TaxTMI 
TaxTMI 
2016 (7) TMI 519
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....ts of the case is that the assessee, National Highway Authority of India (NHAI) is an autonomous body created under the NHAI Act, 1988 under the Ministry of Shipping, Road Transport and Highways to carry out the development and maintenance of Highways across the country. The NHAI, under the aegis of Central Government, develops National Highways on its own or Public Private Partnership and collects user fee from the users of National Highways. As such, the assessee established three Toll Plazas at Singarayakonda for collection of user fee and engaged the services of five agencies for collection of Toll fees. 3. A survey operation under sec. 133A of the Income Tax Act, 1961 was conducted in the business premises of the assessee on 24.03.2....
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....charge on total salary paid to personal. It was further submitted that commission is carved out from the value of transaction, whereas in its case the consideration is paid in terms of salary/wages plus some percentage of service charge on the total salary paid to personnel, therefore it cannot be considered as commission within the meaning of sec. 194H of the Income Tax Act, 1961. 4. The A.O. after considering the explanation of the assessee held that the services provided by the agencies is in the nature of principle and agent relationship, consequently, any payments made in pursuance of the said contract is of agency partakes the nature of commission within the meaning of section 194H of the Act, and accordingly, tax is deductible und....
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....he provisions of sec. 194H of the Act. It was further submitted that it has engaged the services of agencies to provide manpower for Toll fee collection in designated Toll Plazas of national Highways. As per the terms of agreement, the agencies required to provide as many as required number of persons on their own terms and conditions without any obligation to the NHAI. It is the responsibility of the agencies to appoint their staff and complete the work. The agencies have been paid consideration on the basis of total wages/salary payable to the personnel employed plus 14% service charges on the total salary payable to the staff. Therefore, it is mere supply of labour for execution of work contract, but not a contract for agency so as to ap....
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....he work. It is the responsibility of the agencies to appoint their staff and complete the work. The agencies have been paid consideration on the basis of total wages/salary payable to the personnel employed plus 14% service charges on the total salary payable to the staff. The assessee has made the payments and deducted the tax at source @ 2.266% under the provisions of sec. 194C of the Act. The A.O. was of the opinion that the contract between NHAI and the Agencies is a contract of agency and the agents are appointed as agents on behalf of NHAI to collect toll fee and hence, any payment made in pursuance of the said contract of agency partakes the nature of commission within the meaning of section 194H of the Income Tax Act, 1961. Accordin....
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....een the NHAI and the contractors. On perusal of the agreement, we find that the collecting entity is having power under its business rules to provide services on contract basis through its personnel. The Collecting agency is liable to provide its services of Toll fees collection work under its own organizational structure and on deployment of personnel as per clause 11 of the agreement without binding on the NHAI for the said employees under clause 12 of the agreement. As per clause 17 of the agreement, a service charge of 14% shall be paid on total remuneration payable to the personnel deployed for the work. Normally, commission is paid in terms of value of transaction, whereas in the instant case consideration is paid in terms of remunera....