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TMI Blog2018 (3) TMI 1176X X X X Extracts X X X X X X X X Extracts X X X X ..... t or by NHAI. Alternative contention of the assessee also needs examination whether the fee as has been prescribed at ₹ 1 per annum which is payable by the concessionaire to NHAI in consideration of grant of the project highway on BOT basis. This also requires examination. Similar are the facts relating to the issue of TDS under Section 194C - Decided in favour of assessee for statistical purposes. - I.T.A. Nos.102/Nag/2017 to 106/Nag/2017, I.T.A. Nos.107/Nag/2017 to 111/Nag/2017, Stay Application No.01/Nag/2018 - - - Dated:- 7-3-2018 - Shri G. D. Agrawal, President And Shri Mahavir Singh, Judicial Member Appellant by : Shri Rajesh Loya, CA. Respondent by : Shri R.K. Baral, Senior DR. ORDER Per Bench These ten appeals by the assessee for the assessment years 2011-12 to 2015-16 have been directed against the order of learned CIT(A)-2, Nagpur dated 28th February, 2017. The assessee has also filed stay application No.01/Nag/2018. 2. At the outset, learned counsel for the assessee took up the stay application and when this stay petition was argued, it was gathered that ultimately, the issue has to go back to the file of the Assessing Officer for fresh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on Agreement executed between them and the assessee. 5. Without prejudice to Ground No.2 3, the learned CIT(A) erred in law and on facts in holding that the TCS should have been collected on the toll revenue collected and belonging to the concessioners. On the facts and circumstances of the case, the TCS, if required to be collected, would be on the concession fees of ₹ 1/- as per the concession agreement. 6. That the learned CIT(A) erred in law and on facts in confirming the action of AO of charging interest u/s 206C(7) of the Income Tax Act. The interest charged is improper. 4. Similarly in respect to other five appeals, which are in respect to the dispute of TDS u/s 194C of the Act, learned CIT(A) confirmed the action of the Assessing Officer in holding that the assessee is in default u/s 201(1) of the Act and consequent charging of interest u/s 201(1A) of the Act on account of non-deduction of TDS u/s 194C of the Act on the amount paid as grant by the assessee to the concessionaires, who deposited into escrow account. For this also, the assessee in ITA No.107/Nag/2017 for assessment year 2011-12 has raised the following grounds :- 1. That the orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder the Ministry of Road Transport and Highways of the Government of India and it is the assigned the function of NHAI to develop, maintain and manage national highways and other highways vested in or entrusted to it by the Central Government. NHAI carried out the functions of development, maintenance and management of national and other highways through contractors appointed by it and called as concessionaires. Concessionaires are appointed under the Concession Agreement executed between NHAI and the concerned concessionaire as per the provisions of National Highways Authority of India Act, 1988. The learned counsel explained that under the concession agreement with NHAI, the concessionaire is granted exclusive right, licence and authority to construct, operate and maintain the project highways and regulate the use thereof by third parties for a specified period and transfer the said project to NHAI upon termination of completion of specified term of agreement. Accordingly, the concessionaire is entitled to levy, collect an appropriate fees from the vehicles and persons liable for payment of fee for using the project highways or any part thereof and refuse entry of any vehicle if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e users subject to and in accordance with the agreement. As per agreement CA-1 and CA-2, an escrow account was required to be opened in a nationalized bank by the concessionaire and the methodology of the amount to be deposited and withdrawn in the escrow account is guided by the national policy and also by the agreement between the parties. Consequently, the concessionaire deposited revenue including loan finance in the escrow account. Similarly, the withdrawals were also made by the concessionaire for the purpose specified in the agreement. The returns of income were filed by the concessionaires accordingly. 9. But, the Department raised the demand of ₹ 32,60,85,371/- holding that the assessee NHAI is the real and actual owner of toll plaza and liable to collect TCS u/s 206C(1C) of the Act on the toll amount collected by the concessionaire. Further, according to the Assessing Officer, the assessee has not deducted any TDS also u/s 194C of the Act on equity grant and the collection utilized for the project asset. The details of TCS amount was ₹ 9,31,29,095/- and interest at ₹ 1,82,67,273/-. Similarly, the TDS demand was ₹ 16,32,42,170/- and consequent in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is, therefore, inferred that the TAN holder is the real and actual owner of the highway projects and the toll plazas etc. The terms and conditions of the concession agreement towards granting the rights to operate the toll plaza and the collection of fee etc. are of the same nature which are akin to the lease and license agreement to transfer the interest of toll collection rights of the project to the concessionaire for the limited period. Since the concessionaire were given the commercial rights of collecting the toll, on behalf of the NHAI, for limited period, it was liable to collect TCS on such toll collected. In view of the above discussed position, TAN holder, NHAI, Nagpur, ought to have collected TCS on toll collected and deposited in the escrow account. 13. According to learned counsel, the Assessing Officer misconstrued the facts and has not properly appreciated the agreement with the concessionaire and the mechanism and also the purpose of opening the escrow account. Similarly, in respect to the applicability of provision to Section 194C of the Act, the learned counsel stated that NHAI has granted the right of concession to concessionaire to develop the project a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inding of the Hon ble ITAT Nagpur Bench, Nagpur as regards to the collection and deposit of toll fees in Escrow Account and remittance of such amount to the Consolidated Fund of India . 14. In view of these facts, learned counsel for the assessee made a plea that all these ten appeals can go back to the file of the Assessing Officer for examining the agreements as well as examining the issue of escrow account, whether it is opened in the joint name or in the name of the contractor. 15. When this proposition was put to learned Senior DR, he fairly conceded the position and stated that the issue can be examined by the Assessing Officer afresh in the light of the agreements and also after examining the escrow account. 16. After hearing the rival contentions and going through the facts and circumstances of the case, we are of the view that let the issue be remitted to the file of the Assessing Officer for examining whether the escrow account is opened by the concessionaire in its own name or jointly. The Assessing Officer will also examine whether the concessionaire has been granted contract of developing project highway by which project asset shall be created on BOT bas ..... X X X X Extracts X X X X X X X X Extracts X X X X
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