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Issues involved: The judgment deals with the question of whether payments made in the form of transmission/wheeling/SLDC charges are liable to be deducted at source u/s. 194J of the Act or if the provisions of section 194C are applicable.
Issue 1 - Applicability of Section 194J vs. Section 194C: The consolidated order dated 24.12.2009, addressed a bunch of three appeals by the Revenue against the decision of the ld. CIT(A), Udaipur. The primary issue was whether the payments made in the form of transmission, wheeling, and SLDC charges are subject to deduction at source u/s. 194J of the Act. The Revenue contended that non-deduction of tax on these payments amounted to a violation of section 194J. However, the assessee argued that the issue was covered in their favor by decisions of the Jaipur and Delhi Benches of the Tribunal. The Tribunal considered the agreements, technical nature of services, and relevant legal provisions, ultimately holding that the assessee was not liable for TDS on such payments. The decision was supported by various judicial pronouncements and no contrary decision was presented. Therefore, the stand taken by the ld. CIT(A) was affirmed. Issue 2 - Charging of Interest u/s. 201(1A) of the Act: The next ground of contention was the charging of interest u/s. 201(1A) for the alleged violation of section 194J. The Tribunal, in disposing of the section 194J issue in favor of the assessee, also concluded that no interest u/s. 201(1A) was leviable. This decision was based on considerations of judicial pronouncements such as Hindustan Coca Cola Beverages Pvt. Ltd. Vs. CIT and CBDT Circulars. The Tribunal found that the alleged violation of section 201(1A) was consequent to the alleged violation of section 194J, and since the assessee was not liable to deduct tax at source, no interest was chargeable. Consequently, the appeals of the Revenue were dismissed. Separate Judgement: No separate judgment was delivered by the judges in this case.
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