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TMI Blog2015 (3) TMI 217X X X X Extracts X X X X X X X X Extracts X X X X ..... it would lead to double levy of interest qua the same income. Similarly, the hon'ble Delhi High Court Jacabs Civil Mitsubishi Corpn. case (2010 (8) TMI 37 - DELHI HIGH COURT) observes that in case of a payer-payee relationship, the payee concerned is not absolved from the tax liability in case of shortfall in TDS deduction. However, in such a case, interest liability u/s 234B cannot be fastened to the payee. Similar principle stands echoed by the full bench of hon'ble Uttarakhand High Court Maersk Co. Ltd. (2011 (4) TMI 886 - Uttarkhand High Court). Thus, the net conclusion which flows from the aforesaid case law is that a payee/deductee whose payments have already been subjected to TDS provisions cannot be held liable to pay conseq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arrow compass. This is second round of litigation being the issue of interest u/s 234B of the Act. The assessee; a 'Dutch' entity, is engaged in the business of dredging, reclamation, port related and marine services. It has also set up an Indian subsidiary by the name of M/s Van Oord ACZ India (P) Ltd. The assessee had been awarded a dredging contract at Mundra Port by M/s Gujarat Adani Ltd. Vide agreement dated 18.7.2001, it preferred to further assign the same to its subsidiary entity. There is no quarrel between the parties that the assessee had acted as an interface between the subsidiary and other service providers. It had also let the associate entity to avail logistic and technical know-how facility. In relevant previous yea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rious judicial pronouncements. In this manner, the quantum proceedings attained finality upto the 'tribunal'. 7. Coming to the consequential proceedings, we find that the Assessing Officer held on 31.3.2013 the assessee to be liable to pay the impugned interest of ₹ 45,93,808/- u/s 234B of the Act. 8. In assessee's appeal, the CIT(A) has chosen to lift corporate veil after taking into consideration the assessee's status as a 'holding' company with the subsidiary company(supra) to observe that there stands very much the assessee . Further observation accuse the assessee of trying to frustrate the lawful exercise taken by the Assessing Officer for charging the impugned interest. The CIT(A) has also taken i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is a 'holding' company of its Indian subsidiary. The fact remains that both are independent assessees. Once they are separately assessed to tax we do not see any reason to lift the corporate veil nor see any attempt on its part to frustrate interest provisions of the Act. It is made clear that we are dealing with a tax statute wherein the benefit of doubt always goes to the assessee. Needless to say, in the aforesaid case law, no such exception has been pointed by any of the hon'ble high courts. So, this inference drawn by the CIT(A) seems to be wholly unwarranted. Accordingly, we agree to assessee's arguments challenging impugned interest u/s 234B. 11. The assessee's appeal is allowed. Order pronounced on Thursd ..... X X X X Extracts X X X X X X X X Extracts X X X X
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