THE COMMISSIONER OF INCOME TAX vs. KARNATAKA POWER TRANSMISSION CORPORATION LTD

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ITA/298/2011HC KarnatakaKAHC01065058201115 March 2012Bench: RAVI MALIMATH,N.KUMAR4 pages
AI SummaryAllowed

What did the High Court hold?

The Tribunal was justified in holding that tax was deductible at source only on the work component of the contract and not on the material component. Consequently, interest under Section 201(1A) was not leviable.

What were the facts?

The appeal concerns the taxability of a composite contract. The assessee contended that tax deduction at source was only applicable to the 'work' portion of the contract, not the 'material' portion.

What were the issues?

Whether tax deduction at source is required on the entire value of a composite contract or only on the work component. Whether interest under Section 201(1A) is leviable when no tax was deductible on a part of the contract value.

Which sections of the Income-tax Act were involved?

Section 201(1A)

AI-generated summary — verify with the full judgment below

I IN fl HIGH caiwr OF KARNATAKA AT BANGALORE DAThD ThI.S THE 13Th .DW OF MARCH 2012 Th3 HCflLE 7ffXSI’ICE IL KUMAN ‘flil:. HOWELB MR. JUflCE RAVI LLMATh. fl’ANO220i1 Been: I The Co of Inoometax, L7U,JSSTowers, BSK III Stage, Bau:,p]ora 2 The IonitTax OSeerTDS, 55 1, SM1ab Building, Vhthweshwaranagar, Mflore-570 0C 3. The. lireinc Tax ocrj flhl (TDS) JSS Towers, BSK ifi Stage, Bangaicre. .APLLANTh (By Sri MM.Seshachala for K.VAra, Adeate) - 0U wx .4 00 U

D0Ux 1• x I 4 z And: KarTflka Power Trarwmission ii Cox...ratbn Ltd.., Bangalore M*r Works (B) Nslonf Hassan. mRBSR)NDENT (By Sri.. Chythana LX., Ad..ate) 2 This ifA is filed under Saition 2A of LT.Act, 0 i%i ning out of OF 4 & dad 23.0a2011 passed in I’M No.1O18Barg2, ftr the Assessment year I OD8, praying dat this Hortble Court may he psed to formulate the suhetandal questions of law 4 stated therein This ifA on for Hearing tins day, I NJLVM 4, dehwred the following TI..b appe. is ‘w the rw’snua The questions of law dat arise for consideration in this appeal . are as under: ijt,War the 7aflJg was pj: frj sphffing tp the ccintrad whick to the was gj

3 cf the conpostte contract, fnto parts such as part of the contract aftflbutabW to the value cf the mr’ involved in the exeasticm ofthe work and otherpart of the confr such as dvii works and ftjQfl9 the view that tar was requb ...•. to be deducted at source on in respect of the work part cf the contract and oct materialpart ofthe wnfrcflP (2)Whether the 7flbunal was justified in conc.tudng that interest under Section 201(M) of the Income Tax Act I6I is not leviable, as the assessee was not liable to ma any deductions, in respect of the value of the material part of the contort, the’ih the contract was one of whole corttractr 2. Thin Court had an occasion to conãler ffig appeals where the said qutinns were kxl in the case of Commissioner qfhtoome lbx and hers at ramaaka Paver fl’anmintaa Cep.ra Limited dissed of on en date and has answered

1 OW I UI W MAIAIIA Nib ‘I WUR - OF KARN U’AKA HIGH COUfl OF KARNATAICti HIGH COURT OF KARNATAKA HIGH LOUT OF 1cae40rAxA HIGH COU 1w L at I! C E n ‘VW 44 I *

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