TMI Blog2017 (10) TMI 98X X X X Extracts X X X X X X X X Extracts X X X X ..... . Such an arrangement arrived at between two entities cannot be said to be that of rendering professional services. No legal, medical, engineering, architectural consultancy, technical consultancy, accountancy, nature of interior decoration or development was to be rendered by HRTC. Similarly, no service, which can be termed to be technical service, was provided by HRTC to the development authority, so also no managerial, technical or consultancy services were provided. The arrangement was purely simple. The staff of HRTC was to carry out the work of development and management of the development authority till such time, the said authority developed its infrastructure and the expenditure so incurred by HRTC was to be apportioned on the agreed terms. It is only pursuant to such arrangement, the development authority disbursed the payment to HRTC and, as such, in our considered view, no amount of TDS was required to be deducted on the same. It is only a reimbursement of an expense so incurred by HRTC. - Decided in favour of assessee. - ITA No. 26/2015 with ITAs No. 27, 28 & 29 of 2015 - - - Dated:- 11-9-2017 - Sanjay Karol, ACJ And Ajay Mohan Goel, JJ. For the Appellant : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or technical consultancy or such other profession as is notified by the Board for the purposes of Section 44AA of Section 194J of the Act. Explanation 2 to clause (vii) of sub section (1) of Section 9 has been stated to mean the explanation for fees for technical services . Now when one examine the said clause, one finds fees for technical services to mean any consideration for rendering any managerial, technical or consultancy services, not to include consideration for any construction, assembly, mining or like projects undertaken by the recipient or consideration which would be income of the recipient chargeable under the head Salaries . 5. It is in this backdrop, we proceed to examine the factual matrix. 6. The Development Authority, an entity established for development and management of bus stands within the State of Himachal Pradesh, was established w.e.f. 01.04.2000. Prior thereto, such work was being carried out by HRTC itself. Since the development authority had no independent establishment and infrastructure of its own to carry out the objects, a decision was taken to have the same executed through the employees of HRTC. This arrangement was to continue till suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nger, it will deduct full tax and pay the same accordingly. If the assessee authority deduct the tax on account of salary to Divisional Manger then that would amount to double deduction of taxes of the salary of Divisional Manger which is not possible. The assessee is not paying lump sum charges to the HRTC which can be construed as service charge. It is only reimbursement of predetermined rates Therefore, we are of the opinion that no tax was required to be deducted u/s 194j. Accordingly, we set aside the order of the ld. CIT (A) and hold that no tax is deducible by the assessee authority. 5.1 Respectfully following the decision of the Hon ble ITAT in the assessee s own case (supra) and in order to keep up judicial consistency the addition made by the A.O. is not sustainable and the same is ordered to be deleted. The appellant succeeds on this ground of appeal for the assessment years 2009-10, 2010-11 2011-12. 10. The aforesaid view stands affirmed by the Income Tax Appellate Tribunal vide order dated 20.11.2014 (Annexure PA) in an appeal preferred by the revenue. 11. It is a matter of record that in an appeal assailing the order passed in proceeding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s correctly relied upon this Courts ruling in Industrial Engineering Projects Pvt. Ltd., (supra). A Division Bench of this Court in that case specifically held that reimbursement of expenses can, under no circumstances, be regarded as revenue receipt and therefore, it is not liable to income tax. The Court relied upon the Supreme Courts decision in CIT v. Tejaji Farasram Kharawalla Ltd., { 1968 } 67 ITR 95 (SC), where the Court had held that it is only the amount that exceeds the expenditure incurred by the agent that would be liable to tax. More recently, this Court in Fortis Health Care Ltd.(supra) has also held that amount received towards reimbursement of expenses is not taxable under the Act. 19. In the instant case, it is undisputed that M/s DLF Land Ltd. had deducted TDS on the payments made by it under various heads on behalf of the assessee. Further, it is also not disputed that the assessee deducted TDS on the service charge paid by it to M/s DLF Land Ltd. on the reimbursement expenses. In such circumstances, this Court holds that the entire amount paid by the assessee to M/s DLF Land Ltd. is entitled to deduction as expenditure. 20. In arriving at the afore ..... X X X X Extracts X X X X X X X X Extracts X X X X
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