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The Tax Publishers PMS International (P) Ltd. v. ITO [ITA Nos. 257, 363/(Asr)/2014, dtd. 22-3-2016] : 2016 TaxPub(DT) 2281 (Asr-Trib) Applicability of TDS on THC/IHC paid to shipping lines, custom agents was subject to TDS under section 194C TDS applicability under section 194 on deemed dividend. *Facts:* Assessee had paid Terminal handling charges (THC) and Inland haulage charges (IHC) to custom agents and various other contractors without TDS. Assessing officer read it as default of TDS under section 201/201(1A) which was confirmed by the Commissioner (Appeals). On further appeal: Assessee along with purchases/sale transactions had given loans to sister concern firms. The partners of the firms were substantial shareholders of the assessee. Assessing officer held assessee to be in default under section 201/201(1A) for non-deduction of TDS under section 194 on such deemed dividend. Commissioner (Appeals) reversed the said assessing officers order. On further appeal by the department: Held in favour of the assessee that THC/IHC fell in the scope of Circular 723 of CBDT, dated 19-9-1995 and was not subject to TDS due to operation of section 172(8). ITO v. Freight Systems (India) Pvt. Ltd. 6 SOT 473 (Del.) upheld. Held in favour of the assessee that TDS under section 194 is applicable only to shareholders, since the sister concern were not shareholders no default of TDS is applicable.

The Tax Publishers

PMS International (P) Ltd. v. ITO [ITA Nos. 257, 363/(Asr)/2014, dtd. 22-3-2016] : 2016 TaxPub(DT) 2281 (Asr-Trib)

Applicability of TDS on THC/IHC paid to shipping lines, custom agents was subject to TDS under section 194C

TDS applicability under section 194 on deemed dividend.

Facts:

Assessee had paid Terminal handling charges (THC) and Inland haulage charges (IHC) to custom agents and various other contractors without TDS. Assessing officer read it as default of TDS under section 201/201(1A) which was confirmed by the Commissioner (Appeals). On further appeal:

Assessee along with purchases/sale transactions had given loans to sister concern firms. The partners of the firms were substantial shareholders of the assessee. Assessing officer held assessee to be in default under section 201/201(1A) for non-deduction of TDS under section 194 on such deemed dividend. Commissioner (Appeals) reversed the said assessing officers order. On further appeal by the department:

Held in favour of the assessee that THC/IHC fell in the scope of Circular 723 of CBDT, dated 19-9-1995 and was not subject to TDS due to operation of section 172(8).

ITO v. Freight Systems (India) Pvt. Ltd. 6 SOT 473 (Del.) upheld.

Held in favour of the assessee that TDS under section 194 is applicable only to shareholders, since the sister concern were not shareholders no default of TDS is applicable.