TMI Blog2017 (1) TMI 664X X X X Extracts X X X X X X X X Extracts X X X X ..... - Shri Joginder Singh, Judicial Member And Shri Ramit Kochar, Accountant Member Revenue by : Shri Neil Philip Assessee by : Shri Amit Khatiwala ORDER Per Ramit Kochar, Accountant Member This appeal, filed by the Revenue, being ITA No. 5776/Mum/2014, is directed against the appellate order dated 4th July, 2014 passed by learned Commissioner of Income Tax (Appeals)- 14, Mumbai (hereinafter called the CIT(A) ), for the assessment year 2011-12, the appellate proceedings before the learned CIT(A) arising from the order dated 25th March, 2013 passed by the learned Assessing Officer (hereinafter called the AO ) u/s 201(1)/201(1A) of the Income-tax Act,1961 (Hereinafter called the Act ). 2. The grounds of appeal raised by the Revenue in the memo of appeal filed with the Income-tax Appellate Tribunal, Mumbai (hereinafter called the Tribunal ) read as under:- (i) On the facts and circumstances of the case and in law, the Ld.CIT(A) erred in deleting the demand raised u/s.201(1)/201(1A) of the Act in respect of payments made to M/s. Pravin Electricals Pvt. Ltd.' holding that the agreement of the assessee with M/s. Pravin Electricals Pvt. Ltd. is not i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the services in respect of electrical installation and AMC thereof , hence fall under the provisions of section 194C of the Act, failing to appreciate that the said company has provided services for comprehensive annual maintenance of the lifts/elevators along with the lobby vision (CCTV) services for security and the specialized elevators/lifts of the company are maintained and monitored by the technically skilled personnel of the company providing technical and professional services, therefore, TDS ought to have been deducted u/s 194J of the Act as against section 194C of the Act. 3. The Brief facts of the case are that the assessee is a leading hospital engaged in the activity of providing healthcare services and doing medical research. The hospital is managed by Mandke Foundation. In the case of Mandke Foundation, a survey action u/s 133A of the Act was conducted at the premises of the assessee at Plot No. 1, Survey No.141, RaoAchutarao Patvardhan Marg, Four Bungalow, Andheri(West),Mumbai-400058 on 4th October, 2010 with respect to the verification of proper TDS compliance by the assessee-deductor. During the course of proceedings u/s. 201/201(1A) of the Act, the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee comprises of supply, installation, testing and commissioning of electrical works which included unloading, storing, shifting, installation, testing and commissioning of 2500 KVA capacity 11/0.415, indoor type step down copper wound case resin dry type delts/star transformer (percentage impedance shall be strictly 7.25%) complete as per specifications including bidirectional rollers, diagram rating plates with control wiring upto HT panel, Lifting lugs, etc as per specifications and accessories as required. - Providing lighting protection systems. - Unloading, storing, shifting, handling, installation, testing and commissions of external/ landscape light fixtures with tabular 50mm dia GI straight pole of overall length 3.7 meters (3 Meters above ground) with bas plate and following accessories. - Unloading, storing, shifting, handling, installing, testing and commissioning of Garden light /Bollard Light fixture louvered 'type similar to Philips Fgc lOO in the colour as approved by architect with 9 W PL - 9 Lamp complete (for landscape lighting) (Supply of lighting fixture with. lamps by client) or equivalent. The A.O. thus observed that services r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces in the nature of Comprehensive Annual Maintenance of HVAC, Cold Rooms, UVC emitters. The services rendered were in respect of high efficiency' and specialized electrical equipment for cooling of the premises and such specialized services cannot be accomplished without involvement of professional caliber and merit, hence, the payments/expenses had to be subjected to TDS under section 194J of the Act. Similarly with respect to payment made by the assessee to M/s Lift Schindler India P Ltd., it was observed by the AO that the said concern provided services of ₹ 29,68,915/- to the assessee during the year under consideration , on which the assessee has deducted tax at source @ 2% u/s 194C of the Act treating the said payments as work/contract. The nature of services rendered by the party were mentioned as maintenance of lift and AMC for Lobby Vision with one monitor and cable. The A.O. observed that M/s Lift Schindler India P Ltd. is a well established world renowned company in the field of erection/installation of specialized elevators and lifts and the said company had provided services for comprehensive annual maintenance of the lifts/elevators along with the lobby ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Schindler 2,36,876 85,275 3,22,151 Total 17,08,967 6,15,227 23,24,194 4. Aggrieved by the orders dated 25.03.2013 passed by the AO u/s 201/201(1A) of the Act , the assessee filed first appeal before the ld. CIT(A). 5. The ld. CIT(A) considered the submissions of the assessee and allowed the claim of the assessee by following his predecessor s order in assessee s own case for the assessment year 2010-11 , which is reproduced hereunder:- Pravin Electricals Pvt. Ltd. In view of above discussion therefore and respectfully following the above two decisions of Hon ble Tribunal, I hold that the expenditure on account of Electrical installations and Annual Maintenance Contracts (AMC) thereof is not in the nature of professional or technical services as construed under the provisions of Section 194J of the Act and hence provisions of Section 194J of the Act are not applicable. The appellant has correctly deducted TDS under section 194C of the Act in respect of these payments. Therefore, there was no addition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntract' and the tax deduction at source in respect thereof has been correctly made under section 194C of the Act. Blue Star Ltd. I have considered the above submissions of the appellant and agree with the same. The nature of services, rendered by M/s Blue Star Ltd in respect of HVAC Work are similar to services in respect of electrical installations and AMC thereof (as discussed above in Ground No. 1). Hence, the same shall fall under the provisions of section 194C for the purposes of tax deduction at source. It has to be noted that in the process of rendering these services, neither any technical information is provided by the vendor; nor any technical knowledge, design etc is imparted while performing such activities. Hence, circular No. 681 doted 08. 03.1994 and Circular No. 715 dated 08.08.1995 issued by the CBDT, both, will apply to the payments under consideration. In view of above discussion therefore, I hold that the expenses in respect of supply, installation, maintenance, testing and commissioning of HVAC work incurred by the appellant are in the nature of payments towards a 'work contract' and the tax deduction at source in respect thereof ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar whereby the ld. CIT(A) allowed the appeal of the assessee by holding as under:- Pravin Electricals Pvt. Ltd. In view of above discussion therefore and respectfully following the above two decisions of Hon ble Tribunal, I hold that the expenditure on account of Electrical installations and Annual Maintenance Contracts (AMC) thereof is not in the nature of professional or technical services as construed under the provisions of Section 194J of the Act and hence provisions of Section 194J of the Act are not applicable. The appellant has correctly deducted TDS under section 194C of the Act in respect of these payments. Therefore, there was no additional liability of TDS in regard to these payments. Therefore, there will also not be any liability of interest u/s 201 (IA) of the Act. Brandtherapist I have considered the above submissions of the appellant and agree with the same. The advertisement contracts directly fall under the provisions of Section 194C for the purposes of tax deduction at source. It has to be noted that in the process of rendering these services, neither any technical information is provided by the vendor; nor any technical knowledge, design e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It has to be noted that in the process of rendering these services, neither any technical information is provided by the vendor; nor any technical knowledge, design etc is imparted while performing such activities. Hence, circular No. 681 doted 08. 03.1994 and Circular No. 715 dated 08.08.1995 issued by the CBDT, both, will apply to the payments under consideration. In view of above discussion therefore, I hold that the expenses in respect of supply, installation, maintenance, testing and commissioning of HVAC work incurred by the appellant are in the nature of payments towards a 'work contract' and the tax deduction at source in respect thereof has been correctly made under section 194C of the Act. Lift Schindler I have considered the above submissions of the appellant and agree with the same. The nature of services rendered by Lift Schindler India Pvt. Ltd. are similar to the services in respect of electrical installations and AMC thereof (as discussed above in Ground No 1). Hence, the same shall fall under the provisions of section 194C for the purposes of tax deduction at source. It has to be noted that in the process of rendering these services, neither ..... X X X X Extracts X X X X X X X X Extracts X X X X
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