Provision of section 194I is applied only on the payment of Rent for deducting TDS

Last updated: 21 July 2012

Court :
INCOME TAX APPELLATE TRIBUNAL

Brief :
Assessee is a company established by the Govt. of Maharashtra and was incorporated on 31.5.2005 pursuant to the provisions of Section 131, 133 and 134 of Part-XII of the Electricity Act, 2003 relating to the reorganization of Maharashtra State Electricity Board, by the Govt. of Maharashtra which notified four companies, while restructuring the erstwhile Maharashtra State Electricity Board on 6.6.2005. Assessee purchases power from various sources and distributes and sells to the consumers. The power from the generation point to the customers is transmited through the transmission network of Maharashtra State Electricity Transmission Company Ltd (MSETCL) and Power Grid Corporation of India Ltd (PGCIL). The transmission tarrif and terms & conditions for the power to be transmitted by PGCIL from the Central Sector Station shall be as per the notification issued by the Ministry of Power/CERC from time to time. In terms of these agreements, assessee paid billing and transmission charges to MSETCL and PGCIL for transmission of electricity by using a transmission line from the generation point to the distribution point. AO in a survey conducted under section 133A noticed that assessee paid an amount of `1554.10 crores towards transmission charges upto December, 2008 and in the year relevant for the assessment year paid to an extent of `1961.20 crores on which the TDS of `176.08 crores was supposed to have been deducted by assessee under section 194I of the Income Tax Act.

Citation :
Maharashtra State Electricity Distribution Co. Ltd, Prakashgad, Anant Kanekar Marg, Station Road, Bandra (E) Mumbai 400051 PAN No.AAECM 2933 K (Appellant) Vs. DCIT TDS Range-2 KG Mittal Ayurvedic Hospital Bui lding, Charai Road, Mumbai 400002 (Respondent)