TaxTMI 
TaxTMI 
TaxTMI 
2022 (9) TMI 408
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....mstances of the case and in law in holding that the settlement amount paid by the Appellant to Mr. Milan Saini and Mr. Deepak Marda (hereinafter referred to as the 'Payees') was in the nature of salary liable to TDS at the time of payment. 2. The Hon'ble CIT(A) has grossly erred in the facts and circumstances of the case and in law in ignoring the following: (i) the amount was received by the Payees as per Settlement Agreement for relinquishment of right of equity in the appellant company; (ii) the relinquishment of right is a transfer as per Section 2(47) of the Act and not liable to TDS as the Payees were resident in India during FY 2013-14; (iii) There was no formal, binding and legally enforceable signed agreement between the Pa....
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....ught to his notice by the appellant during appeal proceedings for FY 2012-13. " 3. Brief facts of the case are that, a TDS Survey was conducted at the premises of the assessee, proceedings u/s 201(1)/201(1A) of the Act for Assessment Year 2011-12, 2012-13 & 2013-14 were initiated against the assessee. Based on the documents and details furnished by the assessee, an order has been passed on 31/03/2015 by raising demand of Rs.11,02,78,412/- u/s 201 and remand of Rs. 3,97,00,228/- u/s 201 (1A) of the Act, in total demand of Rs. 14,99,78,649/-. 4. Aggrieved by the order dated 31/03/2015, the assessee has preferred an Appeal before CIT(A). the Ld. CIT(A) has partly allowed the Appeal, found that the amount paid by the assessee to Mr. Milan Sai....
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.... in the nature of salary liable to TDS at the time of payment. 8. We have heard the parties, perused the material on record and gave our thoughtful consideration. The contention for the Ld. Counsel for the assessee is that there is a settlement agreement between the assessee and the payees wherein it has been agreed that while making the payment, the assessee need not deduct the TDS, therefore the Assessee is not liable to pay the TDS. The said contention of the assessee cannot be agreed. The agreement entered into between two parties will not override the provision of the Income Tax Act and the contract contrary to law is quite contract. Therefore, the contention of the Ld. Counsel that 'since it is agreed between the parties payment shou....
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.... cannot be invoked. This plea of the assessee is devoid of merit. 10. The Hon'ble Supreme Court in the case of Shri Choudhary Transport Company. Vs.ITO [2020] 426 ITR 289(SC) while dealing with the terms "paid" and "Payable" with reference to Section 40a(ia) wherein the Hon'ble Supreme Court has held that " the terms "payable" has been used in Section 40(a) (ia) of the Act only to indicate the type or nature of the payments by the assessee to the payees referred therein. It is descriptive of the payments which attract the liability for deducting tax at source and has not been used in the provision in question to specify any particular class of default on the basis of whether or not payment has been made. The semantical suggestion t....
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....es or before us to follow the ratio laid down in the case of Hindustan Coca Cola Beverage (supra). 13. Thus, in our opinion, the settlement amount paid by the assessee to Sh. Milan Sahni and Sh. Deepak Marda liable to deduct the TDS at the time of payment. The assessee vide written submission dated 12/02/2018 submitted before the CIT(A) that during FY 2012-13, the amount of Rs. 23,37,93,845/- was not actual paid by the assessee but only provision was made in the books of accounts. The assessee further contended before the CIT(A) that as there was no actual payment during the FY 2012-13, therefore, the CIT(A) held that the assessee was not liable to deduct TDS on the said amount during the year under consideration. Further, the Ld. CIT(A) g....