2009 (4) TMI 489 - AT - Income Tax

Disallowance u/s 36(1)(va) - TDS u/s 194J - Disallowance u/s 40(a)(ia) - Interest u/s 234B - there is no dispute in the present case that the employees' contribution to PF and ESI was paid before the due date of filing of return under s. 139(1) though after the statutory dates specified in the respective Acts - this Bench in assessee's own case dt. 30th Sept., 2008, the application under s. 254(2) is pending for disposal - This ground is allowed

Regarding TDS u/s 194J - Fees for technical services - it is clear that s. 194J would have application only when the technology or technical knowledge of a person is made available to the others and not where by using such technical systems services are rendered to the others - it is clear that all the parties involved with generation, transmission and distribution of electricity are to comply with the direction of State Load Dispatch Centre and the Regulatory Commission for achieving the economy and efficiency in the operation of power system and therefore question of any person rendering service to another does not arise - when no income is paid by assessee to transmission company the question of deduction of tax at source do not otherwise arise even when under certain section of Chapter XVII-B liability of TDS is on payment of any sum and under certain sections it is on payment of income as ultimately the tax is on the income and deduction of tax at source is only one of the modes of collection and recovery of the tax - Held that: provisions of s. 40(a)(ia) are not applicable in the present facts of the case

Regarding interest u/s 234B - levy of interest under s. 234B is mandatory but it is so only when the condition precedent for payment of advance tax exist - Since assessee made no default in paying advance tax in regular assessment, interest under s. 234B could not be levied in reassessment proceedings - Appeal is allowed by way of remand to AO