The Principal Commissioner Of Income Tax, Aayakar Bhawanudaipur Rajasthan Subcity Centre, Savina, Udaipur (Raj v. Chambal Fertilizers And Chemicals Ltd., Cfcl Complexgadepan,Kota

[2025:RJ-JP:31076-DB] HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Income Tax Appeal No. 47/2025 The Principal Commissioner Of Income Tax, Aayakar BhawanUdaipur Rajasthan Subcity Centre, Savina, Udaipur (Raj). ----Appellant Versus Chambal Fertilizers And Chemicals Ltd., Cfcl ComplexGadepan,kota- 325208, Rajasthan. (Pan No. Aaacc 9762 A). ----Respondent For Appellant(s) : Mr. Shantanu Sharma, Adv. with Mr. Aditya Doda, Adv.For Respondent(s): HON'BLE MR. JUSTICE SANJEEV PRAKASH SHARMA HON'BLE MR. JUSTICE SANJEET PUROHIT 11/08/2025 Order 1.The present appeal has been preferred by the Revenueassailing the order passed by the Income Tax Officer, whereby theorder passed by the Principle Commissioner of Income Tax (Forshort ‘PCIT’) under Section 263 of the Income Tax Act, 1961 (forshort ‘the Act of 1961’) invoking Section 263 of the Act of 1961setting aside the order passed by the Assessing Officer, wasquashed. 2.Learned counsel appearing for the Revenue submits thatissuance of non-deduction of TDS on the interest paid outsideIndia or paid in India to the non-resident other than a company ora foreign company and the issue of dividend as per Section115BBD should be treated as a business income, has not beencorrectly decided by the ITAT. 3.We find that both the questions of law as framed andsuggested by learned counsel are on the issues which are onfactual aspects. Categorical factual finding has been arrived by theITAT on the aspect relating to application under Section 194 of theAct of 1961 to the facts of the present case. The ITAT has uponconsidering the provisions under Section 194A(3) reached to theconclusion that payments made to an Indian Bank would not invitededuction at source in view of provisions contained under Section194A(3)(iii). The income credited to any banking company towhich the Bank Negotiation Act, 1949 applies would be out of thepurview of Section 194 and TDS could not have been deducted. 4.In view thereto, the order passed by the PCIT remanding thematter back to the Assessing Officer on the said question was heldto be illegal and do not conform to the facts of the case. Thesecond aspect relating to the income received by way of dividendon account of declaration of dividend was examined factually bythe ITAT and it has reached to the conclusion that the assesseehad 33.33% share which were more than 26% shares prescribedunder Section 115BBD of the Act of 1961 and therefore, theincome received from the joint venture was to be treated asdividend income. 5.These are factual findings and this Court, therefore, is notrequired to go into the same. No other question of law arises inthe present appeal and the same is accordingly, dismissed. 6.Pending application, if any, also stands disposed of. (SANJEET PUROHIT),J (SANJEEV PRAKASH SHARMA),J MAHIMA/RAHUL/23