TMI Blog2018 (2) TMI 1522X X X X Extracts X X X X X X X X Extracts X X X X ..... in para 6.4.2, the same falls in the nature of work contract liable for deduction of tax u/s.194C. The detailed finding so recorded by CIT(A) has not been controverted by learned AR or by learned DR. Accordingly, we do not find any reason to interfere in the order of CIT(A). - ITA No.5690/Mum/2017 And CO No.275/Mum/2017 - - - Dated:- 19-2-2018 - SHRI R. C.SHARMA, AM For The Revenue : Shri Ram Tiwari For The Assessee : Shri Ishwar P Rathi ORDER PER R.C.SHARMA (A.M): This is an appeal filed by the Revenue and Cross Objection by assessee against the order of CIT(A)-59, Mumbai dated 14/06/2017 in the matter of order passed u/s.201(1) / 201(1A) of the IT Act. 2. The grounds taken by the Revenue reads as under:- On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the short deduction in respect of payments made towards Outsourcing expenses without appreciating the fact that the nature of services received by the assessee requires certain parameters of technical/managerial skill of highly qualified specialized competency and falls within the purview of sec 194J and not u/s 194C of the I.T.Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Quarters of F.Y. 2012-13, relevant to A.Y, 2013-14. In relation to the said year, notices u/s. 201(1) 201(1A) were issued and served on the assessee company. The learned AO passed an order u/s. 201(1)/ 201(1 A) dated 23-02-2015 in which he has worked out total tax payable of ₹ 50,41,752/-, treating the assessee in default for short deduction and also calculated interest thereon. AO held that for all these services, assessee should have deducted tax at source u/s.194J instead of 194C. 6. By the impugned order, CIT(A) after giving detailed findings treated some of the services are liable to deduction of tax u/s.194C, however in respect of some of the services he upheld the order of AO for deduction of tax u/s.194J. Revenue is in further appeal before me whereas assessee has filed cross objection. 7. From the record I found that during the year under consideration the assessee company had filed an application u/s. 197 of the I.T. Act for Lower Deduction of Tax at Sources (TDS) in respect of various payment to be made by it. Consequentially the Ld. A.O. issued notice U/s 201(1)/201(1A) and called for various details and all the details were submitted by the A.R. of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts made to Viniyog Insurance Services. The details such as date, invoice number, amount, service tax collected, were furnished by the appellant. As mentioned, the tax deducted at source amounting to ₹ 56,5037- under section 194C of the Act was made on each of these payments aggregating ₹ 28,25,156/- (including ₹ 3,10,777/- being service tax collected). Coming to the issue as to the correct section under which tax ought to have been deducted, the very description of services received, i.e., website development, website hosting, online content, exchange server services, are in themselves suggestive cf delivery of technical services. That is to say, these services can be performed only by professionals trained in and belonging to the Information Technology sector and not by everyone. It cannot be denied that these require the possession of extensive technical skills. The payments made are for the end-to-end website facility and solutions, even though the appellant may have segregated it into three sub-components. It is not that the website is owned and operated by the appellant and only maintenance is done by the aforesaid vendor. There is a dominant element of techn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . As per schedule to the agreement dated 01.08.2007 entered into with the aforesaid vendor, digitization of records involved scanning and uploading of proposal forms, premium instruments, annexures, endorsement requests, policy receipts, policy copy as per the instructions given by the company, claim intimation, discharge vouchers, query letters, claim payment advice, claim closure letters, etc. In other words, these would be digitization of documents that are generated by an insurance company in the normal course of its functioning. The assessee stated that digitization facilitated for easy retrieval of records at the time of renewal and claim, besides helping in saving storage cost. 13. By the impugned order, CIT(A) accepted assessee s contention by following the order of the Co-ordinate Bench in the case of Reliance Life Insurance Company ITA No.6543/Mum/2014 dated 19/08/2016 after having the following observation:- 6.4.2 The matter has been considered. From the description of the services availed for which the payment was made by the appellant, it is seen that they are not specialised in nature or require any professional technique. These are routine, menial work and w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and are just simple and repetitive nature of work such as document storage, document delivery and collection services and documents management services. The Id CIT(A) examined the contract with Writer Information Management Services and found that very basic services were Contracted and rendered by the said party involving no special technical skill or professional qualification. On the basis of the rival arguments on perusal of the various records as placed before us we find that the work assigned to the service provider was not a technical or professional work which requires skills but simple, basic and repetitive nature of work and we are inclined to opine that the of CIT(A) is correct and deserved to be upheld. In view of the above facts, we dismiss the ground number 1 is raised by the Revenue by upholding the order of FAA on this point. 6.4.3 It is manifest that the facts in the appeal under consideration falls squarely within the ambit of the decision rendered by the Id. Appellate Tribunal, Mumbai, in the aforementioned decision. Respectfully following the same, it is held that there was no liability on the part of the appellant to deduct tax at source within the mea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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