TMI Blog2012 (12) TMI 755X X X X Extracts X X X X X X X X Extracts X X X X ..... ising of the bill, which itself is in the second week of April, 2007 - in favour of assessee. Non deduction of TDS - technical services covered u/s. 194J – Held that:- With regard to the application of section 194J, i.e., qua technical services payment made to under-graduate students, undergoing three-year diploma in Ophthalmology, leading to the qualification of an Ophthalmology Assistant, paid during third (final) year of their course. The students are enrolled for the program after passing Class 12. It is only after the successful completion of this program that they would qualify as professionals, capable of rendering either professional or technical services. The same is only an allowance to an apprentice or an intern, rightly termed as a stipend, which is defined as a sum of money paid to the students for living expenses. As regards the balance payment (of Rs. 7,79,740/-) to the doctors undergoing post graduation, rather super-specialty courses, the same are highly technical courses, admission to which it is severely restricted and regulated, and only upon meeting high standards of professional competence prescribed for the purpose and is not covered under the provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the Act for the relevant year, is now in second appeal. The first ground assumed by the assessee challenges the sustenance of two disallowances on account of electricity expenses in the sum of Rs. 16,497/- and Rs. 70,000/-, as being illegal, unjustified and excessive. We shall take up both the disallowances separately, being separate and distinct, though clubbed together by the assessee per its Ground No.1. The disallowance for Rs. 16,497/- is in respect of electricity expense for an apartment in a building by the name `Heera Panna . The assessee claims that the apartment, belonging to a close relative, is being used as a conference room, i.e., for meeting the patients, etc. and, thus, being used only for his business/professional purposes. However, as the assessee could not evidence the said claim, disallowance for Rs. 76,900/-, representing 10% of total expenditure claimed on electricity (Rs.7.69 lacs), which approximated the electricity expenditure in respect of the said apartment, was made. In appeal, the disallowance stood restricted to Rs. 16, 497/-, on the assessee leading evidence to the effect that the actual expenditure qua the said apartment had been wrongly assumed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isen. This is as undisputedly all the bills in the present case stand raised only in the month of April, 2007. In fact, the amount does not become due for payment immediately on the raising of the bill, as certain time lag is necessary for its communication to the payer, besides allowance of certain time period for effecting the payment is also necessary. The due date, which represents the last date for payment, though not clarified, would only be subsequent to the raising of the bill, which itself is in the second week of April, 2007. The Revenue s case is that, being a contractual liability, the relevant date would be the due date of payment in terms of the contract, whereat only the liability can be said to have crystallized. In any case, it cannot be prior to the date of the raising of the relevant bill. In our view, the services having been availed, and valued only at the contracted rate, the corresponding liability has arisen. 6.2 True, the liability can not be said to have become payable by the year-end, which it in fact would only on the due date, before which the same cannot be enforced, in terms of the relevant contract itself. However, the question is not whether the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , therefore, succeeds. We decide accordingly. 7. The next issue, raised per Ground No. 4, is in respect of a disallowance in the sum of Rs. 11,42,678/- on account of non-deduction of tax at source on technical services covered u/s. 194J, i.e., by invoking the provision of section 40(a)(ia) of the Act. The brief facts in this regard are that the assessee is a proprietor of an opthomatical hospital research centre by the name `Sahai Hospital and Research Centre at Jaipur. The same is accredited by the National Board of Examinations, Ministry of Health and Family Welfare, Govt. of India, New Delhi, as an Institution for conducting various training courses leading to inter alia Diploma in Ophthamalic Techniques; DNB (Diplomate of National Board); House Officer in Ophthalmology. Stipend is paid to the students enrolled with the Institution. The same stands considered by the Revenue as being a fee for professional and technical services, liable for deduction of tax at source u/s. 194J of the Act. As no tax stood deducted thereon, the provision of section 40(a)(ia) was applied. 8. We have heard the parties, and perused the material on record. 8.1 The assessee's case is that the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rather, performed in the same manner, i.e., with the same degree of proficiency, as would be by the other resident or employed doctors of the Institute. So, however, the stipend paid to them cannot be regarded as a fee charged by them toward the services rendered by them; the same being a necessary part of their program, and which they are obliged to undertake for the successful completion of their course. It is only when what charged is by way of a `fee that the provision of section 194J would stand to be attracted. The payment to the doctors, irrespective of its nomenclature, which cannot be determinative though, would not thus qualify to be termed as a fee, which, by definition, is the amount that one pays or is to be paid to allow a person to do something. And, correspondingly, entitle the payer to a particular facility, viz. entrance fee, college fee, etc. Speaking in the context of the present case, it is rather the payment by the doctor-students, if any, to the Institute, for being allowed to undergo the academic and practical training, even if in pursuance to a recognized study program or professional course, that would qualify to be a fee. The payment allowed to the doct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , which can only be on the basis of some reliable evidences/ materials, which have been found missing in the present case, a part disallowance by the Revenue cannot be faulted with. The assessee has, apart from relying on case law, not substantiated its case in any manner. The matter, as would be apparent from the foregoing analysis, with the law in the matter being trite, is purely factual, i.e., whether the assessee has been able to prove its claim of having incurred the impugned expenditure and, further, only for the purposes of its business. The reliance on case law, de hors the facts, would thus be of little assistance. However, as no basis for quantification of the disallowance at 20% has been specified by the Revenue for us to ascertain the reasonability thereof, with no mention of the expenditure incurred in the past, we are inclined to restrict the same to 10%, as against 20% by the Revenue, which in our view would meet the ends of justice. We decide accordingly. 11. The last ground is against the sustenance of an addition in the sum of Rs. 5.03 lacs in respect of the discount allowed by the assessee, at Rs. 1 lac. The assessee s gross receipt of Rs. 201.21 lacs was foun ..... X X X X Extracts X X X X X X X X Extracts X X X X
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