TaxTMI 
TaxTMI 
2014 (1) TMI 1446
X X X X Extracts X X X X
X X X X Extracts X X X X
....sessee to Rajsasthan State Agriculture Marketing Board for construction/repairs/maintenance of the market yards and missing link roads. 2. Whether on the facts and in the circumstances of the case, the Learned CIT(A) has erred in holding that there is no requirement of deduction of tax at source u/s 194J on payment made to local fund audit department of State Government whereas the payment were made to advocate/chartered accountants for professional services. 3. Whether on the facts and in the circumstances of the case, the Learned CIT(A) has erred in holding that interest u/s 201(1A) will become leviable only if the total tax deducted by the end of the year is less than the tax deductible on the taxable salary paid during the year. 4. W....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t payments to RSAMB, made towards the works listed, as contractual payment attracting provisions of section 194C. The A.O. did not find merit in the submissions of the assessee and demand u/s 201(1) & 201(1A) of the Act for assessment years 2006-07 to 2010-11 amounting to Rs. 48,57,072/- was created. 3. Being aggrieved, the assessee carried the matter to the ld. CIT(A) and submitted that under the Rajasthan Agricultural Produce Act, 1961, two entities were created viz. the Krishi Upaj Mandi Samiti[the assessee] and Rajasthan State Agricultural Marketing Board. It was further submitted that the assessee looked after the day to day administrative work, i.e. collection of market fee and supervision of auction of food grains whereas the Board ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tself functioned as a consultant only. Reliance was placed on the decision of the ITAT Lucknow Bench in the case of U.P. State Industrial Development Corporation Ltd. Vs ITO reported at 81 ITD 173. It was argued that on the one hand the A.O. tried to establish that the relation between the assessee and RSAMB was that of principal and agent and on the other hand that of a contractor and a sub-contractor, which was a contradictory stand. It was further argued that there being no contract between the assessee and the RSAMB, the payments made by the assessee to RSAMB were not liable for deduction of tax at source. The ld. CIT(A), after considering the submissions of the assessee observed that in order to attract the provisions of section 194C o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ould be enforced after the tax deductor has satisfied the officer in charge of TDS that taxes due have been paid by the deductee, however, this will not alter the liability to charge interest u/s 201(1A) of the Act till the date of payment of taxes by the deductee or the liability for penalty u/s 271C of the Act." It was contended that from the Circular it was clear that when the payee had deposited the due tax, the payer has no further liability for deduction of tax at source. Reliance was placed on the following case laws: a. ITO Vs. Alfred Advertising [8 SOT 312] [Delhi Trib.] b. Singapore Airlines Ltd. Vs. ITO [7 SOT 84 [Chennai Trib.] c. M.S. Chahal Vs. ITO [3 SOT 561] [Asr Trib.] d. CIT Vs. Adidas India Marketing (P) Ltd [157 Tax....