Facts
a)
The National Highway Authority of India
(NHAI) granted a project to Oriental Pathways Pvt. Ltd. (OPPL) to develop a
National Highway on BOT (Build, Operate and Transfer) basis. As per the
agreement, OPPL was required to pay Rs. 1 per year to NHAI during the term of
the agreement.
b)
The development cost of highway was to be
recovered by OPPL through collection of toll. However, the toll collection was
required to be deposited in an escrow account jointly held by both the parties.
The purpose of depositing the amount in escrow account was to make a provision,
in case NHAI had to recover any amount from OPPL.
c)
Assessing Officer (AO) contended that NHAI
was liable to collect TCS from OPPL on toll fee collected by it as per section206C(1C).
d)
The CIT(A) set aside the order of the AO by
holding that the OPPL was required to pay only Re. 1 per year to NHAI and not
the toll fee. Therefore, provisions of section 206C(IC) could not be applied on
this very nominal and insignificant amount.
e)
Aggrieved by the order of CIT(A), revenue
filed the instant appeal before the tribunal.
The
tribunal held in favour of assessee as under-
