TMI Blog2024 (2) TMI 47X X X X Extracts X X X X X X X X Extracts X X X X ..... m and assessee is in the process of furnishing of certificate to this effect from an Accountant in Form No. 26A, however, the Ld.CIT(A) has not considered the submissions of the assessee. In the grounds of appeal the assessee also contended that the AO failed to consider the amount already deposited by the assessee even before passing the order u/s 201(1) and 201(1A) of the Act. We observe that as per the mandate of the Hon ble Supreme Court in the case of Hindustan Coca Cola Beverage Pvt. Ltd [ 2007 (8) TMI 12 - SUPREME COURT ] if the payee has taken into consideration the amounts received by payer in their return of income and paid taxes on such amounts the assessee cannot be treated as an assessee in default u/s 201(1) of the Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne. 3. Perusal of the order passed u/s 201(1) and 201(1A) for these assessment years reveals that assessee made certain payments towards ambulance rent, maintenance of X-ray machine and CVC machine. The assessee deducted TDS on X-ray machine and CVC machine @ 1% u/s 194C of the Act. However, the Assessing Officer (for short referred as the AO ) was of the view that the assessee should have deducted TDS u/s 194J at 10% on payments made for maintenance of X-Ray and CVC machines as fees paid for professional and technical services. The AO passed order u/s 201(1) and 201(1A) treating the payments made towards maintenance of xray machine and CVC machine as charges for professional services and deducted TDS @10% u/s 194J of the Act. 4. Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd hence not liable to deduct TDS u/s 194J of the Act. The assesses has deducted TDS u/s 194C of the Act in regard to payments on AMC of medical equipment and machines etc. Accordingly, we find no infirmity in the order of CIT(A) on this issue and hence the same is confirmed. He has also relied on the decision of Hon ble ITAT Ahmedabad and Hon ble Madras High Court on this issue. The CBDT circular no.7 dated 08.08.1995 also supports his contention. As an alternate plea, the assessee has submitted that the payees have taken into account such some for computing the return of their income and had paid taxes accordingly. A certificate from an accountant in Form No. 26A, to this affect has been given. The assesses has also contended that as per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to a contractor who provides the service of an electrician will be in the nature of payment made in pursuance of a contract for carrying out any work. Accordingly, provisions of section 194C will apply in such cases. Question 29: Whether a maintenance contract including supply of spares would be covered u/s 194C or 194J of the Act? Answer: Routine, normal maintenance contracts which includes supply of spares will be covered under section 194C. However, where technical services are rendered, the provision of section 194J will apply in regard to tax deduction at source. 4.4 In the instant case as per the order of ITO(TDS) dated 27/02/2019 after IDS inspection it was held that payment of Rs.7,35,398/- was made on account of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of X-Ray machine for which TDS @ 2% is deductible as it is a contract for maintenance. The payment of Rs 55.000/- to Fuji Film is also m the nature of AMC/ contract for maintenance for which TDS @2% is deductible. Payment of Rs.20,206/- made lo Allengers Medical Systems was also AMC/ contract for maintenance for which TDS @ 2% is deductible. As discussed above and as submitted by the assessee, for these payments the assessee is in default for non deduction of tax @ 2% u/s 194C of the Act as they were contractual in nature As regards audit fees the assessee has deducted TDS after a delay of 11 months and not at the time of making provision of the same, so interest u/s 201 (1A) is leviable. 5. On careful perusal of the observations of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... default u/s 201(1) of the Act. The Ld.CIT(A) appears to have not considered all these submissions of the assessee and the evidences placed before him. In the absence of any evidence furnished before us to show that the payees have already considered these amounts in their returns, in the interest of justice, we restore this matter to the file of AO for fresh adjudication in accordance with law. The assessee is at liberty to file all the evidences to support their contentions before the AO. All the issues in the appeal are left open for fresh adjudication in accordance with law after providing adequate opportunity of being heard to the assessee. 8. Grounds in the appeal for the AY 2019-20 are identical to grounds in appeal for AY 2017-18 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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