applicability of tDS

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This query is : Resolved

RAMESH BABU (Querist)

25 March 2009 Sir,
Ours is a govt. company,which is dealing with the power distribution business.once upon a time this company was form and part of APSEB,after sepaeration of Generation,transmission and distribution of power into 3 seperate businesses by incorporating separate companies and coportaions for each activity.Now we are paying transmission charges and service line charges to APTRANSCO for transmission of power from generation point to distribution point through their lines. the income tax authorities are issued a show cause notice for not deducting TDS under sec.194I or 194J on the above payments.

In view of the above it is requested to clarify:-

1.whether the above mentioned payments are liable for deduction of TDS u/s 194I or 194J.

and further requested

2.is there any ground/case law to give suitable reply to the TDS officer for not attracting this payments for making of TDS.

thanking you,

yoursfaithfully

G Ramesh babu

Shyam Lal Naik

Shyam Lal Naik (Expert)

25 March 2009 It is not possible to opine unless going through the contract.

Prima facie, the transaction does not seem to fall under either of the section quoted in the SCN.

How ever, the transaction is certainly a works/service contract attracting section section 194C.

I would also like to see more views.