Gujarat High Court
The Commissioner Of Income Tax(Tds) vs Essar ... on 30 November, 2015
Author: Akil Kureshi
Bench: Akil Kureshi, Mohinder Pal
O/TAXAP/878/2015 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
TAX APPEAL NO. 878 of 2015
TO
TAX APPEAL NO. 880 of 2015
==========================================================
THE COMMISSIONER OF INCOME TAX(TDS)....Appellant(s)
Versus
ESSAR PROJECTS(I)LTD.....Opponent(s)
==========================================================
Appearance:
MRS MAUNA M BHATT, ADVOCATE for the Appellant(s) No. 1
==========================================================
CORAM: HONOURABLE MR.JUSTICE AKIL KURESHI
and
HONOURABLE MR.JUSTICE MOHINDER PAL
Date : 30/11/2015
ORAL ORDER
(PER : HONOURABLE MR.JUSTICE AKIL KURESHI)
1. These appeals are filed by the Revenue and arise out of common background. We may notice facts emerging in Tax Appeal No.850/2015.
2. The Revenue is in appeal against the judgement of the Income Tax Appellate Tribunal dated 10.4.2015 raising the following question of law for our consideration :
"Whether the Appellate Tribunal has substantially erred in cancelling the order passed under section 201(1) r.w.s 201(1A) of th Act under the assessee had taken various kinds of vehicles thus attracting the provisions of Section 194I of the Act?"
3. Primarily issue is one of the rate at which the assessee was required to deduct the tax at source. According to the Page 1 of 3 HC-NIC Page 1 of 3 Created On Thu Dec 03 01:12:03 IST 2015 O/TAXAP/878/2015 ORDER department, the assessee was required to deduct as per section 194I of the Income Tax Act. It was higher than the rate prescribed under section 194C which the assessee had applied. According to the Revenue, the payments which were made for hiring of vehicles was covered under section 194I since the assessee had hired vehicles and machinery from various transporters and vendors and the payment was in the nature of rent. The Tribunal while upholding the decision of CIT(Appeals) rejected the Revenue's contention on two counts. Firstly, that the deduction was to be made as per section 194C of the Act and not section 194I of the Act and more importantly, that payee having already paid the full tax, by virtue of judgement in case of Hindustan Coca Cola Beverage (P) ltd. v. Commissioner of Income Tax reported in 293 ITR 226, no further tax can be demanded. The Tribunal had approved the decision of CIT(Appeals) before whom the assessee had pointed out that entire tax had already been paid by the payee and, therefore, decision in case of Hindustan Coca Cola Beverage (P) ltd. (supra). would apply. Mrs. Bhatt however, submitted that even in such a question, issue of interest would survive. It appears that such interest component even if arising, is not very large. We would examine this aspect in an appropriate case.
4. No contrary facts were brought before the Tribunal or before us. In that view of the matter, we do not find it necessary to entertain these tax appeals. However, main question of deducting the tax at source whether under section 194C or under section 194I is kept open. Tax appeals are dismissed.
(AKIL KURESHI, J.)
Page 2 of 3
HC-NIC Page 2 of 3 Created On Thu Dec 03 01:12:03 IST 2015
O/TAXAP/878/2015 ORDER
(MOHINDER PAL, J.)
raghu
Page 3 of 3
HC-NIC Page 3 of 3 Created On Thu Dec 03 01:12:03 IST 2015