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TMI Blog2012 (7) TMI 175X X X X Extracts X X X X X X X X Extracts X X X X ..... facts of the case are that assessee company entered into contract with Enercon (India) Ltd. [in A.Y. 05-06, 06-07 & 10-11] & RRB Energy Ltd. [in A.Y. 08-09] for supply of plant & machinery of windmill, for civil/electrical works and for erection/commission of windmill. It placed three separate orders for the same in each year, the cost details thereof is as under:- S.No. A.Y. Name of Supplier Total Cost Cost for supply of P&M of windmill Cost for civil/electrical works and for erection/commission of windmill 1. 05-06 Enercon (India) Ltd. 3,00,00,000/- 2,80,00,000/- 20,00,000/- 2. 06-07 Enercon (India) Ltd. 3,67,00,000/- 3,37,00,000/ 30,00,000/- 3. 08-09 RRB Energy Ltd. 2,93,00,000/- 2,56,50,000/- 36,50,000/- 4. 10-11 Enercon (India) Ltd. 25,00,000/- (Advance payment) 25,00,000/- (Advance payment) - Tax was deducted at source u/s 194C on payment made towards cost of civil/electrical works and for erection/commission of windmill. No tax was deducted on payment made towards supply of P&M of windmill. 4.1. AO issued show cause notice (reproduced at Page 1-7 of the order) stating that assessee's contract for supply of P&M & erection/commissioni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest u/s 201(1A) or penalty u/s 271C. Accordingly, AO in view of decision of Hon'ble Supreme Court in case of M/s. Hindustan Coca Cola Beverage Pvt. Ltd. Vs. CIT wherein it was held that if deductee has paid tax on its income then tax again should not be collected from deductor, did not raise any demand of TDS u/s 201(1) but raised demand of interest of Rs. 81,682/-, Rs. 1,05,872/- & Rs. 34,874/- for A.Y. 05-06, 06-07 & 08-09 respectively u/s 201(1A) on alleged non deduction of tax at source on supply value of plant & machinery upto the date of filing of income tax return by the deductee. However, for A.Y. 10-11, demand of Rs. 50,000/- & 2,000/- under both the sections i.e. 201(1) & 201(1A) respectively was raised for the period upto the date of order. 4.2. The CIT (A) in Para 2.3.1 (Page 7-8 of its order) after reproducing section 194C held that the word "any work" in section has widest possible scope to include all sorts of works & as held by Supreme Court in case of Associated Cement Company 201 ITR 435, "any work" includes "work contract". 4.3. In Para 2.3.2 (Page 8-10 of the order), CIT(A) after observing that the real & basic intention of assessee was to set up & insta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n which reliance has been placed by Assessing Officer as well as by Ld. CIT (A) were stated to be distinguishable and ratio of these decisions were read also by Ld. A/R and it was submitted that the ratio of these decisions indirectly supports the case of the assessee. Reliance was placed on various case laws mentioned in the written submissions. Further, reliance was placed on the decision of Tribunal in case of Rajasthan Rajya Vidhyut Utpadan Nigam Ltd. decided in ITA Nos. 719 to 722/JP/2010 vide order dated 25.2.2011, copy of the same was also filed. It was submitted that in this case also similar issue was involved and Tribunal has confirmed the order of Ld. CIT (A) who decided the appeal by following the earlier order of the Tribunal decided in ITA No. 474 and 525/JP/2009 dated 23.10.2009. Further, it was submitted that in case of Karnataka Power Transmission Corporation Ltd., the Bangalore Bench of the Tribunal has taken a similar view was taken as that of case of the assessee. Copy of this decision was also filed by Ld. A/R. 7. On the other hand, the Ld. D/R placed reliance on the orders of Assessing Officer and Ld. CIT (A). 8. After considering the submissions and perusin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g material purchased from such customer but does not include manufacturing or supplying a product according to the requirement or specification of a customer by using material purchased from a person, other than such customer. In present case BHEL has supplied the Steam Generator and Stem Turbine Generator as per the specification of the assessee by using the material purchased from persons other than the assessee and, therefore, payment towards supply of such plant does not fall in the scope of work as made effective from 1.10.2009. This Explanation though effective from 1.10.2009 only explains the scope of work which definitely can be considered for ascertaining the scope of the work for the purpose of section 194C. This Explanation is also in consonance with the two decisions relied by the learned A/R. In case of Power Grid Corporation of India Ltd. vs. CIT, 108 ITD 340 (Hyd.), it was held that if the equipments are manufactured as per the design, engineering etc. supplied by the supplier, it would not result in a work contract especially when all the materials belong to the supplier, even though it produced a tailor made product. Erection portion being subsequent to passing of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... short deduction of tax at source, if any, by excluding the payment towards supply of machinery, spare parts as well as freight and insurance. It was further held that the BHEL has already paid tax on the amount paid by the appellant to it and, therefore, the appellant cannot be treated an appellant in default in terms of section 201. 10. Those above cited two decisions are identical to the facts of the assessee. We also agree with the contention of ld. A/R that subsequent action of the assessee in deducting tax at source on the supply part to avoid litigation cannot be a basis to hold that assessee was liable to deduct tax at source in earlier years. It is a settled law that there can be no estoppels against law. In these circumstances, we uphold the order of the CIT (A). The assessee is not liable for deduction of tax at source u/s 194C on the supply part of the order. The demand raised u/s 201(1) is therefore rightly vacated by the CIT (A) and consequently the demand raised u/s 201(1) is also rightly vacated by him. Both the orders of the CIT (A) is thus upheld by dismissing the appeal of the department." The facts are similar in the present case also, therefore, we are of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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