2015 (5) TMI 111

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....tside the State of Gujarat after re-gasify it to Natural gas. In this case, a survey was carried out on 13.03.2008 at the business premises of the Assessee for verification of the compliance of various TDS provisions. During the course of survey it was noticed that Assessee had paid Rs. 6.59 crores as transportation charges to Gujarat State Petronet Ltd. (GSPL) and had deducted tax u/s 194C of the Act. On perusing the agreement entered by the Assessee with GSPL, A.O noticed that Assessee had entered into agreement for hiring of Gas Pipeline and had made payment for utilization of such pipeline equipments, the hiring of pipeline was on a regular basis, A.O was therefore of the view that the payments made for hiring of pipelines was covered u....

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....nder section 1941, tax is to be deducted from rent paid, by whatever name called, for hire of property. As against this, the definition of work given in Section 194C includes carriage of goods by any mode of transport other than by railways. According to above definition, transportation of goods, in my view would be considered as a works contract and accordingly, would subject to IDS under section 194C of the Act. Moreover, the appellant correctly pointed out that each section under Chapter XVII deals with a particular kind of payment to the exclusion of all other sections in the Chapter. Accordingly, when a payment is taxable under a particular section, it cannot be taxable under another section. Therefore when the appellant has correctly ....

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.... pipeline was used only for transmission of gas and did not give any inclusive right or interest to the Assessee. We further find that Circular No. 9/2012 dated 17.10.2012 issued by CBDT in the context of deduction of tax at source on payment of Gas Transportation Charges has clarified as under:-              4. It is clarified that in case the Owner/Seller of the gas sells as well as transports the gas to the purchaser till the point of delivery, where the ownership of gas to the purchaser is simultaneously transferred, the manner raising the sale bill (Whether the transportation charges are embedded in the cost of gas or shown separately) does not alter the basic nature of suc....

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....941-Held, from Circular No. 9/2012 issued by CBDT it was clear that whenever gas is transported by seller to point of delivery, transportation charges of gas would be embedded in cost of gas, though transportation charges are claimed separately or along with cost of gas in sale bill and nature of such contract essentially remains a contract for sale and not a works contract-But wherever transportation of gas is made by third person apart from seller of gas, transportation charges paid by buyer to transporter shall be governed by provisions of section 194C-TDS shall be deductible on such payment to third party by buyer at applicable rates-Assessee had admitted that it had also purchased gas from other sellers apart from GAIL but same was tra....