can be called a state for legal and practical purposes. Income Tax law provides some beneficial and relaxing provisions for Govt. local bodies etc. for ease of administration and flexibility. TDS is a mechanism to avoid nonpayment of taxes by payees. .....

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