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2015 (4) TMI 711 - AT - Income TaxShort deduction of TDS - CIT (Appeals) in confirming applicability of section 194J to management fees, section 194-I to rentals and section 194C to handling charges - whether payment made to M/s. Tolaram & Sons towards rentals, management fees and handling charges was by virtue of a common contract of providing for indivisible services to the appellant? - Held that:- If the payments are made for composite services as is the case in M/s. Ketki Enterprises, our decision would have been different. In this case, the payment made is described as "rentals" paid for premises owned by the assessee and specifications are earmarked. In these facts, the arrangement including the agency services agreement, in our opinion, will fall under the definition of "rent" providing in section 194C of the Act. Therefore, the decisions relied upon by learned counsel in the case of National Panasonic India P. Ltd. v. Deputy CIT [2005 (2) TMI 458 - ITAT DELHI-E ] is distinguishable on facts. Accordingly, we confirm the order of the Commissioner of Income-tax (Appeals) on this issue. Regarding the management fee payment the assessee heavily relied on the decision of the Income-tax Appellate Tribunal in the case of Glaxo Smithkline Consumer Healthcare Ltd. v. ITO [2006 (10) TMI 259 - ITAT DELHI]. In this regard, we have examined clause 5 of the agreement and the services rendered by the payee which are narrated in sub-clauses from "(a) to (w)" of clause 5 of the agreement and noticed that none of the services constitutes any professional or technical services as mentioned in section 194J of the Act. In fact, the order of the Commissioner of Income- tax (Appeals) is not clear as to whether these payments are considered by the Revenue as either for professional services or for technical service. They do not have clarity. The Commissioner of Income-tax (Appeals) summarily confirmed the applicability of the provisions of section 194J to these payments and approach of the Revenue is not appreciated. Therefore, in our opinion, the order of the Commissioner of Income-tax (Appeals) should be set aside on this issue and claim of the assessee should be allowed. - Decided partly in favour of assessee. There is a reference to "handling charges" in the grounds. The same were claimed by the assessee and treated by the Revenue in accordance with section 194C of the Act. Therefore, there is nothing for us to decide. Accordingly, ground Nos. 2 and 3 are dismissed.
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