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2013 (11) TMI 1263 - AT - Income TaxTax Deducted at Source - Sitting Fees paid to directors u/s 194J of Income Tax Act, 1961 - Held that:- The provisions of section 194J(1)(ba) speaks of any remuneration or fees or commission by whatever name called other than those on which tax is deductible u/s. 192 to a director of a company on which tax had to be deducted at the applicable rate and the above provision had been inserted by the Finance Act, 2012 w.e.f., 01- 07-2012 - No tax was required to be deducted u/s194J out of such director's sitting fees for the A.Y. 2007-08 - the order of the CIT(A) set-aside and the ground raised by the assessee on the issue of TDS on sitting fees paid to Directors allowed - As per the explanation to provisions of section 194J professional service means services rendered by a person in the course of carrying on legal, medical, engineering or architectural profession or the profession of accountancy or technical consultancy or interior decoration or advertising or such other profession as is notified by the Board. There was no force in the submission of the learned counsel for the assessee that sitting fees paid to the directors does not amount to fees paid for any professional services as has been mentioned in the explanation to section 194J(1) - the memorandum explaining to provisions of the Finance Bill 2012 that as per clause No.71 it was specifically mentioned that there was no specific provision for deduction of tax on the remuneration paid to a director which is not in the nature of salary. Deduction of Tax u/s.194C and 194J - Testing and Inspection Charges - Held that:- The payments made by the assessee towards testing and inspection charges cannot be construed as payments towards professional service as per the provisions of section 194J and the assessee had rightly deducted the tax u/s.194C - there was no short deduction of tax - The explanation to section 194J(1) defines professional service means the service rendered by a person in the course of carrying on legal, medical, engineering or architectural profession or the profession of accountancy or technical consultancy or interior decoration or advertising or such other profession as is notified by the Board. The nature of expenditure made by the assessee towards payments made to various persons as mentioned in the bills cannot be considered as payment for technical consultancy – Following GlaxoSmithKline Pharmaceuticals Limited Versus I. T. O. (T. D. S.) -I, Nasik [2011 (10) TMI 21 - ITAT, PUNE ] - any payment for technical services in order to cover u/s.194J should be a consideration for acquiring or using technical know-how simplicitor provided or made available by human element - There should be direct and live link between the payment and receipt/use of technical services/information - If the conditions of section 194J r.w.s 9(1), explanation 2 clause (vii) were not fulfilled, the liability under this section was ruled out - order of the CIT(A) was set aside - Decided in favour of Assessee. Deduction of Tax u/s 194C - Payment of Hiring of Cranes - Held that:- The provisions of section 194C were only applicable for such payments and not provisions of section 194-I – Following Swayam Shipping Services (P) Ltd. 2011 (1) TMI 797 - GUJARAT HIGH COURTThe assessee had given sub-contracts for transportation of goods – thus the transactions would fall within the purview of section 194C of the Act as the assessee was responsible for paying the amount in question for carrying out work in pursuance of contracts between the assessee and the transporters and as such the assessee was required to deduct tax at source at the rate prescribed under that section – Decided in favour of Assessee.
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