The Tax Publishers2013 TaxPub(DT) 0790 (Del-HC) : (2013) 050 (I) ITCL 0321 : (2014) 265 CTR 0518 : (2013) 094 DTR 0415

INCOME TAX ACT, 1961

--Tax deduction at source--Under section 194C or 194-I Payments made to clearing and forwarding agents--Assessee-manufacturer hired godowns on rent and also engaged clearing and forwarding agents to manage them for various purposes. Assessing officer observed that assessee wrongly deducted tax at the rate of 2.2 per cent under section 194C from the amounts paid to clearing and forwarding agents as assessee ought to have deducted tax at the rate of 22 per cent under section 194-I because they contained warehousing charges, therefore, he treated assessee-in-default and charged interest under section 201(1A) and made consequential demands. Held: Was not justified, as it was discernible from the materials on record that assessee had rented premises from their landlords and payments of rent were made after deduction of tax in terms of section 194-I. Also, what the assessee paid to the clearing and forwarding agents as warehousing charges was the consideration in terms of the agreement which was tax deductible under section 194C at the 2.2 per cent and it was for the assessing officer to have established how section 194-I could be attracted to the amounts or charges paid to clearing and forwarding agents in terms of the agreements. In absence of any such material placed by assessing officer, the orders of Commissioner (Appeals) and Tribunal were to be upheld.

Income Tax Act, 1961, Section 194C

Income Tax Act, 1961, Section 194-I

Income Tax Act, 1961, Section 201(1A)

In the Delhi High Court

S. Ravindra Bhat & R.V. Easwar, J.J.

CIT v. Hindustan Lever Ltd.

ITA 516/2012

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