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TMI Blog2015 (6) TMI 881X X X X Extracts X X X X X X X X Extracts X X X X ..... elation to the payments in question is a share-holder, such payments may attract the provisions of S.2(22)(e), and consequently liability to TDS u/s 194. Therefore, Section 194 does not require TDS when payment is made to a non-shareholder. See ANZ Reality Pvt. Ltd. V/s. ITO(2008 (10) TMI 268 - ITAT JAIPUR-B) – Decided in favor of assessee. - ITA.No.154/Hyd/2015 - - - Dated:- 1-5-2015 - SHRI G.C. GUPTA AND SHRI P.M. JAGTAP, JJ. For The Revenue : Mr. Rajat Mitra For The Assessee : Mr. M.S. Dayakar ORDER PER P.M. JAGTAP, A.M. This appeal is preferred by the Revenue against the order of the Ld. CIT(A)-8, Hyderabad dated 24.11.2014 on the following grounds : 1. The CIT(A) erred in facts as well as in law. 2. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was deducted at source by the assessee company, the A.O. treated it as assessee in default for the tax so chargeable amounting to ₹ 3,68,094 being 22.44% and ₹ 16,40,348 under section 201(1) and also levied interest of ₹ 1,03,400 under section 201(1A). The assessee company thus was treated by the A.O. as in default for a sum of ₹ 4,71,494 vide his order dated 06.11.2009 passed under section 201(1)/201(1A) of the Act. 3. Against the order passed by the A.O. under section 201(1)/201(1A), an appeal was preferred by the assessee before the Ld. CIT(A) who, following the decision of the Tribunal in assessee s own case for A.Ys. 2005-06 and 2006- 07 rendered vide its common order dated 08.06.2012 passed in ITA.No.128 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applicability of provisions of S.201(1) and S.201(1)(1A) does not arises. As for the other advances as well, We have perused para 6 of the said order of the Tribunal. For the sake of completeness of this order, we reproduce the said para hereunder- 6. We have heard the rival contentions and perused the facts of the case. The arguments made by Shri Rajeev Sogani, learned Authorised Representative, appear to be convincing that s.194 casts obligation for TDS only when payment is made to a shareholder. It is ndisputed fact in the present case that the funds have been advanced by the assessee company to the following companies, which are not shareholders of the assessee company: (1) M/s. Citybuild Realtors (P)Ltd. (2) M/s. Indiana Clas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies Act, 1956, the dividend can be paid to a registered shareholder only. Therefore, s.194 of the IT Act, 1961 is synchronized with the requirement of the Companies Act, 1956 contained in ss.150 and 206 of the Companies Act, 1956. In the light of the above decision, it is clear that it is only where the payee in relation to the payments in question is a share-holder, such payments may attract the provisions of S.2(22)(e) of the Act, and consequently liability to TDS under S.194 of the Act. The points of distinction between the facts in the cited case and the case of the assessee, made out by the CIT(A) in the impugned order merely basing on the status of the assessee, in our opinion, are totally artificial and not valid. In this view of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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