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2019 (3) TMI 1356 - HC - Income TaxTDS u/s 194C or 194J - short deduction of TDS - payments made to the subcontractor - as per revenue payment is for professional and technical services - scope of work given to the sub-contractor was construction work for grounding including straightening, cutting, unloading in the site, transporting to pre-assembly/erection site, alignment, welding, text and inspection, illumination and communication work etc. - liability of any interest under Section 201(1A) - HELD THAT:- The assessee was executing a works contract (Thermal Power Plant) for its customer. It included men, machinery, material, other tangible and intangible goods. For the said project, the services of technical personnel including engineers were inevitable. The scope of work given to the sub-contractor was construction work for grounding including straightening, cutting etc. material receipt from contractors stores or unloading in the site, transporting to preassembly/ erection site, erection, alignment, welding, test and inspection etc., illumination and communication work. The assessee was getting a physical output, a tangible structure and not merely the services of its qualified, professional engineers/staff from the sub-contractor. The said activities were undertaken with the help of men and machines which were beyond the scope of technical services. The said contract between the assessee and the sub-contractor satisfied the provisions of Section 194C of the Act and did not attract the provisions of Section 194J of the Act. The Tribunal had, thus, rightly concluded that the case of the assessee fell under Section 194C of the Act and not under Section 194J of the Act. Tribunal had noticed that the sub-contractor had already offered the payments received from the assessee to tax and, thus, there was no justification in creating additional demand on account of short deduction of tax. Since, there was no short deduction of tax at source under Section 201(1) of the Act, therefore, there would be no liability of any interest under Section 201(1A) of the Act upon the assessee. - decided against revenue
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