TMI Blog2012 (11) TMI 222X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessee by Shri G.Sarangan, CA for Shri M. Ramdas, CA Revenue by Ms. S. Vijayaprabha, Jr. DR O R D E R Per B.R.BASKARAN, Accountant Member: The appeal filed by the assessee is directed against the order dated 08-01-2010 passed by the Ld. CIT(A)-V, Kochi and it relates to the assessment year 2006-07. 2. The assessee is assailing the decision of the Ld. CIT(A) in confirming that the assessee is liable to deduct tax at sour under section 194J of the Act on the amount of Rs.12,00,000/- paid by the assessee-company to its holding-company and consequently, confirming the disallowance made u/s. 40(a)(ia) of the Act for non-deduction of tax at source on such payment. 3. The facts relating to the said issue are stated in br ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the impression that the provisions of sec.194J shall not be applicable to the above said payment. Had the view of the AO was known earlier, the holding company would have obtained similar certificate u/s 194J of the Act also. The Ld. AR further submitted that the provisions u/s. 40(a)(ia) shall apply only in respect of the payments which remain payable as at the year end and since the assessee has paid the entire amount during the course of the year, the provisions of sec. 40(a)(ia) shall not apply to the said payment. In this regard, he relied on the Special Bench of ITAT, Visakhapatnam Bench in the case of M/s. Merilyn Shipping and Transports vs. ACIT (136 ITD (SB) 23). 5. On the contrary, the Ld. DR submitted that the assessee ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent is separately charged and this also includes facilities such as Common Water Supply System, Car porch, Record Room, Security Cabin etc. SILK s Company Secretary was also Holding Charge of SIFL. Framing of Rules/standing orders relating to Employee payments such as Medical reimbursement, travelling and issuance of other relevant guidelines from time to time are all done by SILK. Directors to the Board of SIFL are inducted by the Holding Compnay SILK . Thus, it is seen that the amount of Rs.12.00 lakhs was paid in connection with various types of services referred supra and it is claimed that part of the said amount is paid towards rent also. 7. Now the question that arises is Whether the services mentioned above would fall in the cat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g company is providing with managerial, technical an consultancy service to the appellant company in the form of recruitment, training, promotion, long term agreement, pay revision of employees, liaisoning with Govt. of Kerala and other various departments. Framing of rules/standing orders relating to employee payments such as medical reimbursement, travelling and issuance of other relevant guidelines are done by the holding company. In view of the above discussion and in view of section 194J r.w.s. 9(1) and Board s Circular the payment made by the appellant is that of payment for technical services. The assessee was required to deduct tax from the payment of Rs. 12,00,000/- to SILK which attracts the provision of sec. 40(a)(ia) . 9. We a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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