9911796707
TMI Blog2014 (12) TMI 1323X X X X Extracts X X X X X X X X Extracts X X X X ..... ated 27.11.2009. 2. Only issue in this appeal of assessee is against the order of CIT(A), confirming disallowance of expenditure for non-deduction of TDS u/s. 194-I of the act, by invoking provisions of section 40(a)(ia) of the act, on rent paid to Kolkata Port Trust (KPT). 3. Brief facts are that the assessee has claimed expenditure on account of rent paid to KPT at Rs. 54,21,256/-. The assessee has not deducted any tax at source on payment of this rent to KPT. The AO required the assessee to explain as to why expenditure claimed on account of payment of rent to KPT be disallowed by invoking provisions of section 40(a)(ia) of the Act for non-deduction of TDS u/s 194I of the Act. Accordingly, AO disallowed the expenditure debited on accou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e institution entitled for registration under section 12A of the Act. For assessment year 2007-08 involved in this appeal, Kolkata Port Trust was assessed in the status of a charitable institution and there was no demand raised against it and refund of the order of Rs. 91.61 crores was issued to it. The aforesaid facts are mentioned in the letter dated May 4, 2012 of the Kolkata Port Trust enclosed at page 17 of assessee's paper book. In view of the above facts and as argued by Ld. counsel for the assessee that the aforesaid position obtained in the case of Kolkata Port Trust viz. that it was granted registration and assessed as a charitable institution under the provisions of the Act, it cannot be disputed that the income of Kolkata Port T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of section 204 relevant for the purposes of the instant appeal is set out herein below:- "204. For the purposes of the foregoing provisions of this Chapter and section 2885, the expression "person responsible for paying: means- **** (iii) in the case of credit, or, as the case may be, payment of any other sum chargeable under the provisions of this Act, the payer himself, or, if the payer is a company, the company itself including the principal officer thereof'" The obligation to deduct tax from payments to residents is in respect of "sum chargeable under the provisions of this Act." Section 195 is applicable in respect of payments to non-residents and also stipulates deduction of income tax at source from "sum chargeable unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... argued by Ld. Senior Advocate that in the instant case no tax was at all payable by KPT for AY 2007-08. U/s 191 of the Act the person making the payment can be deemed to be an assessee in default within the meaning of sub-section (1) of section 201 only where the deductee/payee has also failed to pay such tax directly. This issue has been considered by Hon'ble Allahabad High Court in the case of Jagran Prakashan Ltd. V. DCIT (TDS) (2012) 345 ITR 288 (All) and by ITAT Kolkata bench in the case of Ramakrishna Vedanta Math v. ITO (2013) 55 SOT 417 (Kol). In the instant case, KPT was not required to pay any tax and in turn the assessee cannot be treated to be in default within the meaning of section 201(1). Accordingly, we are of the view ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same is liable for TDS u/s. 194-I of the Act, for which the assessee has not deducted any TDS. The disallowance made by invoking the provisions of section 40(a)(ia) of the Act by the AO is within the provisions of law. Hence, we restore the disallowance and the order of CIT(A) is reversed. This issue of revenue's appeal is allowed." Accordingly Ld Senior DR stated that the issue is covered in favour of Revenue. But other facet of arguments has not been countered. 7. In view of the above fact, we are of the view that in the instant case no tax was deductible at source under section 194-I read with section 204 comprised in Chapter XVII-B from the rent paid by the assessee to KPT. This is because such rent was not to be included in the tot ..... X X X X Extracts X X X X X X X X Extracts X X X X
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