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2016 (8) TMI 107 - HC - Income TaxTDS u/s 194C or 194J - TDS on Port Charges - as per the AO the services provided by the C & F agents were in the nature of professional services - Held that - It is clear that C & F agents are nowhere remotely indicated in the explanation to Section 194J of the Act. In the decision rendered by the Delhi High Court in the case of Hindustan Lever Ltd. (2012 (12) TMI 846 - DELHI HIGH COURT), the Court has held that tax is deductible under Section 194C in relation to warehousing charges paid to clearing and forwarding agents. We find that the CIT(A) as well as Tribunal has not committed any error in deleting the deduction of tax at source by applying provisions of Section 194C instead of 194J of the Act. - Decided in favour of the assessee
Issues Involved:
Applicability of Section 194C vs. 194J for 'Port Charges' payments. Detailed Analysis: Issue 1: Applicability of Section 194C vs. 194J for 'Port Charges' payments Facts: The case involved a dispute regarding the correct section under which TDS should be deducted for payments made under the head 'Port Charges' to Clearing and Forwarding Agents. The Assessing Officer held that TDS should have been deducted under Section 194J for professional services, but it was done under Section 194C. Analysis: The CIT(A) and Tribunal both ruled in favor of the assessee, holding that C & F agents do not fall under the definition of 'professional services' as per Section 194J. The Tribunal cited a previous case where warehousing charges paid to C & F agents were treated under Section 194C. The definition of 'professional services' under Section 194J was examined, and it was concluded that C & F agents are not covered under this definition. Judgment: The High Court confirmed the decision of the Tribunal, upholding that the deduction of tax at source under Section 194C for 'Port Charges' payments to C & F agents was correct. The Court found no error in applying Section 194C instead of 194J. Consequently, the Tax Appeals filed by the revenue were dismissed, and no costs were awarded. This detailed analysis provides a comprehensive overview of the legal judgment, addressing the issues involved and the reasoning behind the decision.
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