TMI Blog2016 (2) TMI 877X X X X Extracts X X X X X X X X Extracts X X X X ..... ss model cannot be held as contract payments and taking the logic further they cannot be held as payments on account of rendering of any professional or technical services as contemplated by Section 194J of the Act - Decided in favour of assessee - ITA No. 896/JP/2014 - - - Dated:- 27-1-2016 - SHRI T.R.MEENA, AM AND SHRI LALIET KUMAR, JM For The Assessee : Shri R.S. Singhvi (CA) and Shri P.D. Baid (CA) For The Revenue : Shri O.P. Bhateja (Addl.CIT) ORDER PER T.R. MEENA, A.M. This is an appeal filed by the assessee against the order dated 22/10/2014 of the learned C.I.T.(A)-III, Jaipur for A.Y. 2012-13. The effective grounds of appeal are as under:- 1(i) That in the facts and circumstances of the case, the order passed by the Learned Income Tax Officer, TDS-2, Jaipur (hereinafter referred as 'Assessing officer') and Commissioner of Income Tax (Appeals)-III, Jaipur is bad in law as well as in facts, for the grounds contained hereinafter and needs to be quashed. ii) That the learned Assessing officer has not followed Principal of Natural Justice and has passed a mechanical order and CIT (Appeals)-III in confirming the same, without consid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax (Appeals)-III, Jaipur has not considered the various Judgments of the Hon'ble High Courts and also the ratio of Hon'ble Supreme court in the case of Hindustan Coco-Cola Beverages Private Limited v CIT reported at (2007) 163 Taxman- 355 cited by the appellant and accordingly the appellant is not under any obligation to deduct TDS and hence order under appeal needs to quashed and necessary relief granted. However, the Assessing Officer has wrongly mentioned that full particulars/ details in support of assessee's claim in this connection were not provided by appellant, whereas no such details/papers in this connection were called for. (ii) The CIT (Appeals)-III has also erred in giving certain findings, which are not relevant to appellant's case and without giving an opportunity to appellant to distinguish its stand. (iii) Further the Learned CIT (Appeals)-III has erred in not giving any finding in respect of ground (Ground No. 5) as contained in grounds of appeal filed before CIT (Appeals)- III and which has now been referred in Ground 5 (i) above and hence the order also needs to be deleted on this ground. 6. That the appellant reserves the rig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DS U/s 194J @% Short deduction U/s 201(1) Interest U/s 201(1A) Total demand Share in RSCIT Course Fees ITGK s share in RS-CIT Course Fees 153061420 10 15306142 2544753 17850895 Share in course fees Centres Share 16017471 10 1601747 216035 1817782 Total 1,69,07,889 27,60,788 1,96,68,677 3. Being aggrieved by the order of the Assessing Officer, the assessee carried the matter before the ld CIT(A), who had confirmed the order of the ld Assessing Officer by observing as under:- 4.3 I have carefully considered the findings of the AO as also the submission of the appellant. The undisputed facts are that M/s RKCL has been incorporated with the main objective to develop a new educational framework to implement, supervise and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pleting education to the learners and that they were sharing the fees as per their agreed terms and conditions. It is also stated that both M/s ITGK and VMOU have not issued any bills or invoices on the RKCL and that accordingly it cannot said that any payment was made by M/s RKCL to ITGK s for rendering of any technical services. The appellant has also placed reliance on various case laws including decision of CIT(A), Alwar in appellant own case. However, on careful consideration of all these relevant facts, I find merit in the findings of the A.O. that such payments were on account of professional/technical services and TDS was to be deducted u/s 194J of IT Act. It may be noted that the whole of the initiative for imparting of such IT enabled education to the employees of Govt. of Rajasthan and other people have been taken by M/s RKCL i.e. appellant at the instance of Govt. of Rajasthan and undoubtedly M/s RKCL was the dominant player in such venture. It may also be noted that for M/s RKCL it was never a business model and in fact the objective was to promote the IT enabled educational pragramme and accordingly M/s RKCL assigned different work to different agencies i.e DLC, PSA, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this business model as per normal terms and conditions. However, in the case of the appellant there was never any such business model or the existing brand and the appellant has taken the services of other agencies for fulfilling the objective of computer education in the state of Rajasthan as per the mandate given by Govt. of Rajasthan. It may be mentioned that in the case of NIIT their computer programmes under the brand name NIIT was just like a saleable product and any interested party could purchase the same with certain conditions. But in the appellant case no such business brand or saleable product was in existence. In fact the objective and mandate in the case of the appellant was to enhance and improve the IT enabled education in the state of Rajasthan and for achievement of such object the appellant has taken professional and technical services of other agencies including ITGK s for which payments were made. Therefore, the facts of the case of NIIT altogether different with the facts of the appellant case. In this background, it cannot said that the three collaborators namely M/s RKCL, ITGK and VMOU have independently carried out their business responsibilities and share ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Total ₹ 2300/- He has further drawn our attention on assessee s case decided by this Bench in ITA No. 38 to 40/JP/2013 for A.Y. 2009-10 to 2011-12 vide order dated 13/2/2015 wherein identical issue has been considered by the Hon ble Bench and decided the appeal in favour of the assessee. Therefore, he prayed to reverse the order of the ld CIT(A). 5. At the outset, the ld DR has vehemently supported the order of the lower authorities and prayed to uphold the order of the ld CIT(A). 6. We have heard the rival contentions of both the parties and perused the material available on the record. The identical issue has been decided by the Coordinate Bench in assessee s own case for A.Y. 2009-10 to 2011-12 vide order dated 13/2/2015. The operative portion of the Coordinate Bench s order is reproduced as under:- 6. We have heard the rival contentions of both the parties and perused the material available on the record. The contents of the agreements referred to by the assessee, placed on the record, have not been disputed by the department. Thus, the uncontroverted fact which emerges from the record ..... X X X X Extracts X X X X X X X X Extracts X X X X
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