Subscription   Feedback   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Articles Highlights TMI Notes SMS News Newsletters Calendar Imp. Links Database Experts Contact us More....
Extracts
Home List
← Previous Next →

THE COMMISSIONER OF INCOME TAX, TDS, BANGALORE AND THE INCOME TAX OFFICER, TDS WARD, HUBLI Versus HUBLI IELECTRIC SUPPLY COMPANY LTD.

TDS u/s 194J - Tribunal held that Section 194J not applicable on payment of transmission charges to KPTCL - Held that:- The contents of the power transmission agreement there is no mention of any offer with regard to any "technical services" by the KPTCL. Plain and simple intention of the parties to the agreement as discernable from the power transmission agreement is that the assessee was desirous of using the transmission network belonging to the KPTCL in accordance with the provisions of the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e. Assessee is also a State owned electricity distribution company. The only service which the assessee has availed from the KPTCL is "transmission of power" on payment of charges fixed by KERC. No material is placed by the Revenue before this Court to substantiate its contention that assessee had availed of any technical services. In our considered view, assessee has done nothing more than transmitting certain quantum of power from one place to the other for a price fixed by KERC. Assessee was .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

loss of Revenue is not subject matter of these appeals, we have adverted to the same as payment of tax by the payee has the effect of rendering these appeals purely academic. - Decided against revenue. - IT APPEAL NOS. 439, 440, 442, 444, 445, 446, 449, 450, 451, 452, 453, 455, 456, 458, 460 & OF 2012 - Dated:- 15-12-2015 - MR. S.ABDUL NAZEER AND MR. P.S. DINESH KUMAR, JJ. FOR THE APPELLANT : SRI. Y.V. RAVIRAJ AND SRI. K.V. ARAVIND, ADVS. FOR THE RESPONDENT : SRI. S. PARTHASARATHI, SRI MALAHARA .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

g/2011 2008-09 10. 451/2012 900/Bang/2011 2007-08 11. 452/2012 899/Bang/2011 2010-11 12. 453/2012 898/Bang/2011 2009-10 13. 455/2012 897/Bang/2011 2008-09 14. 456/2012 896/Bang/2011 2007-08 15 458/2012 913/Bang/2012 2009-10 16. 460/2012 912/Bang/2012 2008-09 17. 465/2012 911/Bang/2012 2007-08 2. All the above appeals were admitted to consider the following common substantial question of law: "Whether the Tribunal is justified in holding that Section 194J of the Act is not applicable to the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

purchases electricity from State owned generators like Karnataka Power Corporation Limited (KPCL), National Thermal Corporation (NTC) and the like ones as also from private generators like Jindal Energy Limited. Power is transmitted from the generation point to the consumers through the transmission network of the Karnataka Power Transport Corporation Limited (KPTCL) in terms of an agreement dated 08.05.2012 which has a term of 25 years there from. (ii) During the survey conducted by the Revenue .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

he assessment year 2006-07 to 2009-10 held that the assessee was in default under Section 201(1) of the Act and levied interest of ₹ 65,18,10,369/- under Section 201(1A) both in respect of payments made towards transmission charges and 'SLDC charges'. Orders passed by the Assessing Authority were challenged before the Commissioner of the Income Tax (Appeals). (iii) During the hearing, the assessee had brought to the notice of the Commissioner of Income Tax (Appeals) that the payee .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the payee. Accordingly, the appeals were allowed in part and the ITO (PDS) was directed to afford an opportunity to the assessee to furnish proof of payment of taxes by the payees and thereafter work out interest under Section 201(1A) of the Act from the date of remittance of TDS till the date of filing of the return by the payee in each case. (iv) The orders passed by the Commissioner (Appeals) were challenged by both the assessee as well as Revenue before the Income Tax Appellate Tribunal (ITA .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ese appeals raising questions of law mentioned supra. 5. Learned counsel for the Revenue urged the following grounds in support of these appeals. (i) Admittedly, KPTCL is a transmission company and power generated at the generating stations is transmitted through its transmission network; (ii) KPTCL collects transmission charges and SLDC charges for transmission of power. (iii) In terms of Section 39 of the Electricity Act, 2003 it undertakes transmission of electricity through intra-state trans .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ations, keep accounts of quantity of electricity transmitted through the State Grid, exercise supervision and control over intra-state transmission system and carry out real time operations for grid control and dispatch of electricity within the State through secured operation as per grid standards and State Grid Code; (v) The aforementioned functions of KPTCL and SLDC clearly establish that KPTCL extends "technical services" to the assessee while transmitting power under the aforement .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

yed for answering the substantial question of law in favour of the Revenue by allowing these appeals. 6. On the other hand, Shri Parthasarthi, learned counsel for the assessee supporting the judgment of the Tribunal, contended that there is no error in the impugned orders passed by the ITAT, giving rise to any question of law much less a substantial question of law arising out of the said orders. Reiterating the grounds of appeals urged on behalf of the assessee before the Commissioner (Appeals) .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

in the power transmission service. Thus, assessee is compelled to seek the services of KPTCL and at any rate, assessee does not avail any "technical service" from the KPTCL. In the premise, Section 194J is not applicable to the facts of the case. As a supplemental argument, he contended that in any event the income earned has been offered to tax by the payee namely, the KPTCL and therefore, the Commissioner (Appeals) has rightly held that the case on hand is fully covered by the ratio .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

counsel for the Revenue and the assessee. Revenue is aggrieved by the decision of the ITAT holding that compliance of Sec 194J mandating deduction of tax at source are not attracted to the facts of these cases and the assessee was not liable to deduct tax at source on payment of transmission charges to KPTCL. 'Sec. 194J reads as follows: 194J. (1) Any person, not being an individual or a Hindu undivided family, who is responsible for paying to a resident any sum by way of- (a) fees for profe .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

amount equal to 29[ten] per cent of such sum as income-tax on income comprised therein : Provided that no deduction shall be made under this section- (A) from any sums as aforesaid credited or paid29a before the 1st day of July, 1995; or (B) where the amount of such sum or, as the case may be, the aggregate of the amounts of such sums credited or paid or likely to be credited or paid during the financial year by the aforesaid person to the account of, or to, the payee, does not exceed- (i) 30[t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

he business or profession carried on by him exceed the monetary limits specified under clause (a) or clause (b) of section 44AB during the financial year immediately preceding the financial year in which such sum by way of fees for professional services or technical services is credited or paid, shall be liable to deduct income-tax under this section :] 34[Provided also that no individual or a Hindu undivided family referred to in the second proviso shall be liable to deduct income-tax on the su .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ng or such other profession as is notified by the Board for the purposes of section 44AA or of this section; (b) "fees for technical services" shall have the same meaning as in Explanation 2 to clause (vii) of sub-section (1) of section 9; 37[(ba) "royalty" shall have the same meaning as in Explanation 2 to clause (vi) of sub-section (1) of section 9;] (c) where any sum referred to in sub-section (1) is credited to any account, whether called "suspense account" or b .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

es if any from the KPTCL. Thus, in order to answer the question of law raised by the Revenue, it is imperative to examine as to whether assessee had availed any technical services from KPTCL. 8. Irrefutable facts in these cases are KPTCL and assessee have entered into a power transmission agreement dated 08.05.2012. Under the said agreement, KPTCL has agreed with the assessee to provide its transmission network for the purpose of carrying electricity to its users. For the said purpose, KPTCL has .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

r KERC (Terms and Conditions of Tariff) Regulations, 2006. 10. KPTCL is required to maintain the operation and maintenance of the transmission system. 11. Transmission charges are calculated as per transmission tariff determined by KERC and KPTCL is required to raise bills on every first working day of every month and the assessee has undertaken to pay transmission charges in terms of the said bills. 12. We have carefully perused the contents of the power transmission agreement. There is no ment .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

to its users subject to payment of transmission and other charges as determined by KERC. There is neither an offer nor an acceptance of any "technical service" inter se between the parties. Admittedly, KPTCL is a State owned Company and the only power transmitting agency. It has installed and developed its own infrastructure. Assessee is also a State owned electricity distribution company. The only service which the assessee has availed from the KPTCL is "transmission of power&quo .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

what is new what is new
  ↓     bird's eye view     ↓  


|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version