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2019 (6) TMI 547 - HC - Income TaxTDS u/s 194C OR 194J - deduction of tax at source on the payment of outsourcing expenses - as per ITAT tds is to be deducted u/s 194C instead of section 194J - HELD THAT:- CIT (Appeals) and the Tribunal examined the nature of expenditure and came to the conclusion that the assessee had hired the services for various works such as storage of data, scanning of documents, processing charges, call centre operations etc. Looking to the nature of services outsourced, it was held that the same were basically clerical services of repetative nature of work and payments were therefore, neither for managerial nor for technical services. Having perused the documents on record and looking to the nature of services described, we do not find that the Tribunal has committed any error. The work outsourced was in the nature of clerical work. No question of law arises. TDS u/s 194C or 194J - Short deduction of tds - charges of the event management expenses paid by the assessee - HELD THAT:- CIT (Appeals) and the Tribunal noted that the assessee had arranged conference at Agra. The payments were essentially for domestic ticketing, reimbursing hotel expenses, tour leaders’ expenses. Such services were essentially in the nature of travel agent who had arranged the ticket booking and hotel facilities. The Tribunal therefore held that payments were not for any technical services availed by the assessee and TDS deductible u/s 194C instead of 194J . No question of law arises. Quantum on which the deduction of tax at source would be made - deductible from payment of net insurance commission to the agents, after excluding the service tax component from the gross commission - HELD THAT:- Tribunal referred to the CBDT circular essentially providing that the deduction of tax at source has to be made in relation to the income of the payee. The service tax component not being the part of the income, liability of deducting tax on this component therefore does not arise. Special reference was made to the case of the landlord and tenant where the rent paid would require deduction of tax at source, but excluding the service tax component. In the CBDT circular it has been clarified that where the service tax component is separately indicated, the same would not find part of the payment inviting deduction of tax at source - No error in view of the Tribunal. In the present case, the payment made to the agent was the net commission payable excluding the service tax component which in the law the assessee was required to directly deposit with the Government.
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