no tax shall be deducted at source under section 194-I
Miss Komal Mantri
Author
Court :
The Delhi I-T Tribunal
Brief :
Citation :
The Delhi I-T Tribunal has held that no tax shall be deducted at source under section 194-I in respect of the amount remitted to the franchisees for use of infrastructure facilities. The assesseecompany was engaged in the business of providing computer education and training, through its own centres and also through franchisees. The franchisee was required to provide the infrastructure facilities, like classroom facility, equipment, furniture, fixture and administrative set-up, against which the franchisee received infrastructure claims as per the agreement. The AO was of view that the real user of the infrastructure provided by the franchisee was the assessee and, hence, the amount of infrastructure fee paid was nothing but consideration for the use of infrastructure facilities on which assessee was required to deduct tax at source under section 194-I. The tribunal held that the primary objective of the agreement between the assessee and the franchisees was to share the revenue and certainly not to hire the premises provided by the franchisees. Therefore, the assessee was not liable to deduct tax under section 194-I in respect of the amount shared by it and remitted to the franchisees.
Judgement posted by
Miss Komal Mantri
Chartered Accountant
ME!!.... am an optimistic person with strong will power and zeal to work.. Currently working in PwC....
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