TaxTMI 
TaxTMI 
2022 (1) TMI 179
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....sessing Officer is bad in law and facts. 2. On the facts and in the circumstances of the case and in law, the learned Assessing Officer has erred in levying penalty under Section 271 (1)(c) of the Act without appreciating the view of the Appellant that the said payments are not liable to TDS under Section 194C/ 195 of the Act and the learned CIT(A) has erred in confirming the same. 3. On the facts and in the circumstances of the case and in law, the learned Assessing Officer has erred in levying penalty under Section 271 (1 )(c) of the Act without appreciating the view of the Appellant that reimbursement of expenses is not hit by the Section 40(ba) of the Act and the learned CIT(A) has erred in confirming the same. ....
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....one appeared on behalf of the assessee. It is seen that neither the assessee nor his counsel appeared on various dates. The notice of hearing was sent to the assessee and was returned by the postal authority with remark "Addressee is left". 3. Under these facts, the appeal was taken up for hearing in the absence of the assessee and being decided on the basis of the material placed before us. 4. The facts giving rise to the present appeal are that the case of the assessee was reopened and the assessment u/s 143(3) read with Section 147 of the Income Tax Act, 1961 ("the Act") was framed vide order dated 5/2/2015. Thereby, the Assessing Officer made addition of Rs. 1,26,71,190/- on account of disallowance of guarantee commission. The Ass....
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....ractual arrangement to provide bank guarantees in the joint venture ("JV") agreement. A copy of the JV agreement is enclosed in page number 1 to 6 of paper book. 1.1.2. In this regard, we wish to submit that, any payment to be liable under Section 194C of the Act, the contract entered into by the parties should be in the nature of 'works contracts' i.e. 'labour contracts' which is not the case in the present scenario. The fact that the contract stipulates that the members were obliged to provide guarantees for the performance of the contract does not amount to 'works contract'. The liability under Section 194C of the Act is cast on the assessee only when they are in fact and in substance acting in the relati....
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....m for a consideration which is shared. Parties do not work for each other." 1.1.5. We would like to draw your attention to the Hyderabad ITAT ruling in the case of Hindustan Ratna [ITA No. 372/HYD/2013] (a copy of the said ruling is enclosed in page number 43 to 54 of paper book), wherein the Honourable ITAT had held that the provisions of Section 194C of the Act cannot be attracted on the payments made by the JV to their partners, as the partners of a JV are not sub-contractors of the JV. 1.2. Bank guarantee commission paid to M/s PATI Sendirian Berhad: 1.2.1. The learned AO had concluded that TDS is applicable on the bank guarantee commission paid to PATI Sendirian Berhad under Section 195 of the Act as PATI Sen....