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2011 (12) TMI 546 - ITAT DELHITDS u/s 194J or 194C - treating the fees paid for wheeling/transport charges as payment for technical services - Held that:- The payee does not upgrade the knowledge of the assessee when it transmits electricity. While there may be supervision of transmission work by the technical personnel of the payee, there is no human intervention in so far as the assessee is concerned regarding the transmission. Therefore, none of the conditions is satisfied in this case. Even if it is assumed that technical knowledge can be upgraded without the presence of human beings by way of handing over drawings and designs or a technical service can be rendered by robot (machines) without intervention of human element, the classification of the services rendered by the assessee as technical service is not free from doubt. In such circumstances, the assessee cannot be saddled with higher liability for tax deducted at source as it is only expected to deduct tax on the basis of commonly understood meaning of the provision. We may also look at the issue from the point of view of the recipient. The transmission of electricity for the assessee has been undertaken in the normal course of its business and the income is to be classified as business income. This may lead to no liability for tax deduction at all. Thus, the issue is vexed and in such a situation, the assessee is not liable to be saddled with higher liability for deduction of tax at source. Accordingly, it is held that no further liability could be fastened on the assessee and the ld. CIT(Appeals) erred in allowing the appeal partly.
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