The Income Tax Appellate Tribunal ( ITAT ), Kolkata bench, while hearing an appeal by M/s. MCC PTA India, held that the wharfage charges paid to Kolkata Port Trust cannot be treated as rent and the same is not subject to TDS under the provisions of Section 194I of the Income Tax Act.
The assessee was aggrieved with the order of the department disallowing the expenditure for non-deduction of TDS u/s 194I of the Act paid on account of rent to Kolkata Port Trust on ground of non-deduction of tax at the source.
Before the Tribunal, the assessee relied on the decision of the Tribunal wherein it was held that the “KPT” is a charitable Institution and no tax is deductible at source u/s 194I of the Act.
It was further contended that wharfage is a fee charged by the KPT for the use of a platform built out from the shore into the water supported by piles and provides access to ships and boats for loading and unloading of cargo, hence, it cannot be treated as rent.
Relying on the pat decisions, the Tribunal accepted the contention of the assessee and held that the “KPT” was assessed in the status of Charitable Institution in pursuance of order of this Tribunal and its income is exempt in terms of section 11 of the Act having registration u/s. 12A of the Act. Since the ‘KPT‘ is a pubic charitable trust and no TDS is liable to be deducted at source by the assessee, the bench said.
The bench also examined the relevant provisions of the Major Ports Act 1963, and held that no fixed rate levied or recoverable on all cargo/container landed or shipped or transshipped within the port limit and approaches or passing through the declared landing stage of the port and, thus, the charges collected by the ‘KPT ‘is not a rent attracting the provision u/section 194I of the Act.
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