×Latest Case Laws on Income Tax by various Income Tax Appellate Tribunals in India
These are the latest case laws decided by various Income Tax Appellate Tribunals (ITAT) of India on Income Tax which have been published recently. The case laws are open for discussion and we invite expert comments from our members on its applicability and effect on relevant issues.
These six appeals of the Revenue are against common order of the ld.CIT(A)-8, Ahmedabad dated 25.3.2015 passed for the Asstt.Years 2005-06 to 2010-11. Since common issue is involved in all these appeals, the same are disposed of by this consolidated order.
2. Revenue has filed separate appeals for each assessment year. Grounds raised in all these appeals are identical except change in the figures of quantum. In short, sole grievance of the Revenue in all these appeals is that the ld.CIT(A) has erred in deleting demand raised by the AO under section 206C(6A)/206C(7) of the Income Tax Act, 1961 of the following amounts in respect of respective assessment years:
3. The facts being common in all the years under appeals, we notice the facts, except quantum, from the Asstt.2005-06 for the sake of brevity for adjudication of the issue.
4. Brief facts as emerges out from the record are that, the assessee is a wholly owned subsidiary of National Highway Authority of India (NHAI) incorporated to construct express highway between Ahmedabad and Vadodara. On verification of record, it was noticed by the AO that the assessee company had given licence to Col. Pankaj Roy Bhatia (Retd.) proprietor of A B. Infrastructure to collect toll tax on various places on the expressway between Ahmedabad and Vadodara. During the F.Y.2004-05, total amount of toll collection was Rs.12,22,24,427/-, however, the assessee company has not collected TCS from the said A.B. Infrastructure and not paid to the government. During the course of verification, the AO has noticed that the assessee company had started its operation from F.Y.2004-05, but had not collected any TCS on the toll collected by it. However, AO noticed that w.e.f 27.12.2010, the assessee company had entered into a contract with M/s.MEP Toll Road Pvt.Ltd., Mumbai for collection of toll and till the date of verification i.e. 8.3.2011 TCS amount of Rs.27,59,341/- has been collected and deposited in the government account. Therefore, ld.AO issued show cause notice as to why order under section 206C(6A)/206C(7) of the Act should not be passed in this case qua toll tax collected by A.B. Infrastructure. The assessee submitted its reply dated 26.3.2012 stating that the assessee-company was not liable to deduct TCS under section 206C(1C) of the Act before 29.12.2010 as the company did not transfer the right to collect toll tax to the Agency, rather the agency was engaged sole for the purpose of collecting toll on behalf of the assessee, and whatever collection made, was deposited by the agency in the very next day in assessee’s bank account. For this work, the assessee was paying manpower charges to the collecting entity besides services charges at the agree rate. Toll collection is nothing but an income of the assessee, which was collected by the Agency on its behalf, and therefore, provisions of section 206C(1C) was not applicable, as the right to collect toll was not transferred to the agency. The assessee its reply also distinguished the treatment given by the assessee company before 29 12.200 and after 29.12.2010, which was incorporated by the ld.AO in his order in page no.5 to 7 of the assessment order. However, the ld.AO has not satisfied with submissions of the assessee. He held that right to collect the toll has been granted by the assessee to the said A.B. Infrastructure by entering into a contract agreement titled “Contact for department collection of fee”. The AO has referred para 23 of the contract regarding obligation of the collecting entity. He has also stated that sub-clause (a) to (o) indicate that the right to collect the toll was transferred by the assessee to A.B. Infrastructure. It was further held by the AO that as per the provisions of section 206C(1C) of the Act even in case of partial transfer of the right or interest, the case of the assessee clearly falls within this purview. Accordingly, the ld.AO treated the assessee as assessee-in-default for not collecting tax at source from toll collecting entity at the rate of 2%, and also levied interest under section 206C(7) of the Act.