C.j. International Hotels Ltd v. Commissioner Of Income Tax

$~6 * IN THE HIGH COURT OF DELHI AT NEW DELHI+ ITA 679/2016 C.J. INTERNATIONAL HOTELS LTD. ..... Appellant Through : Appearance not given. versus COMMISSIONER OF INCOME TAX ..... Respondent Through : Mr. Rahul Kaushik, Sr. Standing Counsel CORAM:HON'BLE MR. JUSTICE S. RAVINDRA BHAT HON'BLE MS. JUSTICE DEEPA SHARMA O R D E R% 27.09.2016 Issue notice. Mr. Rahul Kaushik, Sr. Standing Counsel accepts notice. The question of law urged in this appeal is whether tax was liable to be deducted under Section 192 of the Income Tax Act, towards the amounts received by the assessee on account of service charges and tips added by its customer for the benefit of its employees. At the outset, it is pointed out that this issue engaged the attention of this court in a previous year and is covered by the judgment reported as CIT vs. ITC Ltd. (2011) 338 ITR 598. The ITAT had followed that judgment in the case of the assessee in previous years. The appeals against that judgment were reversed recently by the Supreme Court in its judgment in ITC Gurgaon vs. CIT AIR 2016 SC 2127, and consequently the judgment of this court was set aside. In view of the ratio of the court that the amounts (tips) were not tax deductible and that consequently, the assessee could not be treated as assessee-in-default under Section 201(1A), the present appeal has to be allowed. The impugned order is accordingly set aside. S. RAVINDRA BHAT, J SEPTEMBER 27, 2016 sm DEEPA SHARMA, J