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2015 (5) TMI 788 - AT - Income TaxDisallowance of transmission charges paid to U.P. Power Corporation Limited - non-deduction of TDS under section 194J - Held that:- Assessee-company is making payment of transmission charges to the transmission company in consideration of availing the benefits of the standard technical facility i.e. transmission System Network of transmission company for the purpose of Transmission of Electricity from the Generation Point to the Distribution Point and as such by merely making available the benefits of its sophisticated Transmission System Network to the applicant company, the transmission company is not rendering any "Technical Services" within the meaning of Explanation 2 to section 9(1)(vii) of the Act. The important factor which was not appreciated by the A.A.R. in the case of Ajmer Vidyut Vitran Nigam Limited [2012 (8) TMI 742 - AUTHORITY FOR ADVANCE RULINGS] is that the technical staff of Transmission Company by operating and maintaining its grid station and transmission lines, are simply discharging their own statutory functions and all are on the payrolls of the transmission company. Therefore, they do not render any technical service to the assessee-company. We have carefully examined the order of the A.A.R. and orders of the Tribunal on the issue and we find that the Tribunal has taken a consistent view that the payment of transmission charges is not payment for fee for technical services, therefore, the provisions of section 194J of the Act are not attracted. The Tribunal has also taken a view in all those cases that it is not a payment, it is only a reimbursement of the cost incurred on transmission charges. Therefore, provisions of section 40(a)(ia) of the Act is not applicable. - Decided in favour of assesse.
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