TaxTMI 
TaxTMI 
2015 (6) TMI 236
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....hermal Power Generating Station in Chhattisgarh. ITA No.1261 of 2014 Lanco Amarkantak Power Pvt Ltd Hyderabad The AO found that an amount of Rs. 1,23,51,998 is transferred to capital work-in-progress and is representing payment of service charges to Chhattisgarh State Industrial Development Corporation Ltd. According to the AO, the said payment should have been subjected to deduction of tax at source u/s 194J of the Act. AO after considering the explanation of the assessee held that the nature of the payment is Professional fee u/s 194J of the Act, the assessee ought to have deducted TDS u/s 194J of the Act and since the assessee has not deducted TDS, the company was treated as assessee in default and held that out of Rs. 1,21,51,998, an am....
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....cal power generation and distribution unit. The ground rent is fixed at Rs. 13,00,732/- for first 30 years; All the agreements are similarly worded. The appellant submitted before the Assessing Officer that the amount is shown separately by the CSIDC as payable to the State government. It can be seen from the final accounts drawn on 31-03-2005 that the amount of lease rents are taken as the revenue receipt and is credited to State government account. Therefore, it is clear that the said lease rentals paid do not relate to the CSIDC but relates to the state government of Chhatisgarh. The said CSIDC collected the amounts as a Trustee for the government. Therefore, the appellant submitted that the provisions of Sec. 194-1 have no application. ....
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....said payment is called the service charges. The assessee humbly submits that even the service charges are paid to the government. Further, the amount was not paid for any services rendered to the assessee. It may kindly be seen that the service charges are worked at 10% of the cost of land acquired from private parties. No services charges are paid with regard to the land allotted by the government to the assessee. The. appellant submits that the service charges are not for rendering any services to the assessee and are paid to government through CSIDC towards expenditure incurred by government in acquiring and developing the land. Therefore, there is no requirement for deduction of tax at source against service charges. In so far as leas....
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....sessee was for the acquisition of the private land/govt. Land. Since the CSIDC was facilitating the acquisition of the private land/govt. Land from the state govt, the services are akin to the technical consultancy and the same shall fall under Explanation of 194J of the Act. The AO stated that they were not charges of the nature of reimbursement. Further, CSIDC was independent entity as from that of Govt. Of Chhattisgarh. On the contention of the assessee that the above ITA No.1261 of 2014 Lanco Amarkantak Power Pvt Ltd Hyderabad services charges were shown separately under capital account, the AO opined that that would not in any way mitigate the liability of TDS on account of deductor as the deductee i.e. SCIDC had not offered the above ....
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....velopment Corporation Ltd is assessed to tax and filed its return of income for the ay 2006-07. Therefore, the order u/s 201(1) is not justified and interest should be limited to the date of filing of return of income by the Chhattisgarh State Industrial Development Corporation Ltd. 7. The ld CIT (A) held that he had verified the record and found that the amounts were paid towards acquisition of land which is not governed by the provisions of sec 194J of the Act. The CIT (A) also found that Chhattisgarh State Industrial Development Corporation Ltd is the representative on behalf of the Govt. Of Chhattisgarh and therefore, the provisions of sec 194J are not applicable. The CIT (A) agreed with the contentions of the assessee and cancelled th....
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....mmary of the ITA No.1261 of 2014 Lanco Amarkantak Power Pvt Ltd Hyderabad state government' which forms part of the final accounts of CSIDC as on 31.03.2005 it is seen that it is a statement showing receipts on behalf of the state govt. from entrepreneurs wherein the lease rentals also finds place. It is also a fact that in course of the appeal proceedings before the CIT (A) a remand report was called for from the AO. On perusal of the remand report by the AO, a copy of which is at page 60 of the paper book, we find no mention about to whom the lease rentals were paid. It only deals with payment of service charges. Even so far as payment of service charges are concerned, it is the contention of the ld AR that it has been paid to the Distric....