TMI Blog2014 (1) TMI 895X X X X Extracts X X X X X X X X Extracts X X X X ..... eated as technical service and provision of section 194J would be attracted to the payment made to them by the assessee company. The decision Deputy Commissioner of Income-tax - 11(2) Versus Chandabhoy & Jassobhoy [2011 (7) TMI 956 - ITAT MUMBAI] and in APOLLO TYRES LTD Versus DEPUTY COMMISSIONER OF INCOME TAX CIRCLE-1(1), ERNAKULAM [2013 (11) TMI 209 - ITAT COCHIN] followed - short deduction of TDS, if any, could have been considered as liability under the Income-tax Act as due from the assessee – thus, the disallowance of the entire expenditure, whose genuineness was not doubted by the assessing officer is not justified - in case of short/lesser deduction of tax, the entire expenditure whose genuineness was not doubted by the AO, could ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iolation of TDS obligation u/s 194H.During the assessment proceedings AO found that the assessee had made payment of Commission /Brokerage to the extent of Rs. 69,09,863/- on which no tax had been deducted, as required under the provisions of section 194H of the Act. AO asked the assessee to explain as to why the amount of Commission / Brokerage should not be disallowed as no Tax has been deducted by way of TDS. After considering the submissions of the assessee AO held that any person who was responsible for paying to a resident any income by way of commission/brokerage had to deduct Income Tax there on that the assessee had made payment of commission of Rs. 69,09,863 to Citi Bank,HSBC and American Express Bank without deduction of TDS in v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 2.42 Crores paid by the assessee to DLC was essentially fees for technical services,that in the agreement word professional services contractual agreement had been mentioned.After discussing explanation 2 clause (vii) of sub-section 1 of section 9 of the Act, he held that technical services included any managerial/ techni -cal /consultancy services,that the DLC had provided the services of technical staff,that DEOs and COs were paid money by the assessee company that was in the nature of technical services,that provisions of section 194J(1) of the Act were applicable on the facts and circumstances of the case for deduction of TDS, that the argument of the assessee that TDS was required to be deducted u/s 194C of the Act was devoid of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act. He relied upon the order of the Kochin Bench delivered on 29.05.2013 in the case of Appolo Tyer Ltd.(ITA No9. 31/Koch/2010 AY 2006-07).Departmental Representative (DR) submitted that the agreement entered between the assessee and DLC was not for supplying labours, that DLC has rendered professional services to the assessee.She referred to Page No. 2 and 42 of the Paper Book.It was further submitted by the DR that the assessee had deducted TDS amounting to Rs. 6 lacs only,that it was not a case of short deduction of tax but a case where no tax was deducted at all. 2.3.We have heard the rival submissions and perused the material before us in case under consideration.An agreement was entered into between assessee and DLC and as per t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure, whose genuineness was not doubted by the assessing officer is not justified". Kochin Bench had also held that in case of short/lesser deduction of tax, the entire expenditure whose genuineness was not doubted by the AO, could not be disallowed. In our opinion, considering these orders, in the interest of justice, mater should be remitted back to the filed by the AO for fresh adjudication to decide the issue afresh.He is directed to afford reasonable opportunity of hearing to the assessee to decide the issue afresh,after considering the orders of Appolo Tyer Ltd. (supra) and Chanda Bhoy and Jasso Bhoy (supra). As a result,appeal filed by the assesee stands partly allowed. Order pronounced in the open court on 3rd July, 2013. - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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