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TMI Blog2018 (12) TMI 107X X X X Extracts X X X X X X X X Extracts X X X X ..... ttention to page 16 of the impugned order wherein the case of the assessee itself has been mentioned for A.Ys 2007-08 to 2010-11 along with various other decisions. This factual matrix was not controverted by the Revenue, though the learned DR defended the addition made by the learned Assessing Officer by advancing arguments, which is identical to the ground raised. 3. We have considered the rival submissions and perused the material available on record. 3.1 We find that this issue has been deliberated upon by the Tribunal (ITA No.6492 to 6494/Mum/2012 etc. order dated 18.11.2016) in the case of assessee itself for various assessment years. The relevant portion of the same is reproduced hereunder: "11. By the impugned order Ld. CIT(A) held that no tax is required to be deducted at source in respect of service tax component of commission so paid to the commission agent after having the following observation: 4.26 I have considered the facts of the case the order of the AO, the written submissions and the arguments of the AR on this issue. The appellant is engaged in Life Insurance Business through a network of brokers and agents. The Life Insurance agents do not pay service ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant because the provisions of section 194J are materially different from those of section 1940 and 194-1. Thus there is sufficient force in the contention of the appellant. It can be noted that the provisions of sections 1940 and 194-1 are identical in the sense that the words used therein are "any income by way of....... " However, in section 194J of the Act the words used are "any sum by way of ......" Hence, I agree with the Appellant that Circular No.4/2008 dated 29th April, 2008 applies to the present case related to section 194D of the Act and later clarification vide circular F No. 275/73/2Q071T (B) dated 30.06.2008 in the context of section 194J of the Act issued .by the CBOT would not apply to the appellant. 4.30 It is not in dispute that the amount paid to and receivable by Insurance Agent is the commission amount without the Service Tax Component. The accounting entries passed by the appellant Company have the effect of credit of the net amount of insurance commission payable to the Insurance agents. The Service Tax component liability on the said commission has been separately discharged by way of payment to Government Treasury directly by the appellant. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whether by way of commission or otherwise, for soliciting or procuring insurance business (including business relating to the continuance, renewal or revival of policies of insurance) shall, at the time of credit of such income 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 income-tax thereon at the rates in force: Similarly the provisions of section 194 I of the Act are also reproduced below for the sake of better understanding of the issue in hand:-J 194I. Rent.-Any person, not being an individual or a Hindu undivided family, who is responsible for paying to a resident any income by way of rent, shall, at the time of credit of such income to the account of the payee or at the time of payment thereof in cash or by the issue of a cheque or draft or by any other mode, whichever is earlier, deduct income-tax thereon at the rate of- 22. A careful perusal of the above provisions reveal that the TDS is required to be deducted and paid to the Govt Treasury on the income payable only which means that certainly the service tax component on the commission is not liable to TDS as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the high court and also referred to in para no 2 of the circular. After considering the facts of the case before us in the light of circulars as referred to above and decision of the Rajasthan High Court and also the relevant provisions of the Finance Act which provides for JReverse Charge Mechanism" , we are of the opinion that the order of CIT(A) is correct and does not suffer from any infirmities and we ,therefore , uphold the same. In result , the appeal of the revenue is dismissed. As the facts and circumstances during the year under consideration are same as considered by the Tribunal in the above order, we do not find any infirmity in the order of Ld. CIT(A) for holding that no tax is required to be deducted at source in respect of component of service tax so paid to the commission agent. 13. In the result ground taken by the Revenue in all the year under consideration are dismissed." 3.2 We find that in the aforesaid order, the Tribunal has duly considered the factual matrix and found that this ground is squarely covered by the decision of the co-ordinate Bench in the case of M/s. Reliance Life Insurance Company Ltd. (ITA No. 3009 to 3011/Mum/2013 order dated 25. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is regard is deleted. 17. We have considered rival contention and found that the issue is squarely covered by the decision of coordinate bench in case of M/s Reliance Life Insurance Co. Ltd. (supra), wherein Tribunal observed as under: 9. We have heard both the parties and perused the orders of the Revenue Authorities as well as the relevant material placed before us. From the orders of authorities below , rival submissions and records before us , we find that the assessee engaged in the life insurance business needs various types of services such as storage of data, scanning and sorting of documents, processing charges, call centre operations and business services besides other basic works connected and incidental therewith which were outsourced by the assessee to outside agencies on contractual basis. The various services outsourced were cash & bank reconciliation, commission querry handling, cash cheque collection charges , commission processing and document despatch, data processing, policy despatch, document scanning , printing ,emails of documents, infra support and outsourcing staffing, policy serving process, call inbound and outbound , tele-calling for answering custom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rned CIT(A), consequently, this ground of the Revenue is also dismissed. 5. The next ground raised by the assessee pertains to not correctly appreciating the nature of services received by the assessee by paying software/hardware maintenance charges, which requires the services of server management and call support services requiring highly qualified specialized technical competency and falls within the purview of section 194J and not under section 194C of the Act. The learned counsel for the assessee claimed that this issue is also covered by the aforesaid decision of the Tribunal vide para 14 to 17 of the order. The learned DR except defending the addition did not controvert the claim of the assessee. 5.1 We have considered the rival submissions and perused the material available on record. In view of the above, we are reproducing hereunder the relevant portion from the aforesaid order of the Tribunal dated 18.11.2016 for ready reference and analysis. "14. Common grievance of Revenue in all the years also pertains to CIT(A)'s action for holding that payment made for annual maintenance contract / routine repair is not free from technical services under section 194J and holding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iness needs various types of services such as storage of data, scanning and sorting of documents, processing charges, call centre operations and business services besides other basic works connected and incidental therewith which were outsourced by the assessee to outside agencies on contractual basis. The various services outsourced were cash & bank reconciliation, commission querry handling, cash cheque collection charges , commission processing and document despatch, data processing, policy despatch, document scanning , printing ,emails of documents, infra support and outsourcing staffing, policy serving process, call inbound and outbound , tele-calling for answering customer queries about product , follow and maintaining dealers network etc. As is clear from the said outsourced services, these are a sort of clerical and basic administrative work. The assessee made the payment for these services after deducting TDS under the provisions of section 194C of the Act believing these are basic type of services involving no technical or professional qualification whereas the AO came to the conclusion that these are technical services and were required to be subjected to TDS under the p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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