SHAKTI LPG LTD. Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) THE unsuccessful appellant in ITA No. 301/Hyd/1996 before the Hyderabad Bench A of the Income Tax Appellate Tribunal (for short, the Tribunal) filed this appeal under Section 260A of the Income Tax Act, 1961 (for short, the Act) feeling aggrieved by the order dated 30 -08 -2002.

(2.) THE facts, in brief, are that the appellant is an assessee and is involved in the activity of filling the liquefied petroleum gas. As a part of its activity, it is said to have entered into a contract with M/s. Imodco Inc, a firm from USA to acquire some machinery and installation thereof in the premises of the factory/plant in the year 1994 -95. A sum of US $ 1,00,000/ - was paid as consideration. However, no deduction at source, towards tax was made. Therefore, proceedings under Section 201 of the Act were initiated and a notice was issued treating the appellant as assessee in default. The reply submitted by the appellant was that the amount was paid to a non -resident and the contract was mostly for supply of goods on purchase and on that account, there was no occasion to effect deduction of tax at source. That plea was not accepted by the assessing officer and an order was passed requiring the appellant to pay not only the tax which was supposed to be deducted, but also interest thereon, being Rs. 86,735/ -. Feeling aggrieved by that, the appellant filed an appeal before the Commissioner of Income Tax (Appeals). That was dismissed on 14 -11 -1995. Thereupon, it approached the Tribunal with a further appeal. The Tribunal rejected the appeal through order dated 30 -08 -2002.

(3.) SRI S.R. Ashok, learned Senior Counsel for the respondent, on the other hand, submits that the appellant was under an obligation to effect the deduction of tax at source and to remit the same to the department, when it paid the amount of US $ 1,00,000/ - to the U.S firm and its failure, naturally resulted in initiation of proceedings under Section 201 of the Act. He contends that there is absolutely no doubt whatever, as to the taxability of the amount paid by the appellant and in that view of the matter, Section 201 is the appropriate provision. Learned Senior Counsel further submits that the appellant never came forward with a plea that the contract comprised of two parts and it cannot be permitted to canvass that contention at this stage, for the first time.