TaxTMI 
TaxTMI 
2016 (8) TMI 472
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....as assessee in default u/s 201(1) for the alleged failure to deduct tax at source on payment made to RIICO and thereby confirming the action of charging interest of Rs. 23,70,599/- u/s 201(1A) of the IT Act, 1961. The Action of the ld. CIT (A) is illegal, unjustified, arbitrary and against the facts of the case. Relief may please be granted by quashing the demand of Rs. 23,70,599/- allegedly raised. 2. In the facts and circumstances of the case and in law, the ld. CIT(A) has erred in confirming the action of the ld. AO in treating the assessee as assessee in default u/s 201(1) for the alleged default in deduction of tax at source amounting to Rs. 86,500 in respect of payment to Rajasthan Technical University, Kota and charging interest o....
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....er interest comprising bundle of rights was acquired and , therefore, it was not rent and was not liable for TDS U/s 194-I. The ld. AO did not agree with the contentions of the assessee Society. He mainly referred to the different regulatory clauses of the lease deed and held that there was no sale of land from RIICO to assessee society. It was only a lease. The ld. AO also referred to the definition of rent provided in Section 194-I and held that the definition of rent provided in section 194-I is wide enough to include the lease. In the result the ld. AO treated the assessee society as assessee in default for deduction of tax at source on payment made to RIICO. The ld. CIT(A) upheld the order of the ld. AO for the following reasons:- (....
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....supra) is taken to be against the assessee on the issue under consideration , we are bound to follow the view which is in favour of the assessee as per the ratio laid down in CIT vs Vegetable products 88 ITR 192 (SC). Besides the above lease document has used the "Development charges" and "Economic rent" to be payable by the assessee. As the document has used two different phrases to connote different obligation therefore in our view development charges can'not be read as rent within the purview of the section 194 I. further lease document has provided the consequences of non-payment of the development charges by the assessee, if the assessee failed to pay the development charges, as mentioned in the agreement, the possession was lia....
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....and therefore the income of RTU is exempt u/s 10(23C)(iiiab). The appellant has also filed copy of computation of total income and acknowledgement of Income Tax Return for A.Y. 2008-09 wherein income is shown as exempt u/s 10(23C)(iiiab). The appellant also filed a copy of report of the office of AG in which at page no.30 at para 9, it is mentioned that RTU is exempt u/s 10(23C)(iiiab). 2.4 The ld CIT(A) has given his findings as under: "First of all the issue as to whether on the payments made to RTU, TDS was to be deducted or not is to be decided. It may be noted that the appellant society is a University and for academic reasons affiliated to RTU. Therefore the payment made to RTU is basically of some contractual nature in as much ....
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....ioned that their findings may not be a valid basis for treating the income of M/s RTU to be exempt u/s 10(23C)(iiiab) of the Act. The important point to be noted is that the payment was made during A.Y. 2012-13 and the document to be relied upon for claim of exempted income of M/s RTU should also be pertaining to that period only. Therefore prima facie when the payment was made to M/s RTU, the appellant was required to deduct tax and as the appellant failed to deduct tax on such payment therefore such demand amounting to Rs., 97055/- as rightly raised. The ground of appeal in respect of raising of such demand on account of non-deduction of tax is accordingly dismissed." 2.5 During the course of hearing, the ld AR reiterated its submissio....