TaxTMI 
TaxTMI 
TaxTMI 
2020 (7) TMI 68
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....n confirming the same ignoring the fact that income of the recipient Krishi Upaj Mandi Samiti is exempt under 10(26AAB) of the act. Therefore the assessee had bonafidely not deducted TDS on payment of rent and therefore assessee cannot be treated as assessee in default. Hence the said demand is illegal, against the facts of the case and bad in law hence needs to be deleted. 2. No Short deduction of TDS on payment to Co-owners and the payment made by assessee is not covered under section 1941:- That the Ld. AO erred in treating the share of money as rent liable to TDS and CITCA) also erred in conforming the same without appreciating the fact that there is agreement of "Joint partnership agreement scheme" between the assessee and recipient Sadhana Enterprises (co-owners). Therefore MP Warehousing & Logistics Corporation is not paying any rent to Sadhana Enterprises (co-owners), therefore section 1941 is not applicable, hence order itself is unlawful, against the facts of the case and bad in law hence needs to be deleted. 3. That the order under section 201(l)/201(1A) of the act is arbitrary, illegal, wrong, unlawful, bad in law and on the facts of the case & therefore dem....
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....- to Krishi Upaj Mandi Samiti, Dhamnod & Khandwa but no TDS has been deducted on the rent payments. In one other instance, the revenue authorities observed that the rent of Rs. 32,61,989/- was paid to M/s. Sadhana Enterprises and tax of Rs. 2.98.163/- was deducted as against Rs. 3,26,198/- which was to be deducted as TDS in the view of Revenue Authorities. 9. During the course of survey proceeding and the appellate proceeding, regarding non-deduction of tax on the rent paid to Krishi Upaj Mandi Samiti it was submitted that the assessee should not be treated as assessee in default since the payee i.e. Krishi Upaj Mandi Samiti is autonomous body and its income is exempt as per the provisions of section 10(26AAB) of the Act. Reference was made to the CBDT, vide Circular No. 4 of 2002 which was subsequently, modified by CBDT, circular No. 18/2017. Before the first appellate proceedings, the assessee also filed the certificate from Chartered Accountant in order to prove that the income of Krishi Upaj Mandi Samiti is exempt. 10. As regards, the short deduction of tax on rent paid to M/s. Sadhana Enterprises, it was submitted that a Joint partnership agreement was entered between the as....
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....ress provisions. Moreover, the eligibility of exemption is subject to various conditions which could be possible to determine at the time of assessments. 3.1 Hon'ble Supreme Court, in the case of Pan dian Chemical v. CIT 262 ITR 278 has clearly laid down that the rules of interpretation will come into play only if there is any doubt with regard to the express language used in the provision. Where the words are unequivocal, there is no scope for importing the rule of liberal interpretation of an incentive provision. Similarly, Hon'ble Apex Court in the case of CIT v. Budda Raja & Company 204 ITR 412 has held that liberal interpretation of provision should not do violence to plain language. The object of enactment should be gathered from a reasonable interpretation of language used therein. The similar view has been taken by Hon'ble Apex Court in the case of IPCA Laboratories v. DCIT 266 ITR 321 wherein it has been clearly brought out that if the wording of the provisions are clear, then the benefits, which are not available under the provision cannot be conferred by ignoring or misinterpreting the words in the provision. Therefore, in view of the above discussion, I am....
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....ment for tax deduction at source, since their income is anyway exempt under the Income-tax Act- (xiii) Agricultural Produce Marketing Committee referred to in clause(26AAB)" 13. A certificate of the Chartered Accountant under first proviso to section 201(1) of the Act dated 3rd June, 2016 states about the amount of rent paid by the assessee to the payee and certifies that the rental income received from the assessee has been accounted for in the financial statements and the taxable income of the 'payee' is nil. This fact proves that there was no liability to pay income tax on the payee as taxable income was nil. 14. Thus, in view of the CBDT, circular referred above and the certificate of Chartered Accountant dated 3-6-2016 we are of the considered view that the assessee should not have been treated as assessee in default for non-deduction of tax at source on the rent payment of Rs. 4,37,528/- to Krishi Upaj Mandi Samiti. 15. Our this view finds support by the decision of Co-ordinate Bench, Jaipur in the case of ITO, Ward TDS-2 v. Branch Manager, State Bank of Bikaner & Jaipur [2012] 19 taxmann.com 221(JP) wherein it was held that "there was no question of deducting TDS....