TMI Blog2015 (12) TMI 1533X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 oblivious to the technical expertise which the KPTCL may possess. There was neither transfer of any technology nor any service attributable to a technical service offered by the KPTCL and accepted by the assessee. Therefore, application of Section 194J of the Act to the facts of this case by the Revenue is misconceived. - Decided against revenue - I.T.A. NO.437/2012 C/W I.T.A. NOS.439, 440, 442, 444, 445, 446, 449, 450, 451, 452, 453, 455, 456, 458, 460 & 465 OF 2012 - - - Dated:- 15-12-2015 - R. S. ABDUL NAZEER AND R.P.S. DINESH KUMAR, JJ For the Petitioner : RI. Y.V.RAVIRAJ SRI. K.V.ARAVIND, ADVS. For the Respondent : SRI. S. PARTHASARATHI, SRI. MALAHARA RAO, H.R.KAMBIYAVAR SRI. P.DINESH, ADVS. JUDGMENT Revenue has presented following appeals raising certain questions of law. Sl. Nos. ITA No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... HESCOM) is a State owned Company registered under the Companies Act and engaged in the business of buying and selling electricity. Assessee 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 in the premises of assessee under Section 133A of the Income Tax Act, 1961 ( Act for short), it was noticed that the assessee had made payments towards transmission charges to KPTCL; Power Grid Corporation of India Limited (PGCIL) and SLDC charges to State Load Dispatching Centre (SLDC) without deducting tax deductible at source under Section 194J of the Act. After issuing summons and following all procedure, the assessing authority vide separate orders dated 31.03.2011 for the assessment year 2006-07 to 2009-10 held that the assessee was in de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transmission of electricity through intra- state transmission system and ensures development of efficient, coordinated and economical system for smooth flow of electricity from generating station to the load centres. (iv) State Load Dispatching Centre is also an another arm of KPTCL and collects fixed rate from generating companies called as SLDC charges . SLDC is a statutory body and functions as per Section 32 of the Electricity Act. It is responsible for optimum scheduling and dispatch of electricity. It is required to monitor grid operations, 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 aforementioned power transmission agreement. Therefore, Commissioner (Appeals) fell in an error while coming to a conclusion that no demand could be visualized ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 professional services, or (b) fees for technical services 26 , 27 [or] 28 [(ba) any remuneration or fees or commission by whatever name called, other than those on which tax is deductible under section 192, to a director of a company, or] 27 [(c) royalty, or (d) any sum referred to in clause (va) of section 28,] shall, at the time of credit of such sum to the account of the payee or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier , deduct an amount equal to 29 [ten] per cent of such sum as income-tax on income comprised therein : that no deduction shall be made under this section- (A) from any sums as aforesaid credited or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to pay such sum, such crediting shall be deemed to be credit of such sum to the account of the payee and the provisions of this section shall apply accordingly In the instant cases, the above provision would come into play only when there is payment of fee for availing technical services. Compliance or otherwise of the above provision by the assessee entirely hinges upon the factual matrix with regard to availing of technical services 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 covenanted with assessee to fulfill the obligations contained in Article 2 of the agreement and to perform other obligations. Assessee has agreed to pay transmission charges on a monthly basis in terms of Article 8 of the agreement. Both parties have agreed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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