S. 194-I Income Tax Act | TDS Cant Be Deducted In Absence Of Payment Of Rent
Case: Commissioner of Income Tax, Bhubaneswar v. Western Electricity Supply Company of Odisha Limited (WESCO) & Other Connected Matters
Coram: Chief Justice Dr. S. Muralidhar and Justice R.K. Pattanaik
Case No.: ITA No. 4 of 2011
Court Observation: “In absence of there being any payment of rent or even deemed rent by the Respondents to OPTCL there was no obligation under Section 194-I of the IT Act to deduct TDS from the wheeling charges paid to OPTCL.”
“The assessees have not used anything belonging to OPTCL nor the assessees are a party in the petition filed by OPTCL to OERC for the fixation of the tariff. If the assessees were paying rent or were using any equipments of OPTCL, then assesse should have been a party before the OERC in respect of the fixation of the price in the case of OPTCL. This is because the assessee would be an affected party. The assessees are only a party in the fixation of the price between the Gridco and assessees and it in that order that a parallel identical direction is also available in para 37 and 294 and 295 of the order in the case of Gridco. Thus, it is evident that the raising of invoices by OPTCL on the assesse is for the purpose of raising for first change on the receipts of Gridco and for no other purposes. As mentioned above, the assessees have not used any of the equipments of OPTCL and in absence of use in any manner whatsoever, of the equipments of OPTCL by the assessee, no rent can be deemed to have been paid for the purpose of invoking of section 194(I) of the Act.”
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