2012 (12) TMI 846

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....nsumer goods such as detergent, soaps etc. It hires godowns on rent and also engages c & f agents to manage them for various purposes. The assessing officer, for the financial year 2000-01 was of the view, after examination of form No.26G and 26J, that the assessee wrongly deducted tax at 2.2% under Section 194C from the amounts paid to the c & f agents. The assessing officer was of the opinion that the assessee ought to have deducted tax at the rate of 22% under Section 194-I because they contain warehousing charges.  Therefore, he treated the assessee in default of Rs.78,43,252/- and charged interest of Rs.25,29,448/- under Section 201(1A) and made consequential demands. Later he also initiated penalty proceedings under Section 271C....

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.... All warehousing charges have wrongly been treated under section 194-I of the Act, even though, different heads of payment made to the C & F Agents by the assessee company clearly show that was no payment towards rent, which could be covered under section 194-I of the Act. It has further been stated by the ld. counsel of assessee, that all of the payments have been effected to C & F Agent in pursuance of a contract with him, which is being covered U/s 194C of the Act, the payments made to him can't be further divided under various heads and apply the relevant rates (i.e. U/s 192 and 194J of the Act) as per law. The sample copy of the C & F Agreement has also been placed on records to support this argument by the assessee. The respective C....

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....al placed before us. A finding of fact has been recorded by ld. CIT(A) that entire detail of payment shows that there was no payment towards rent which could be covered by sec. 194I of the Act and in respect of premises used by the C & F Agents which were taken on rent by the assessee. TDS on rent was also deducted u/s 194I of the Act. The findings of fact recorded by CIT(A) have not been controverted by the revenue. Therefore, we are of the opinion that no case has been made out by the revenue to show that the nature of payments on which the tax was deducted by the assessee represent "rent" on which the tax was deductible u/s 194I of the Act. In absence of any such material, we decline to interfere in the finding of facts recorded by ld. C....