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2016 (7) TMI 1261 - AT - Income TaxTDS u/s 192 - credit tips recovered from the hotel guest - Held that - This issue in my opinion is no more res-integra in view of the decision in the case ITC Ltd. vs. CIT(TDS) 2016 (4) TMI 1055 - SUPREME COURT as held that contract of employment not being proximate cause for receipt of tips by employee from a customer, same would be outside dragnet of section 15 and 17 u/s 201(1A), interest can only be levied when the person if declared as an assessee in default. The assessee s liability in the present case are outside section 192. Therefore it can not hold assessee to be in default. Thus quash the order of the AO passed u/s 201(1)/u/s 201(1A). - Decided in favour of assessee
Issues Involved:
Whether the assessee was liable to deduct TDS under section 192 on credit tips recovered from hotel guests. Analysis: Issue 1: Liability to deduct TDS under section 192 on credit tips The appeal was filed by the assessee against the order of the Ld. CIT(A) dated 11.11.2014, focusing on the issue of whether the assessee was liable to deduct TDS under section 192 on credit tips recovered from hotel guests. The Tribunal considered the arguments presented and reviewed the orders of the authorities below. The Tribunal referred to the decision of the Hon'ble Supreme Court in the case of ITC Ltd. vs. CIT(TDS) 68 Taxman.Com 323 (SC), where it was held that the contract of employment not being the proximate cause for the receipt of tips by an employee from a customer, falls outside the scope of sections 15 and 17 u/s 201(1A). It was emphasized that interest can only be levied when the person is declared as an assessee in default. Consequently, the Tribunal concluded that the assessee's liability in the present case was outside the purview of section 192, thereby not holding the assessee in default. Citing the decision of the Hon'ble Supreme Court, the Tribunal quashed the order of the AO passed u/s 201(1)/u/s 201(1A). As a result, the appeal filed by the assessee was allowed, providing a favorable outcome for the assessee in this matter. This detailed analysis of the judgment highlights the key legal points and the reasoning behind the Tribunal's decision regarding the liability of the assessee to deduct TDS under section 192 on credit tips recovered from hotel guests.
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