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2016 (10) TMI 409 - ITAT MUMBAI

2016 (10) TMI 409 - ITAT MUMBAI - TM - TDS liability w/o taking into consideration the service tax - Held that:- Having considered the facts of the case and system of accounting followed by the assessee we find that the assessee has rightly deduced TDS on payment basis without taking into consideration the service tax and the AO, in our opinion, was not correct in applying deemed service tax on the payment made. Similarly, the ld.CIT(A) has also erred in holding that the TDS was deductible on th .....

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p. Urvi Deshmukh for the purpose of telecasting short film on Doordarshan on Air Pollution and Noise Pollution on ETV and Sub-TV at the time of Deewali. The ld. AR submitted that the payment was made for telecasting short film on Doordarshan and no TDS was required to be deducted at all and prayed that the order of the ld.CIT(A) be set aside on this issue and the ground raised by the assessee be allowed by allowing the appeal of the assessee. On the contrary, the ld.DR heavily relied on the orde .....

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that the interest was not to be charged from the beginning of the financial year the argument of the ld.AR that the same was to be charged from the date of assessment year is not convincing. It has been clearly provided in the section that interest has to be calculated from the date on which the TDS is deductible to the date of actual payment of such TDS. But in the instant case, the ld. CIT(A) has held that the interest be calculated up to the date of filing of return by the deductee. In our o .....

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ccount of AMC of mobile monitoring vans - Held that:- We find that the said repair services rendered by M/s Chemtrol Engineers Ltd are not technical as it is a AMC contract for maintenance of machines.Therefore we are not in agreement with the view of the ld.CIT(A) on this issue that AMC is a technical service and liable to TDS u/s 194 of the Act . There is merit in the submissions of the ld.AR that the payment made to M/s Chemtrol Engineers Ltd are covered by the provision of section 194C which .....

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2 to 864/Mum/2014, I.T.A. No.902 to 906/Mum/2014 - Dated:- 25-8-2016 - SHRI SHAILENDRA KUMAR YADAV, JM AND SHRI RAJESH KUMAR, AM For The Revenue : Shri G N Makwana For The Respondent : S/Shri Jeevraj P Jain and Bipin J Jain Per RAJESH KUMAR, Accountant Member: These are Nine appeals filed by the respective parties. Appeals bearing ITA Nos. 862 to 864/Mum/2014 for the Assessment Years : 2007-08 to 2009-10 filed by the revenue and are directed against the three separate orders passed by ld.CIT(A)- .....

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the appeal in ITA Nos. 862 to 864/Mum/2014 relating to the assessment year 2007-08 to 2009-10 2. We find from the orders of authorities below that the tax effect involved in the above referred cases is below the monetary limit (Rs. 10,00,000/-) prescribed by the Central Board of Director Taxes(CBDT), vide its Circular No.21/2015(F.No.l42/2007-ITJ (Pt.) dated 10th December, 2015. 3. Shri Jeevraj P Jain and Bipin J Jain Shah appeared on behalf of the assessee. The Departmental Representative (DR) .....

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ded by Assessing Officer. Appellant prays that since Appellant maintain accounts on payment basis, hence question of T.DS on deemed service tax do not arise and Appellant prays for deletion of same 2. Learned CIT(A) 13 erred in directing Assessing Officer to delete T.D.5. liability on Deemed Service Tax after verifying bill that no service tax is charged in bill of M/s Concept Creator Appellant prays that Appellant follows cash (payment) system of Accounting hence there is no question of T.D.S. .....

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t made to Urvi Communication for telecasting short film on Air pollution and Noise Pollution for benefit of public in General and not for individual benefit hence not liable to TDS. Appellant prays for deletion of Demand u/s 194C _ 5. Learned CIT (A) 13 erred in not giving speaking order for charging Interest u/s 201 up to date of order even though proof of filing Return were submitted to Assessing Officer. Appellant prays that Interest is chargeable up to date of filing Return by deductee where .....

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ation application u/s 154 of the Act by which it was submitted that there some apparent mistakes ex-facie in the order passed u/s 201(1)/201(1A) of the Act, which were required to be rectified and accordingly, the order u/s 154 of the Act passed by the AO on 22.3.2012 rectifying the mistakes by which tax demand was reduced to ₹ 3,56,394/-. 6. Ground Nos.1,2 and 3 raised by the assessee are against the confirmation of demand raised on account of non deduction of tax at source by disregardin .....

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imposable on the said payments and accordingly calculated the short in fall TDS resulting from not considering the amount of service tax part on the said payment into account. Aggrieved by the order of the AO, the assessee carried the matter before the ld.CIT(A) who allowed the appeal of the assessee for statistical purposes by observing and holding as under : 4.2 Thus, appellant has submitted that the TDS liability reflected by AO is only on account of deemed service tax, as no service tax was .....

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bill raised by M/s. Concept Creators and having satisfied himself that no service tax was charged as claimed by the appellant to delete the demand of TDS liability. Accordingly this ground no.2 is treated as allowed for statistical purpose. Still aggrieved by the order of ld.CIT(A), the assessee is in appeal before us. 7. We have carefully considered the rival contentions of the parties, perused the material placed before us including the orders of authorities below. We find that the AO has rai .....

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ucted TDS on the payment made to these parties and therefore the ld. CIT(A) was wrong in setting aside and issuing directions to the AO that in case, the services tax was not charged in the bills to whom the payments were made only in that case delete the demand raised . The ld. AR vehemently submitted that the charging of service tax by the party in the bill was immaterial as the assessee has made the payment to these parties only of the amount which was before service tax and rightly deducted .....

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applying deemed service tax on the payment made. Similarly, the ld.CIT(A) has also erred in holding that the TDS was deductible on the service tax component if charged in the bills not otherwise. In our opinion, no TDS is required to be deducted as the assessee was following cash system of account and accordingly, grounds no.1,2 and 3 are allowed in favour of the assessee. The AO is directed to delete the demand raised against the assessee. 9. The issue raised in ground no.4. is against the conf .....

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e assessee has not deducted TDS u/s 194J of the Act on these payments as required to be deducted for rendering the technical services and accordingly raised the demand for non TDS u/s 194J. Aggrieved by the order of AO, the assessee carried the matter before the ld.CIT(A), who partly allowed the appeal of the assessee by accepting the alternative plea that the deduction was required to be made u/s 194C of the Act and not under section 194J of the Act as no technical services were rendered by the .....

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educted at all and prayed that the order of the ld.CIT(A) be set aside on this issue and the ground raised by the assessee be allowed by allowing the appeal of the assessee. On the contrary, the ld.DR heavily relied on the orders of authorities below. We find that the payment is made through intermediary for further making payment to Doordarshan and therefore we are in agreement with the findings recorded by the ld. CIT(A) that the payment made to these parties were of the nature of contractual .....

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ssessee the same should have been charged from 1.4.2005 to the date of furnishing the return by the deductees. The ld. AR also submitted that the proofs of filing were filed before the AO which were totally ignored and interest was charged for a period of 84 months. During the appellate proceedings before the ld.CIT(A) directed the AO to charge interest up to the date of filing of the return of income of the deductees by considering the various proof and details filed by the assessee by observin .....

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n submitted by the ld. AR that the interest has been charged from 1.4.2004 i.e. from the first day of financial year to 31.3.2011 which was modified by the ld. CIT(A) to the date of filing of the return of income of deductees. The grievance of the assessee is that the ld.CIT(A) has not passed speaking order as to the starting date of charging of interest. We have perused the provisions of section 201(1) and 201(1A) of the Act which provide that interest has to be charged where a person fails to .....

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ub-section does not deduct the whole or any part of the tax or after deducting fails to pay the tax as required by or under this Act, he or it shall be liable to pay simple interest,- (i) at one per cent for every month or part of a month on the amount of such tax from the date on which such tax was deductible to the date on which such tax is deducted; and (ii) at one and one-half per cent for every month or part of a month on the amount of such tax from the date on which such tax was deducted t .....

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irst proviso to sub-section (1), the interest under clause (i) shall be payable from the date on which such tax was deductible to the date of furnishing of return of income by such resident.] After going through the provisions of section 201(1A), we find some merit in the argument of the ld. AR that the interest was not to be charged from the beginning of the financial year the argument of the ld.AR that the same was to be charged from the date of assessment year is not convincing. It has been c .....

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te on which the TDS was deductible to the date of filing of return of income of the deductees. The order of the ld.CIT(A) is set aside and the AO is directed accordingly. The ground taken by the assessee is partly allowed. Now, we shall take the appeal bearing ITA No.903/Mum/2014 relating to assessment year 2006-07. 14. Grounds of appeal taken by the assessee are read as under : 1. Learned CIT(A) 13 erred in not giving speaking order with regards to calculating T.D.S. Demand on Deemed Service Ta .....

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ied u/s 194J as payments are for purchase of instruments not liable to T.D.S. 3. Learned CIT{A} 13 erred in not discussing and not passing specific speaking order for Advance payment made to Abhinav Natyadham Pratisthan of ₹ 200000/- and creating TDS Demand of ₹ 11320/- u/s 194J for payment on account of Grant for making documentary film for public awareness. Appellant prays to delete Demand of ₹ 11320/- as such payments are not liable to TDS being Grant. 4. Learned CIT{A} 13 e .....

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TDS Demand of ₹ 2768/- u/s 194J on such payment for Goads not liable to T.D.S. 6. Learned CIT (A) 13 erred in not giving speaking order for charging Interest u/s 201 up to date of order even though proof of filing Return were submitted to Assessing Officer. Appellant prays that Interest is chargeable up to date of filing Return by deductee where proof of filing Return by deductee are submitted. 7. Appellant prays to Add, Amend, substitute above Grounds of Appeal on or before date of hearin .....

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passed by the ld.CIT(A) on payment made to Envirotech Instruments Pvt. Ltd. amount to ₹ 4,44,840/- for purchase of instruments, where CST is charged in bill and the assessee challenged the levy of TDS u/s 194J on the ground that the purchase of instruments were made from the said party. During the course of survey, the AO noted that the assessee has made payments to Envirotech Instruments Pvt. Ltd. amounting to ₹ 4,44,840/-and the assessee has not deducted TDS u/s 194J on an amount .....

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ore the AO. The ld. AR submitted before us that out of the three bills of the said parties two bills pertinent to supply of machines and third one related to payment of advance amounting to ₹ 44480/- and submitted that this was for sale of goods to the assessee which was supported by the bills and vouchers of the sale and therefore the TDS was not required to be deducted. After perusing the order of ld.CIT(A) ,we find that the FAA has not given any specific findings on this issue. Therefor .....

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m Pratisthan as grant of ₹ 2,00,000/- for making documentary firms doe public awareness, whereas the AO has held that same was liable for TDS u/s 194J and accordingly raised a demand of ₹ 11320/-. 19. The facts of the case are that the assessee being a government body is engaged in carrying out the work of Air, Water and Noise pollution control on its own and also by giving financial assistances to NGOs and another organizations who are carrying such type of work. The AO was of the o .....

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, the payments in the form of assistances or grant in aid assessee is not liable to deduct TDS as the same is not rendering any technical services and it is just financial assistance for carrying out such type of work in the public interest. In our opinion, such type of payment is not liable to TDS and therefore, we direct to delete the demand raised. Ground taken by the assessee is allowed. 20. The issue raised in the ground of appeal No.4 is similar to the issue as decided in grounds of appeal .....

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s liable for TDS u/s 194J thereby raising demand of ₹ 2768/- u/s 194J. 22. We find that the ld.CIT(A) has not passed a speaking order on this issue, therefore, we are of view that it would meet ends of justice if the issue is restored to the file of ld. CIT(A) for passing speaking order after considering the facts and documents as submitted by the assessee during the re-appellate proceedings as per law. The issue is set aside to the file of ld.CIT(A). This ground is allowed for statistical .....

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r : 1. Learned CIT(A) 13 erred in not giving speaking order with regards to calculating T.D.S. Demand on Deemed Service Tax added by Assessing Officer. Appellant prays that since Appellant maintain accounts on payment basis, hence question of T.DS on deemed service tax do not arise and Appellant prays for deletion of same 2. Learned CIT{A} 13 erred in confirming deduction of TDS u/s 194J instead of u/s 194C for payment made to Chemtrol Engineers Ltd on account of AMC of mobile monitoring vans an .....

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raised in the ground of appeal No.1 is similar to the issue raised in ground No.1,2 and 3 of appeal in ITA No.902/Mum/2014 which we have decided in favour of the assessee in this order in paras 7 and 8, and therefore, our decision in ITA No.902/Mum/2014 would ,mutatis mutandis, would apply to this ground as well. The AO is directed accordingly. 26. The issue raised in the ground of appeal No.2 is against the confirmation of TDS paid u/s 194J instead of section 194C for payment made to Chemtrol .....

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. CIT(A) also upheld action of the AO. 27. After considering the rival submissions and perusal of the record, we find that the said repair services rendered by M/s Chemtrol Engineers Ltd are not technical as it is a AMC contract for maintenance of machines.Therefore we are not in agreement with the view of the ld.CIT(A) on this issue that AMC is a technical service and liable to TDS u/s 194 of the Act . There is merit in the submissions of the ld.AR that the payment made to M/s Chemtrol Engineer .....

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d accordingly and this ground is allowed. 28. In the third ground of appeal, the assessee has raised the issue regarding non passing of speaking order for charging interest u/s 201 up to date of order even though proof of filing return were submitted to AO. 29. An identical issue has been raised by the assessee in ITA No.902/Mum/2014 in ground no.5 and therefore, our decision in ITA No.902/Mum/2014 would ,mutatis mutandis, apply to this ground as well. The AO is directed accordingly. This ground .....

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IT(A)13 erred in directly Assessing Officer to delete on Deemed Service Tax after verifying bill that no service tax is charged in bill of M/s. ARK Designs Pvt. Ltd.Appellant prays that Appellant follows payment (cash) system of Accounts hence there is no question of T.D.S. on Deemed Service Tax. Appellant prays deletion of same. 3. Learned CIT(A) 13 erred in not giving speaking order with regard to Advances of ₹ 23420984/- given to M/s. Ashtech lnfotech Pvt. Ltd. for IMIS Project Implemen .....

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furniture & fixtures cess fund for infrastructure for Housing New equipment etc. being liable to T.D.S. u/s 194C Appellant deducted and paid taxes u/s 194C.Appellant prays to delete Demand of ₹ 792824/-. 5. Learned CIT(A) 13 erred in not discussing and not giving speaking order with regard to Advance payment of ₹ 374018l- to La Plume Services and calculating TDS Demand of ₹ 35519/- u/s 194 J Appellant prays that Advances are for Annual maintenance contract for service and .....

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3.01.2007 Abudhabi Exhibition stall Booking 579240 Booking Amt. for stall booking c 1.3.2007 Shivaji University 84833 Financial assistance for punch Ganga river report d 26.3.2007 B.B.Nimarte for CRISIL Adv 622400 Payment to staff for CRISIL Appellant prays that since payment do not relate to year in Appeal and pertains to earlier year, Appellant prays for deletion of TDS Demand of ₹ 202407/- on above advances u/s 194J. 7. Learned CIT(A) 13 erred in not discussing and not passing speaking .....

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an Pradhikaran work and calculated TDS Demand of ₹ 331171/- u/s 194J. Appellant prays to delete Demand of ₹ 331171/- as Advance payment are for Financial Assistance for Affluent Treatment Plant, not liable to T.D.S. 9. Ld.CIT(A) 13 erred in not discussing and not passing speaking order with regard to Advance payment of ₹ 260000/- to SRO Solapur and calculated TDS Demand of ₹ 29458/- u/s 194J. Appellant prays to delete Demand of ₹ 29458/- as Advances are given to sub .....

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on in ITA No.902/Mum/2014 mutatis would mutandis apply to this ground as well. The AO is directed accordingly. 32. Ground No.4 is in respect of non-passing of speaking order by the ld. CIT(A). We find that the ld.CIT(A) has not passed a speaking order on this issue, therefore, we are of the considered opinion, it would meet ends of justice if the issue is restored to the file of ld. CIT(A) for passing speaking order after considering the documents as submitted by the assessee as per law and fact .....

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not passed any speaking order on these issue, therefore we restore these grounds to the file of ld.CIT(A) for passing speaking order after giving fresh opportunity of hearing to the assessee. These grounds are allowed for statistical purposes. 35. With regard to the ground No.10, identical issue has been decided by us in ground no.5 in ITA No.902/Mum/2014 vide para 13 of this order and therefore, our decision in ITA No.902/Mum/2014 would mutatis mutandis apply to this ground as well. The AO is d .....

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. Learned CIT(A) 13 erred in directing Assessing Officer to delete T.D.5. liability on Deemed Service Tax after verifying bill that no service tax is charged in bill of M/s ARK Designs Pvt.Ltd. Appellant prays that Appellant follows cash (payment) system of Accounting hence there is no question of T.D.S. on Deemed service tax. Appellant prays for deleting same. 3. Learned CIT(A) 13 erred in not giving speaking order with regard to Advances of ₹ 6377316/- given to M/s. Ashtech Infotech Pvt. .....

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are against composite contract for furniture & fixtures (cess fund) for infrastructure for housing new equipment and furnishing work being liable to TDS u/s 194C and tax deducted u/s 194C Appellant prays to delete demand of ₹ 288021/-. 5. Learned CIT(A) 13 erred in not discussing and not giving speaking order with regard to Advance payment of ₹ 3501704/- given to Concept Creator and calculating TDSDemand of ₹ 304444/- u/s 194J. Appellant prays that Advance are against comp .....

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contract of furniture & fixtures cess fund for infrastructure for Housing new equipment etc. being liable to T.D.S. u/s 194C Appellant prays to delete Demand of ₹ 250368/- 7. Learned ClT(A} 13 erred in not discussing and not giving speaking order with regard to Advance payment of ₹ 75000/- given to Green C GIS and calculated TDS Demand of ₹ 8498/- u/s 194J. Appellant prays that Advances are as Financial Assistant for preparation of Dist. Environment ATLAS etc. for Industria .....

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