C.L. SETHI, J.M.: - (1.) THE assessee is in appeal against the order dated 11-2-2002 passed by the Commissioner (Appeals) in the matter of an order made under section 201(1)/194-I of the Act for assessment year 1996-97.
(2.) In the solitary ground the assessee has disputed the Commissioner (Appeals)'s order in confirming the demand raised under section 201(1)/194-I of the Income Tax Act. It was noted by the assessing officer that in the case of survey conducted on 23-6-2000, on the basis of allegation made by Sri Shyam Sunder Gupta, one of the landlords of the building at 2, Dr. Suresh Sarkar Road, Kol.-14, which was being occupied by the assessee as tenant since 1998-99. It was alleged by Mr. Gupta in his petition dated 14-6-2000, since 1995 the assessee-tenant has not issued the certificate to him though it deducted TDS amounting to Rs. 10,000 per month. He further submitted that out of monthly rent of Rs. 50,000, he was paid only Rs. 40,000 per month and the balance amount of Rs. 10,000 was deducted by the tenant and no TDS certificate was issued. In the course of survey under section 133A it was detected that no tax was deducted at source by the assessee under section 194-I. Opportunity of being heard was given to the assessee by the assessing officer. It was submitted by the assessee before the assessing officer that the sum of Rs. 44,600 was paid on account of services rendered to the assessee and Rs. 5,400 was paid on account of rent. Out of Rs. 44,600, Rs. 10,000 was deducted because the landlord was not providing services as initially agreed. It was further stated that out of balance amount of Rs. 40,000, a sum of Rs. 5,400 was being paid to Kolkata Municipal Corporation and the balance Rs. 34,400 were paid to the owners. It was also contended that the service charges paid by the assessee amounting to Rs. 34,600, that is, Rs. 44,600 minus Rs. 10,000 did not fall within the ambit of section 194-I but was covered by section 194C on account of services rendered to the assessee. Having discussed the explanation given by the assessee and the provisions of law the assessing officer was of the view that the services amounting to Rs. 34,600 would come within the ambit of rent as per Explanation I to section 194-I. He, therefore, held that the assessee had contravened the provisions of section 194-I by not deducting the tax at source from the total amount of Rs. 40,000 per month, i.e., Rs. 4,80,000 p.a. @ 15 per cent thereof. He, therefore, raised a demand of Rs. 72,000 being 15 per cent as tax deductible at source on the gross amount of rent of Rs. 4,80,000. On appeal, the Commissioner (Appeals) confirmed the action of the assessing officer by saying that the service charges were nothing but rent paid by the assessee in another name.
(3.) BOTH the parties have submitted their respective contentions as stated in the assessing officer's order as well as in the Commissioner (Appeals)'s order.;