Case Law Details
Delhi High Court (HC) in the case of CIT Vs NIIT Ltd. (Taxpayer) [2009-TIOL-533-HC-DEL-IT], on the issue of whether the amount paid by the Taxpayer to the franchisees, pursuant to a franchises agreement (Agreement), can be considered in the nature of rent, for the purpose of tax deduction at source (TDS) under the Indian Tax Law (ITL). The HC held that the Agreement, when read as a whole, indicated that the main intention of the parties to the Agreement, was to carry on the business and share the revenues therefrom and not to let out the premises and infrastructure therein, in isolation. Hence, the payments made cannot be considered in the nature of rent and are not liable for TDS.
Facts of the case
- The Taxpayer is engaged in the business of providing computer education and training, through its own centres and through franchisees.
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our instituition under ministry of Textile, Govt of India have given training to the candidates sponsored by Govt of Kerala through their agency (KSWDC). They have paid the training fees, transportation charges, tools cost to us. Can they deduct TDS from our payment