B.C. Kandpal, J.
1. The controversy involved in all these appeals is one and the same, hence they all are being disposed of by this common judgment.
2. These appeals have been preferred against the common judgment and order dated January 29, 2003, passed by the Income-tax Appellate Tribunal, Delhi Bench 'A' Delhi, in I.T.A. Nos. 544 to 547/Delhi of 2002. The dispute relates to the assessment years 1996-97 to 1999-2000.
3. Llearned Counsel for the parties agree that only the following question of law is involved in all these appeals and they do not press for the rest of the questions:
Whether, on the facts and circumstances of the case, the appellant was liable to deduct tax under Section 194C of the Act from the deposited amount returned to the travelling agents
4. The brief facts of the case giving rise to the present appeals are that M/s. Kumaon Mandal Vikas Nigam Ltd., made certain payments to its agents for conducting of L.T.C. tours on behalf of the Nigam. For the purpose of conducting tours, the Nigam entered into contract with a number of travel agents to organise and supervise tours on behalf of the Nigam. These parties were treated as transport contractors who provided buses and conducted L.T.C. tours for the Central Government employees on behalf of the Nigam and they were also responsible for collection of amount from the customers who actually availed of such facilities. The entire payments received by the parties were deposited with the Nigam and the Nigam on such payments used to give 85 per cent. to the contractors being hire charges and other incidental charges before the start of the tour and after completion of tour, balance 5 per cent. was used to be given on account of commission to the said contractors. Since the parties to whom the payment was given were considered as transport contractors of Kumaon Mandal Vikas Nigam Ltd., the provisions of Section 194C were applicable for the purpose of deduction of tax at source and since no tax was deducted by the Garhwal Mandal Vikas Nigam Ltd., the orders under Section 201(1)/201(1A) were passed holding the assessee in default for not deducting the tax at source as per the provision of Section 194C of the Income-tax Act and for charging the interest thereon. Aggrieved by the order passed by the Assessing Officer, the assessee preferred appeals before the Commissioner of Income-tax (Appeals), Dehradun, who dismissed the appeals of the assessee. Being aggrieved, the assessee preferred second appeal before the Income-tax Appellate Tribunal, who also decided the same in favour of the Department and against the assessee. Feeling aggrieved, the assessee has come up in appeal before this court.
5. We have heard learned Counsel for the parties and perused the entire material available on record. The KMVN is a contractor and they have appointed the commission agents and they derive the income from the agents. From a perusal of the record, it is clear that the amounts are collected and given to the KMVN who in turn gives 85 per cent. to the tour operators to be spent in organising the tours, 5 per cent. is kept as security and 10 per cent. is retained by the KMVN. It is, therefore, clear that the profits arising to the tour operators are the amount which they save from the above sum of 85 per cent. after incurring all the expenses. The KMVN asks the tour operators to arrange for their buses and to arrange for the tours and pays the amount of 85 per cent. to them. It is an agreement between the contractor and agent and the Income-tax Department has nothing to do with this internal arrangement. The liability to pay the tax is created on the contractor under Section 194C of the Income-tax Act and the contractor is KMVN who appoints the agents for his own facilities. Thus, the KMVN cannot shirk from its liability for payment of tax.
6. In view of the above, all the appeals are dismissed and the judgment and orders passed by the Income-tax Appellate Tribunal as well as by the Commissioner (Appeals) and the Income-tax Officer are hereby confirmed. The question is accordingly answered in favour of the Department and against the assessee. No order as to costs.