Case Law Details
Commissioner of Income Tax (Tds) And Another Vs Lalitpur Power Generation Co. Ltd. (Allahabad High Court)
Allahabad High Court applying the principle of indivisibility of a composite contract held that contract cannot be bifurcated to subject a part of the contract to higher TDS.
Facts-
The assessee was engaged in business of generation of power. To set up that thermal power plant, the assessee entered into two sets of contracts. First, with Bharat Heavy Electric Ltd. (BHEL) to set up a Boiler Turbine Generator (BTG) and the second with Carbery Infrastructure Pvt. Ltd. (CIPL) to set up Balance of Plant (BOP).
On 19th June, 2014, individual orders came to be passed u/s. 201 of the Act describing the assessee to be in default of deduction of TDS required to be made by it at the higher rate of 10% (u/s. 194J of the Act) against the lower rate of 2% (u/s. 194C of the Act) applied by the assessee, to the payments made by the assessee in each year, against the two contracts for the works done under the head of “services of Transportation, Insurance, Erection, Installation, Testing and Commissioning of BTG”, awarded to BHEL and also the work done under the head of “Erection, Installation and Commissioning of BOP”, awarded to CIPL.
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