TMI Blog2020 (7) TMI 68X X X X Extracts X X X X X X X X Extracts X X X X ..... vide No. 04 of 2002 on 16-7-2003 and the certificate of Chartered Accountant dated 3-6-2016 we are of the considered view that the assessee should not have been treated as assessee in default for non-deduction of tax at source on the rent payment to Krishi Upaj Mandi Samit - In view of the CBDT Circular No. 4 of 2002 dated 16-7-2013 and circular No. 18/2017 on 29-5-2017, are of the considered view that the assessee should not treated as assessee in default for non-deducting tax on rent paid to Krishi Upaj Mandi Samiti. - Decided in favour of assessee. Short deduction of TDS on rent paid u/s 201(1) - payment to Co-owners - AO in treating the share of money as rent liable to TDS - applicability of the provisions of section 194I of the Act - HELD THAT:- We find that the assessee had duly deducted the tax at source on the rent paid to the co-owners where the amount of rent exceeded the limit of ₹ 1,80,000/- and in two cases where the amount was below the limit of ₹ 1,80,000/- tax was not deducted - assessee should not be treated as assessee in default for short deduction of tax on rent payment to M/s. Sadhana Enterprises since the assessee has rightly deducted, collec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplicable, hence order itself is unlawful, against the facts of the case and bad in law hence needs to be deleted. 3. That the order under section 201(l)/201(1A) of the act is arbitrary, illegal, wrong, unlawful, bad in law and on the facts of the case therefore demand of ₹ 1,37,110/- needs to be deleted. 4. That the appellant craves leave to add, amend or withdraw any of the grounds of appeal before or at the time of appeal. 3. Brief facts of the case as culled out from the records are that the assessee is a State Government undertaking and engaged in the work of storage and maintenance of warehouse for food grains procured by Food Corporation of India and other local agencies. For the Financial Year 2010-11 relevant to Assessment Year 2011-12, the assessee had been treated as assessee in default, for non deduction of TDS on rent paid to Krishi Upaj Mandi Samiti, Dhamnod Khandwa and for Short deduction of TDS on rent paid to M/s Sadhna Enterprises, under section 201(1) and also leving interest under section 201(1a) of the Act. Aggrieved assessee preferred appeal before Ld. CIT(A) but could not succeed. 4. Now the assessee is in appeal before the Tribunal. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eedings, the assessee also filed the certificate from Chartered Accountant in order to prove that the income of Krishi Upaj Mandi Samiti is exempt. 10. As regards, the short deduction of tax on rent paid to M/s. Sadhana Enterprises, it was submitted that a Joint partnership agreement was entered between the assessee and co-owners of the warehouse, who jointly agreed to provide the immovable property hold in joint name on rent, under a common name, M/s. Sadhana Enterprises. The rent was not paid specifically to Sadhana Enterprises but was paid to each of the co-owners and the TDS liability was calculated for each of the co-owners separately and tax deducted at source on the payment to particular owner which was filing within the ambit of provisions of section 194I of the Act. However, Ld. CIT(A) did not find any merit in the contentions and confirmations and confirmed the view of the assessing officer observing as follows: 3. Ground Nos. 1 to 6.: All these grounds of appeal have been raised against non deduction of TDS on rent paid to Krishi Upaj Mandi and M/s Sadhna Enterprises. The amount pertaining to Krishi Upaj Mandi including interest under section 201(1A) of the Income- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of IPCA Laboratories v. DCIT 266 ITR 321 wherein it has been clearly brought out that if the wording of the provisions are clear, then the benefits, which are not available under the provision cannot be conferred by ignoring or misinterpreting the words in the provision. Therefore, in view of the above discussion, I am very clear in my mind that the wording of the Act is very clear which requires no interpretation in the favor of assessee. 3.2 Further, reliance is placed on the decision of Hon'ble ITAT, Chandigarh Bench in the case of M/s Ambuja Cement Ltd. ITA Nos. 648 649/Chd./2014 dated 4-2-2016. In this case the payment was made by M/s Ambuja Cement to HRTC (Himachal Road Transport Corporation) which claimed exemption under section 11 13 of the Income-tax Act, 1961. The Hon'ble ITAT, confirmed the view of the CIT(A) that in the absence of any exception provided on exempt income of payee, the deductor cannot omit to d~ taxes at Source as provided in various TDS provisions. Similarly, there is no provision regarding non deduction of taxes in case of co-owners of parties in Joint Partnership Agreement Scheme. The TDS has to deducted keeping in view the partnersh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax at source on the rent payment of ₹ 4,37,528/- to Krishi Upaj Mandi Samiti. 15. Our this view finds support by the decision of Co-ordinate Bench, Jaipur in the case of ITO, Ward TDS-2 v. Branch Manager, State Bank of Bikaner Jaipur [2012] 19 taxmann.com 221(JP) wherein it was held that there was no question of deducting TDS by the assessee under section 194A of the Act on the interest paid to Rajasthan Rural Road Development Agency (RRRDA) which is a society registered under Societies Act, 1958 and was wholly financed by the Stated Government. Similar view was also taken by the Coordinate Bench Jaipur in the case of ITO (TDS) v. The Secretary, Krishi Upaj Mandi Samiti (ITA No. 342, 343 344/JP/2013) on 20-7-2015 wherein it was held that there is no loss to the revenue as the deductee (RSAMB) was not liable to pay tax ( the income being loss and RSAMB being registered under section 12A). In view of the above, it is held that assessee cannot be treated as an assessee in default. The Assessing Officer is directed to delete the demand raised under section 201(1) 201(1A) of the Act. 16. Respectfully, following the above decisions and in view of the CBDT Circular ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3,26,198/- 32,620/- 32,618/- R.M. Gupta 10 3,26,198/- 32,620/- 32,618/- HC Agrawal HUF 10 3,26,1991- 32,620/- 32,618/- SC AryaHUF 6 1,95,721/- 1,95,72/- 19,573/- Harish Agrawal 5 1,63,100/- Below Limit 2,2941- V.M. Gupta 5 1,63,100/- Below Limit 2,2941- 32,61,989/- 2,93,579/-- 2,98,163/- 19. From perusal of the above details which stands un-rebutted, we find that the assessee had duly deducted the tax at source on the rent paid to the co-owners where the amount of rent exceeded the limit of ₹ 1,80,000/- and in two cases where the amount was below the limit of ₹ 1,80,000/- tax was not deducted. On the basis of the above deta ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
