9911796707
TMI Blog1984 (6) TMI 91X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the assessee appears to be prima facie tenable, but we notice that electrical machinery including switchgear, instruments, transformers and other stationary plants and wiring and fittings of electric lines etc., are not eligible for depreciation at special rates (see notes in the depreciation table at the end of part-(III). In Entry No. 21 against item (b) in Appendix 2 part-I, sub-part (iii), the machines on which special rate of 15 per cent has been mentioned are described as follows: "the factories-general machinery and plant including rollers and driers". The aforesaid adjective used before machinery namely, "General" is significant and has been used in contrast to machineries which are not general machinery for example, in contrast to electrical machines. Generators is not general machinery. It generates electricity and is part of electrical machines and its function will remain unaltered in whatever industry it is used. Therefore, the ld. CIT (A) was justified in not allowing depreciation on generator at the special rates as it is not general machinery used in tea factories alone. The entry in question on which reliance has been placed on behalf of the assessee do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted at source by the payer of interest of Rs. 27,000 to the assessee in terms of s. 194 (1) of the IT Act, 1961. The said sum of Rs. 27,000 has been included in the total income of the assessee for the assessment year under consideration, but benefit of tax deducted at source has not been allowed on the short ground that the tax on the aforesaid income was deposited by the payer not within the financial year, corresponding to the previous year under consideration but in July, 1980 and, therefore, credit in respect of this tax cannot be given to the assessee in terms of s. 199 of the IT Act, 1961. The assessee accepts that the ITO has given credit to the company in the assessment for the asst. yr. 1981-82, but according to him, this was not correct in law. The tax benefit should be given to the assessee in the year in which the income from which the tax is deducted at source is included in the total income. 7. On behalf of the Revenue the order of the ld. CIT (A) is supported. 8. Sub-s. (1) of s. 194A stipulated that the person "responsible for paying to a recipient any income by way of interest shall at the time of credit of such income to the account of the payer or at the t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... common ground that, in the present case, M/s Pannalal Kejriwal have paid to the assessee interest of Rs. 21,195 only and have deducted tax of Rs. 5,805. The gross interest that was due to the assessee from M/s Pannalal Kejriwal was Rs. 27,000. The income of Rs. 27,000 was included in the assessee's hands in view of the provisions of s. 198, which provided that all sums deducted in accordance with the provisions of s. 194A shall for the purpose of computing the income of an assessee be deemed to be the income received. Thus even though the assessee had not received Rs. 5,805 from M/s Pannalal Kejriwal, being the tax deducted at source by them from the assessee's income of Rs. 27,000, it was deemed to be the income of the assessee in terms of the aforesaid s. 198 and was accordingly included in the assessee's total income. 14. The responsibility to pay the tax so deducted rested not with the assessee but with M/s Pannalal Kejriwal. This position has been made clear by the provisions of s. 200 and s. 201 of the IT Act, 1961. If the person who deducted the tax did not pay the same, he could be treated as a person in default and the ITO could proceed against him for recovery of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted. Sec. 199 does not go into the time limit of payment of the tax deducted, the said subject is dealt with by s. 200. It merely stipulates that tax deducted whenever paid will be treated as tax paid on behalf of the person from whose income the tax was deducted. Thus, in the present case, the tax, though deducted in the previous year relevant for asst. yr. 1980-81, was paid to the Central Govt. in the financial year 1980-81 (July 1980), corresponding to the asst. yr. 1981-82. The tax so paid has to be correlated back to the income from which it was deducted. It has nothing to do with the time of payment of the financial year in which it is paid. The deduction is directly relatable to the income from which it is deducted and as per s. 198, such deduction is deemed to be the income of the year in which deduction is made, for such deduction, and not the payment thereof to the Central Govt. is deemed to be the income received by the assessee. Such 'deducted tax' is treated as paid on behalf or the assessee when it is paid to the Central Govt. 17. The second limb of s. 199 specifies the asst. yr. in respect of which credit will be given. According to it, credit will be given in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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