NDMC, New Delhi V. Addl. CIT, New Delhi

ITA 1046/DEL/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 65406 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 6 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Next Hearing Date: 18-04-2012
• Assessment Year: misc
• Appeal Filed On: 25-02-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R S NEGI SENIOR
• Assessee Lawyers: SURESH RAM CHANDANI
• Keywords: Non-deduction of tax
• Section: 143(3); 133A; 194C; 10; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH E : NEW DELHI) BEFORE SHRI B.C. MEENA, ACCOUNTANT MEMBER AND SHRI C.M. GARG, JUDICIAL MEMBER ITA NO.1046 & 1047/DEL./2011 (FINANCE YEAR : 2007-08) NEW DELHI MUNICIPAL COUNCIL, VS. ADDL.CIT, RANGE 50, DIRECTOR (COMMERCIAL), NEW DELHI. NDMC, MEZANNINE FLOOR, PALIKA KENDRA, PARLIAMENT STREET, NEW DELHI. (PAN : DELNO0008B) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI SURESH RAMCHANDANI, ADVOCATE REVENUE BY : SHRI R.S. NEGI, SENIOR DR ORDER PER B.C. MEENA, ACCOUNTANT MEMBER : THESE APPEALS FILED BY THE ASSESSEE EMANATE FROM TH E ORDER OF CIT (APPEALS)-XXX, NEW DELHI DATED 30.12.2010 FOR THE A SSESSMENT YEAR 2007- 08. 2. THE ASSESSEE, NEW DELHI MUNICIPAL COUNCIL (HEREI NAFTER REFERRED TO AS NDMC) IS THE MUNICIPAL GOVERNMENT OF NEW DELHI VE STED POWERS AS PER NDMC ACT, 1994. AS PER THIS ACT, THE NDMC ENTRUSTE D TO MAKE ADEQUATE PROVISIONS BY ANY MEANS OR MEASURES FOR MANY OBLIGA TORY FUNCTIONS INCLUDING SUPPLY AND DISTRIBUTION OF ELECTRICITY TO THE PUBLI C AS ENUMERATED. THE NDMC ITA NO.1046 & 1047/DEL./2011 2 HAS THE OBLIGATIONS OF A LICENCEE UNDER THE INDIAN ELECTRICITY ACT, 1910 IN RESPECT OF THE NEW DELHI AREA. UNDER SECTION 200 O F THE NDMC ACT, 1994, NDMC HAS THE POWERS TO FIX CHARGES TO BE LEVIED FOR THE ELECTRICITY SUPPLIED BY IT, SUBJECT TO THE PROVISIONS OF ANY LAW FOR THE TIME BEING IN FORCE. ASSESSING OFFICER HELD THAT ASSESSEE HAD COMMITTED DEFAULT IN NOT DEDUCTING TAX AT SOURCE U/S 194J OF THE ACT ON CHARGES, I.E. WHEELING CHARGES, SLDC, UI CHARGES AND TRANSMISSION CHARGES. CIT (A) PARTLY A LLOWED RELIEF. 3. ASSESSEE HAS FILED APPEALS BEFORE US BY TAKING T HE IDENTICAL FOLLOWING GROUNDS WHICH READ AS UNDER :- ON THE FACTS AND IN THE CIRCUMSTANCE OF THE CASE I D. CIT (APPEAL) ERRED IN 1) HOLDING THAT THE PAYMENTS MADE BY THE APPELLANT TO DTL, PGCIL ARE FOR TECHNICAL SERVICES AND THUS ATTRACT A LIABILITY UNDER SECTION 194J OF THE INCOME TAX ACT; 2) NOT DECIDING ON MERITS THE APPELLANT'S GROUND O F APPEAL CHALLENGING THE APPLICABILITY OF SECTION 194J OF TH E INCOME TAX ACT; ON THE CONTRARY, CONFIRMING THE ACTION OF THE LD. ADDL. COMMISSIONER OF INCOME TAX ON THE GROUND THAT THERE ARE NOT MUCH JUDGMENTS OF HC/SC ON THIS ISSUE; 3) HOLDING THAT PROVISIONS OF SECTION 194J ARE APP LICABLE IN PARA 14 OF THE ORDER EVEN THOUGH HOLDING THAT PROVI SIONS OF SECTION 194C ARE APPLICABLE VIDE PARA 12.5; 4) WITHOUT PREJUDICE TO ABOVE, EVEN THE PROVISIONS OF SECTION 194C ARE NOT APPLICABLE; 5) HOLDING THAT PROVISIONS OF SECTION 133A ARE APP LICABLE TO THE APPELLANT. ITA NO.1046 & 1047/DEL./2011 3 4. IN THE GROUND NOS.1 TO 4, THE ISSUE INVOLVED IS REGARDING NON-DEDUCTION OF TAX AT SOURCE FROM THE PAYMENTS MADE TO DTL (DEL HI TRANSCO LTD.) AND PGCIL (POWER GRID CORPORATION OF INDIA LTD.). CIT (A) HELD THAT SERVICES PROVIDED BY DLT AND PGCIC WERE TECHNICAL SERVICES, HENCE ATTRACT PROVISION OF SECTION 194J OF THE ACT. IN THE GROUND NO.5, TH E ISSUE RAISED IS REGARDING THE APPLICABILITY OF THE PROVISIONS OF SECTION 133A (SURVEY) OF THE ACT. SINCE THE ISSUE RAISED IN GROUND NO.5 IS RELATED TO THE J URISDICTION OF THE INCOME-TAX AUTHORITIES, THEREFORE, IT IS BEING CONSIDERED AND DECIDED FIRST. ASSESSEE HAD RAISED THIS ISSUE IN ADDITIONAL GROUND BEFORE CIT ( A) 5. CIT (A) HAS DECIDED THIS ISSUE RAISED BY HOLDING AS UNDER :- 10. I HAVE GIVEN MY CAREFUL CONSIDERATION TO THE G ROUND OF APPEAL AND SUBMISSIONS MADE THEREON. I AM OF THE O PINION THAT INCOME TAX AUTHORITY HAS JURISDICTION TO ENTER ANY PLACE WHERE BUSINESS OR PROFESSION IS CARRIED ON. IN APPELLANT 'S CASE NDMC IS CARRYING ON THE BUSINESS OF DISTRIBUTION OF ELEC TRICITY TO PEOPLE OF NCT, DELHI REGION. HENCE THERE IS NO ILLEGALLY I NVOLVED HERE BY CONDUCTING SURVEY U/S 133A BY TDS AUTHORITY. THE Y HAVE BEEN GIVEN SEPARATE JURISDICTION ON FUNCTIONALLY BA SIS BY CBDT. EVEN TDS AUTHORITY CAN VERIFY CURRENT FINANCIAL YEA R'S BOOKS OF ACCOUNTS OF ALL DDO'S IN GOVT. AUTHORITY TO CHECK P ROPER TAX DEDUCTED THERE ON. TDS AUTHORITY IS SILENT SOLDIER OF DEPARTMENT WHO CAN MOP UP MORE REVENUE BY BRINGING NEW TAX PAY ERS TO TAXNET, BY CONDUCTING SUCH SURVEYS. IN OUR SOCIO-EC ONOMIC CONDITION, PUBLIC SECTOR PLAYS A BALANCING ROLE BY PROVING MORE JOBS TO ECONOMY AND CREATING A BALANCE BETWEEN CAPI TALIST AND COMMUNIST ECONOMY. EVEN TDS AUTHORITY SHOULD HAVE A CCESS TO PURE GOVT. CONTROLLED BUSINESS AND EXPENSES, SO THA T PROPER TAX CAN BE COLLECTED FROM CROSS BORDER TRANSACTIONS AS WELL. HENCE TDS SURVEY ON NDMC IS NOT AT ALL ILLEGAL. AGAIN ROLE OF TAX DEDUCTOR IS PRIVATE PARTICIPATION IN PUBLIC TAX GATHERING MACHINERY I.E. PUBLIC PRIVATE ITA NO.1046 & 1047/DEL./2011 4 PARTNERSHIP(PPP) IS IN-BUILT IN TDS PROVISIONS TO B RING MORE EFFICIENCY TO TAX COLLECTION IN I.T.ACT. NDMC BEING LOCAL AUTHORITY SHOULD HELP GOVT. IN COLLECTING TDS IF AN Y ON BEHALF OF GOVT. AND DEPOSIT THE SAME IN GOVT. A/C. THE AO(TDS ) HAS POWER TO ENTER ANY TERRITORY IN HIS JURISDICTION AN D FIND OUT THE ADMINISTRATION OF TDS PROVISIONS FROM BOOKS OF A/C OF THAT ENTITY. IT IS JOINT RESPONSIBILITY OF AO-TDS & OTHE R PRIVATE/PUBLIC AUTHORITY TO ADMINISTER LT. ACT PROP ERLY. HENCE THIS GROUND OF APPEAL IS DISMISSED. 6. BEFORE US, THE LD. AR SUBMITTED ORAL ARGUMENTS A ND ALSO FILED WRITTEN SUBMISSION WHICH READ AS UNDER :- THE APPELLANT IS A MUNICIPAL COUNCIL SET UP UNDER THE NEW DELHI MUNICIPAL COUNCIL ACT, 1994 EMPOWERED TO ENGA GE IN THE MUNICIPAL GOVERNANCE OF THE TERRITORY OF NEW DELHI. IT IS DISCHARGING THE FUNCTIONS OF THE GOVERNMENT IN AS M UCH AS IT HAS BEEN EMPOWERED TO LEVY VARIOUS TAXES INCLUDING THE PROPERTY TAX. IT HAS VARIOUS MANDATORY FUNCTIONS AS STATED IN THE SECTION 11 OF THE ACT. ONE OF SUCH FUNCTIONS IS TO SUPPLY AND DIS TRIBUTE ELECTRICITY TO THE PUBLIC. IT IS INCUMBENT UPON THE APPELLANT TO DISCHARGE THIS FUNCTION. IT DOES NOT HAVE ANY DISCR ETION IN THIS REGARD AS A PERSON ENGAGED IN BUSINESS WILL HAVE WH ETHER TO RUN IT OR NOT. ITS INCOME IS ALSO EXEMPT UNDER SECTION 10 (20) OF THE INCOME TAX ACT. THE PROVISIONS OF SECTION 133A EMPOWERS THE DEPARTM ENT TO ENTER ONLY UPON THE PREMISES WHERE BUSINESS OR PROF ESSION IS BEING CARRIED ON. AS STATED ABOVE, THE APPELLANT IN THE PROCESS OF DISTRIBUTION OF ELECTRICITY IS NOT CONDUCTING ANY B USINESS BUT DISCHARGING STATUTORY AND MANDATORY FUNCTION. THE TERM 'BUSINESS' HAS COME FOR INTERPRETATION BEF ORE VARIOUS COURTS. DELHI HIGH COURT WHILE UPHOLDING THE DECISI ON OF ITAT DELHI IN THE CASE OF DIT (EXEMPTION) VS. THE INSTIT UTE OF CHARTERED ACCOUNTANTS HAS DISCUSSED VARIOUS SUPREME COURT DECISION. ONE OF THE LANDMARK DECISIONS IS CST VS. SAI PUBLICATION FUND (2002) 4 SCC 57 AND IS UNDER THE S ALES TAX ACT. THE FUND WAS SET UP FOR SPREADING MESSAGE OF S AI BABA. ITA NO.1046 & 1047/DEL./2011 5 THE QUESTION BEFORE SUPREME COURT WAS WHETHER THE F UND BY CONDUCTING SALE OF BOOKS CONTAINING MESSAGE OF SAIB ABA WAS CONDUCTING BUSINESS AND ATTRACTED SALES TAX. IT WAS HELD THAT IF THE MAIN ACTIVITY IS NOT BUSINESS THEN ANY INCIDENT AL ACTIVITY WOULD NOT AMOUNT TO BUSINESS. THE TRUST IS NOT CARR YING ON TRADE, COMMERCE ETC., IN THE SENSE OF OCCUPATION TO BE A 'DEALER' AS ITS MAIN OBJECT IS TO SPREAD MESSAGE OF SAIBABA OF SHIRDI AS ALREADY NOTICED ABOVE. HERE ALSO THE MAIN OBJECT IS TO DISCHARGE MUNICIPAL FUNCTIONS AND TO PROVIDE CIVIC NECESSITIE S LIKE WATER, ELECTRICITY, SANITATION ETC; IN FACT THAT IS THE OB JECT FOR WHICH THE APPELLANT HAS BEEN SET UP AND NOT RUNNING FOR BUSIN ESS.(KINDLY SEE PAGE 6 OF THE ENCLOSED DECISION) EVEN THOUGH TH E DEFINITION OF 'BUSINESS' IS OF MUCH WIDER AMPLITUDE UNDER THE SALES TAX ACT THAN UNDER THE INCOME TAX ACT. A COMPARISON IS AS U NDER: SECTION 2(13) OF THE INCOME TAX ACT SECTION 2(5A) OF THE SALES TAX ACT 'BUSINESS' INCLUDES ANY TRADE, COMMERCE OR MANUFACTURE OR ANY ADVENTURE OR CONCERN IN THE NATURE OF TRADE, COMMERCE OR MANUFACTURE 'BUSINESS' INCLUDES ANY TRADE, COMMERCE OR MANUFACTURE OR ANY ADVENTURE OR CONCERN IN THE NATURE OF TRADE, COMMERCE OR MANUFACTURE WHETHER OR NOT SUCH TRADE, COMMERCE, MANUFACTURE, ADVENTURE OR CONCERN IS CARRIED ON WITH A MOTIVE TO MAKE GAIN OR PROFIT AND WHETHER OR NOT ANY GAIN OR PROFIT ACCRUES FROM SUCH TRADE, COMMERCE, MANUFACTURE, ADVENTURE OR CONCERN AND ANY TRANSACTION IN CONNECTION WITH, OR INCIDENTAL OR ANCILLARY TO, THE COMMENCEMENT OR CLOSURE OF SUCH TRADE, COMMERCE, MANUFACTURE, ADVENTURE OR CONCERN; .... THE APPELLANT ALSO RELIES UPON SEVERAL DECISIONS QU OTED IN THE SAI PUBLICATIONS (SUPRA) WHICH BRING HOME REPEATEDL Y THAT ONE ITA NO.1046 & 1047/DEL./2011 6 MUST LOOK AT THE OBJECTIVE OF THE ASSESSEE. IF THE OBJECT WAS TO RUN A BUSINESS IT WOULD HAVE BEEN SET UP AS A PSU. UNLIKE ONGC, AND OTHERS, IT CAN NOT RAISE MONEY THROUGH SU BSCRIPTION, IT DOES NOT DISTRIBUTE PROFITS. THUS THE APPELLANT WAS NOT CARRYING ON ANY BUSINESS AND AN ACTION UNDER SECTION 133A WAS ILLEGAL AND THE ORDER NEEDS TO BE QUASHED. IF THIS LAW ENUNCIATED IN THE FOLLOWING CASES IS AP PLIED, THE SURVEY OPERATIONS AND CONSEQUENTIAL STEPS ARE ENTIR ELY WITHOUT JURISDICTION INCOME TAX OFFICER & ORS. VS. LAKHMANI MEWAL DAS, R EPORTED AT (1976) 103 ITR 43 (SC), L.R. GUPTA & ORS. VS. UN ION OF INDIA & ORS., REPORTED AT (1992) 194 ITR 3 (DELHI), VINDHYA METAL CORPORATION & ORS. VS. COMMISSIONER OF INCOME TAX & ORS., REPORTED AT (1985) 156 ITR 233 (ALL.), COMMIS SIONER OF INCOME TAX VS. VINDHYA METAL CORPORATION & ORS. REP ORTED AT (1997) 224 ITR 614 (SC) AND THE JUDGMENT OF BOMBAY HIGH COURT IN CARTINI INDIA LTD. VS. ADDITIONAL COMMISSI ONER OF INCOME TAX & ORS., REPORTED AT (2009) 314 ITR 275, BOMBAY HIGH COURT, NAGPUR BENCH WRIT PETITION NO. 2150 OF 2010 IN THE CASE OF M/S. SPACEWOOD FURNISHERS PVT. LTD., VERSUS THE DIRECTOR GENERAL OF INCOME-TAX (INVESTIGATION), PUNE. LD. AR PLEADED TO SET ASIDE THE ORDER OF CIT (A) ON THIS ISSUE. 7. ON THE OTHER HAND, THE LD. DR RELIED ON THE ORDE RS OF THE AUTHORITIES BELOW. THE NDMC HAS THE OBLIGATION OF A LICENSEE U NDER THE INDIAN ELECTRICITY ACT IN RESPECT OF THE NEW DELHI AREA. UNDER SECTION 200 OF THE NDMC ACT, 1994, NDMC HAS THE POWERS TO FIX CHARGES TO BE LEVIED FOR THE ELECTRICITY SUPPLIED BY IT, SUBJECT TO THE PROVISIO NS OF ANY LAW FOR THE TIME BEING IN FORCE. THE NDMC IS NOT DISTRIBUTING THE ELECTRICITY TO THE CONSUMERS FREE OF COST OR AT COST. AS PER THE PROV ISIONS OF ELECTRICITY ACT, 2003, W.E.F. 1.4.2007 THE RESPONSIBILITY FOR ARRANG ING SUPPLY OF POWER IN ITA NO.1046 & 1047/DEL./2011 7 DELHI SHALL REST WITH DISTRIBUTION COMPANIES. THE DISTRIBUTION COMPANY WOULD TRADE IN POWER. DELHI ELECTRICITY REGULATORY COMMISSION DECIDES RETAIL SUPPLY TARIFFS FOR ALL CONSUMER CATEGORIES. THE TARIFF IS DECIDED EVERY YEAR BY MAKING ADJUSTMENT ON ACCOUNT OF VARIATION I N UNCONTROLLABLE PARAMETERS. THE TARIFFS OF THE ELECTRICITY ARE DEC IDED BY THE DELHI ELECTRICITY REGULATORY COMMISSION (DERC) ON THE BASIS OF INFORM ATION AND MATERIAL SUPPLIED BY THE ASSESSEE. THE TARIFF IS ALSO DECID ED BY TAKING INTO CONSIDERATION THE CAPITAL EMPLOYED IN PERFORMING TH IS FUNCTION AND REASONABLE RETURNS THEREON. THIS ACTIVITY OF SUPPLYING ELECTR ICITY TO CONSUMERS BY LICENCEE NDMC IS BEING RUN ON A REGULAR BASIS. THE PROFIT ELEMENT IS INVADED IN THE TARIFF FIXED FOR THE CONSUMERS TO BE PAID IN THE CONSUMPTION OF THE ELECTRICITY. LD. DR ALSO SUBMITTED THAT MAKING IT MANDATORY FOR SUPPLY AND DISTRIBUTION OF THE ELECTRICITY TO THE RESIDENTS OF NDMC AREA HAS RATHER GIVEN AN OPPORTUNITY TO DO A MONOPOLY BUSINESS IN THE SPE CIFIED AREA. ASSESSEE EARNS SURPLUS PROFIT THAT TOO WITHOUT ANY COMPETITI ON. LD. DR PLEADED THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF DISTRIBU TION OF ELECTRICITY EVEN THOUGH IT WAS A MANDATORY FUNCTION AS PER THE NDMC ACT. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF SUPPLY AND DISTRIBUTION OF THE ELECTRICITY IN THE NDMC AREA. THEREFORE, THERE WAS NO DISCREPANCY OR IRREGULARITY IN CONDUCTING A SURVEY OPERATION U/S 133A OF THE ACT A T THE PREMISES OF THE ASSESSEE. HE PLEADED TO UPHOLD THE ORDER OF THE CI T (A). ITA NO.1046 & 1047/DEL./2011 8 8. WE HAVE HEARD BOTH THE SIDES ON THIS ISSUE. SUP PLY AND DISTRIBUTION OF ELECTRICITY IS AN OBLIGATORY FUNCTIONS OF THE NDMC MENTIONED IN THE NDMC ACT, 1994. THE ASSESSEE WAS UNDER THE OBLIGATION T O SUPPLY AND DISTRIBUTE THE ELECTRICITY TO THE CONSUMERS IN THE AREA UNDER ITS JURISDICTION. ASSESSEE HAD MONOPOLY IN SUPPLY OF ELECTRICITY IN THE SPECIFIED AREA. DERC REGULATES POWER PURCHASE, TRANSMISSION, DISTRIBUTION, SALE AN D SUPPLY. IT ALSO PROMOTES EFFICIENCY AND ECONOMY ACTIVITIES OF ELECTRICITY IN DUSTRY. IT ALSO REGULATES THE WORKING OF LICENCEE. NDMC IS ONE OF THE LICENCEE. ON THE PETITION OF NDMC, DERC DECIDES RETAIL SUPPLY TARIFF. NDMC SUBM ITS ITS BUSINESS PLAN TO DERC. ASSESSEE ALSO EARNS INCOME BY UNSCHEDULE D INTER-CHARGE TRANSMISSION AND SALE OF SURPLUS POWER. ASSESSEE A LSO JUSTIFIED ITS CASE FOR REVISION OF TARIFF ON THE BASIS OF CAPITAL EXPENDIT URE REQUIREMENT AND ALSO ON COMMERCIAL PRINCIPLES. RETURN ON CAPITAL BASE IS A LSO PART OF AGGREGATE REVENUE REQUIREMENTS. THE INCOME-TAX ACT, 1961 PROV IDES THE POWER FOR CONDUCTING THE SURVEY U/S 133A OF THE ACT. THE REL EVANT PORTION OF SECTION 133A READS AS UNDER :- 133A. (1) NOTWITHSTANDING ANYTHING CONTAINED IN AN Y OTHER PROVISION OF THIS ACT, AN INCOME-TAX AUTHORITY MAY ENTER ( A ) ANY PLACE WITHIN THE LIMITS OF THE AREA ASSIGNED TO HIM, OR (B ) ANY PLACE OCCUPIED BY ANY PERSON IN RESPECT OF W HOM HE EXERCISES JURISDICTION, [OR] [( C ) ANY PLACE IN RESPECT OF WHICH HE IS AUTHORISED FO R THE PURPOSES OF THIS SECTION BY SUCH INCOME-TAX AUTHORITY, WHO I S ASSIGNED THE AREA WITHIN WHICH SUCH PLACE IS SITUATED OR WHO EXE RCISES JURISDICTION IN RESPECT OF ANY PERSON OCCUPYING SUC H PLACE,] ITA NO.1046 & 1047/DEL./2011 9 AT WHICH A BUSINESS OR PROFESSION IS CARRIED ON, WH ETHER SUCH PLACE BE THE PRINCIPAL PLACE OR NOT OF SUCH BUSINESS OR PROFESSI ON, AND REQUIRE ANY PROPRIETOR, EMPLOYEE OR ANY OTHER PERSON WHO MAY AT THAT TIME AND PLACE BE ATTENDING IN ANY MANNER TO, OR HELPING IN, THE CARR YING ON OF SUCH BUSINESS OR PROFESSION ( I ) TO AFFORD HIM THE NECESSARY FACILITY TO INSPECT SUCH BOOKS OF ACCOUNT OR OTHER DOCUMENTS AS HE MAY REQUIRE AND WH ICH MAY BE AVAILABLE AT SUCH PLACE, ( II ) TO AFFORD HIM THE NECESSARY FACILITY TO CHECK OR VERIFY THE CASH, STOCK OR OTHER VALUABLE ARTICLE OR THING WHICH MAY BE FOUND THEREIN, AND ( III ) TO FURNISH SUCH INFORMATION AS HE MAY REQUIRE AS TO ANY MATTER WHICH MAY BE USEFUL FOR, OR RELEVANT TO, ANY PROCEE DING UNDER THIS ACT. AS PER THIS SECTION, THE INCOME-TAX AUTHORITIES HAV E POWER TO ENTER IN ANY PLACE WITHIN THE LIMITS OF THE AREA ASSIGNED TO SUC H AUTHORITY OR ANY PLACE OCCUPIED BY A PERSON IN RESPECT OF WHOM SUCH OFFICE R EXERCISED JURISDICTION OR ANY PLACE IN RESPECT OF WHICH SUCH OFFICER IS AUTHO RIZED FOR THE PURPOSES OF SECTION 133A BY THE INCOME-TAX AUTHORITIES, WHO HAS BEEN ASSIGNED THE AREA WITHIN WHICH SUCH PLACE IS SITUATED OR TO EXERCISE ANY PERSON OCCUPIED SUCH PLACE AT WHICH BUSINESS OR PROFESSION IS CARRIED ON . THE ASSESSEE IS SUPPLYING AND DISTRIBUTING ELECTRICITY IN ITS AREA TO THE CON SUMERS ON RATE OF TARIFFS FIXED BY DERC ON THE PETITIONS MADE BY THE ASSESSEE. THE DERC CONSIDERS THE PETITION AND ALSO OTHER ASPECTS WHICH INCLUDE THE R ETURN ON CAPITAL BASE AS ONE OF THE CRITERIA. THE REASONABLE RETURN ON CAPITAL BASE IS DETERMINED BY DERC. THE SUPPLY AND DISTRIBUTION IS NOT FREE OF COST OR ON COST. THUS, THERE IS A SOUND COMMERCIAL PRINCIPLE IN THE DETERMINATION OF THE TARIFFS TO BE CHARGED ITA NO.1046 & 1047/DEL./2011 10 FROM THE CONSUMERS. THIS ACTIVITY OF SUPPLY OF ELE CTRICITY TO CONSUMERS IS BEING DONE ON REGULAR BASIS. THE ELECTRICITY IS PU RCHASED FROM VARIOUS ELECTRICITY PRODUCERS AND IT IS SUPPLIED TO THE CON SUMERS IN THE AREA. BY DOING SO, THE ASSESSEE IS NOT ONLY MEETING OUT ITS OBLIGA TORY FUNCTIONS BUT ALSO EARNING ELEMENT OF REASONABLE RETURN ON CAPITAL BAS E. IN VIEW OF THIS, WE HOLD THAT ASSESSEE IS ENGAGED IN THE BUSINESS OF ELECTRI CITY SUPPLY AND DISTRIBUTION TO VARIOUS TYPE OF CONSUMERS IN THE AREA TO WHICH L ICENCE HAS BEEN GRANTED. THE ASSESSEES RELIANCE ON THE HON'BLE SUPREME COUR T DECISION IN THE CASE OF CST VS. SAI PUBLICATION FUND (2002) 4 SCC 57 IS O F NO HELP AS IN THAT CASE THE FACTS WERE COMPLETELY AT VARIANCE. THE TRUST W AS ENGAGED TO SPREAD THE MESSAGE OF SAIBABA OF SHIRDI. IN FURTHERANCE OF AN D TO ACCOMPLISH THIS OBJECT, THE TRUST PUBLISHES BOOKS, PAMPHLETS AND OTHER LITE RATURE CONTAINING THE MESSAGE OF SAIBABA UNDER THE AEGIS OF SAI PUBLICATI ONS WHICH WERE AVAILABLE TO THE DEVOTEES OF SAIBABA AT NOMINAL CHARGES JUST TO MEET THE COST. FURTHER, THE SALE PROCEEDS OF SUCH PUBLICATION WERE GOING TO THE TRUST AND WERE FORMING THE PART OF THE PROPERTY OF THE TRUST. THESE EARNI NGS COULD BE UTILIZED ONLY FOR THE ADVANCEMENT OF THE OBJECTS OF THE TRUST AND WHE N THE TRUST FAILS TO CARRY OUT THE AIMS AND OBJECTS, THEN THE REMAINING FUNDS WERE TO BE HANDED OVER TO SANSTHANAM OF SHIRDI. FURTHER IT WAS A CASE UNDER THE SALES-TAX ACT OF MAHARASHTRA. ASSESSEES CASE IS UNDER THE INCOME-T AX ACT, 1961 WHERE THE DEFINITION OF BUSINESS IS WIDE AND INCLUSIVE. TH E ASSESSEES ACTIVITY TO ITA NO.1046 & 1047/DEL./2011 11 SUPPLY AND DISTRIBUTION OF ELECTRICITY IS REGULAR A ND CONTINUOUS. THE TARIFF RATES FOR VARIOUS CONSUMERS ARE FIXED BY THE DERC B Y CONSIDERING THE REASONABLE RETURN ON CAPITAL BASE. THE CHARGES OF SUPPLY OF ELECTRICITY ARE NOT ONLY TO MEET THE COST OF SUPPLY AS WAS THE CASE OF SAI PUBLICATIONS. IN VIEW OF THESE FACTS, THE RATIO DECIDED BY THE HON'BLE SUPRE ME COURT IN THE SAI PUBLICATIONS IS NOT APPLICABLE TO THE FACTS OF THE ASSESSEES CASE. IN OUR CONSIDERED VIEW, THE INCOME-TAX AUTHORITIES WERE HA VING JURISDICTION TO CARRY OUT THE SURVEY U/S 133A AT THE PREMISES OF THE ASSE SSEE. IN CONDUCTING THE SURVEY U/S 133A, WE FIND NO LACK OF JURISDICTION, T HEREFORE, WE SUSTAIN THE ORDER OF CIT (A). 9. IN THE GROUND NOS.1 TO 4, THE ISSUE INVOLVED IS NON-DEDUCTION OF TDS ON THE PAYMENTS MADE TO DTL AND PGCIL. 10. THE LD. AR HAS SUBMITTED ORAL ARGUMENTS AND ALS O SUBMITTED WRITTEN SUBMISSIONS AS UNDER :- WHY TRANSMISSION CHARGES ARE NOT TECHNICAL SERVICE S? TO UNDERSTAND THE ENTIRE SYSTEM OF WORKING OF THE A PPELLANT, KINDLY REFER TO THE CHART CONTAINED AT PAGE 52 OF THE PAPER BOOK. U NDER THE EXISTING ELECTRICITY LAW, THE ESSENTIAL FUNCTIONS OF GENERAT ING POWER, TRANSMISSION OF POWER AND DISTRIBUTION OF POWER ARE ASSIGNED TO DIF FERENT AND SEPARATE AGENCIES. OVERALL CONTROLLING AGENCY IS DERC (DELH I ELECTRIC REGULATORY COMMISSION). IT HAS POWERS TO FIX THE PRICE OF ENER GY, FIX THE FEES FOR TRANSMISSION AND FIX THE TARIFF FOR DISTRIBUTION AG ENCIES TO BE CHARGED FROM THE CUSTOMERS. THE DEPARTMENT AFTER CONDUCTING THE SURVEY AND WITH OUT SERVICE OF A PROPER NOTICE BROUGHT ALL THE PAYMENTS MADE BY THE APPELLA NT, BE IT FOR THE PURCHASE OF ENERGY OR FOR TRANSMISSION OR STATE LEV IES TREATED ALL OF THEM AS FEES FOR TECHNICAL SERVICES AND RAISED A WHOPPING D EMAND OF 186 CRORES. ITA NO.1046 & 1047/DEL./2011 12 THE REASONS GIVEN BY THE LD. AO ARE SELF-CONTRADICT ORY, VAGUE AND OUT OF CONTEXT. THE ID. AO HERSELF REFERS TO 'LICENSEE GEN ERATING COMPANIES, TRADERS' ETC. THE APPELLANT IS NEITHER A GENERATING COMPANY NOR A TRADER; IT IS A LICENSEE DISTRIBUTOR. SO WHATEVER HAS BEEN STATED BY THE AO IS NOT APPLICABLE TO THE APPELLANT. THEN SHE REFERS TO WHEELING CHARGES/TRANSMISSION CH ARGES REQUIRING EXTENSIVE DATA. UNDOUBTEDLY YES, BUT THIS AGAIN IS APPLICABLE TO TRANSMISSION UTILITIES AND NOT TO THE APPELLANT. EV EN A DOMESTIC SUPPLY OF ELECTRICITY OR MOBILE SERVICE TO AN INDIVIDUAL CONS UMER REQUIRES TO KEEP SUCH INFRASTRUCTURE. BUT ARE WE DEDUCTING TAX AT SO URCE FROM PAYMENTS MADE FOR SUCH SERVICES IN ANY CASE, MAINTENANCE OF DATA AND FRAMEWORK IPSO FACTO DOES NOT RESULT INTO TECHNICAL SERVICES. EVEN AS PER AO THESE ARE APPLICABLE TO THE TRANSMISSION UTILITIES. IN APPEAL BEFORE CIT(A), THE CIT(A) 1. ACCEPTED THAT SLDC AND OTHER CHARGES (EXCEPTING TRANSMISSION CHARGES) DO NOT CONSTITUTE TECHNICAL SERVICES; 2. DID NOT ACCEPT THAT TRANSMISSION CHARGES DO NOT CONSTITUTE TECHNICAL SERVICES; 3. DID NOT ACCEPT THAT THE DEPARTMENT'S ACTION UNDE R SECTION 133A WAS ILLEGAL; 4. ACCEPTED THAT THE TDS WAS NOT PAYABLE SINCE PAYE ES HAD SHOWN THE PAYMENTS IN THEIR RETURNS OF INCOME AND PAID TAXES THEREON. HENCE REDUCED DEMAND SUBSTANTIALLY. ONLY RETAINED THE INT EREST UNDER SECTION 201 FOR THE PERIOD TILL THE PAYEES DEPOSITE D THE TAXES IN THEIR CASES; ARGUMENTS IN SUPPORT OF TRANSMISSION CHARGES BEING NOT TECHNICAL SERVICES. THE CIT(A) ALSO IN HIS ORDER, HAS NOT DEALT THE ISS UE IN ITS CORRECT PERSPECTIVE; ON ONE HAND HE CONFIRMS AS THE SERVICE S BEING TECHNICAL AND ON THE OTHER HAND IN PARA 12.2, HE SAYS THAT IT A WORK CONTRACT AND SECTION 194C IS APPLICABLE. HOWEVER, THAT IS NOT THE CASE OF THE DEPARTMENT NOR DOES IT ARISE OUT OF THE GROUNDS OF APPEAL FILED BY THE APP ELLANT. 1. THE ONLY REASON GIVEN BY THE ID. CIT(A)( AFTER R EPRODUCING APPELLANT'S SUBMISSION FROM PAGE 25 TO 28) IS IN PA RA 14 OF THE ORDER ON PAGE 39 WHICH IS WORTHY OF REPRODUCTIO N: 'HOWEVER, THERE ARE NOT MUCH JUDGMENTS OF HC/SC ON INTERPRETATION OF 194-C VIS-A-VIS 194-J, AS THE PRO VISIONS ARE RECENT DEVELOPMENT OF LAW. THEREFORE I TAKE THE PAY MENT TO ITA NO.1046 & 1047/DEL./2011 13 DEDUCTEE COMPANIES AS PAYMENT OF TECHNICAL SERVICES UNDER SECTION 194-J OF THE ACT.' 4. THE APPELLANT RELIES UPON THE SUBMISSIONS MADE B EFORE THE CIT(A) IN THIS REGARD CONTAINED IN THE PAPER BOOK. 5. THE ISSUE IS SQUARELY COVERED BY THE DECISION OF THE ITAT JAIPUR IN THE CASE OF IN THE CASE OF JAIPUR VIDYUT VITARAN NI GAM LTD. VS. ITO 2009-(026)-DTR-0154- TJAI. LD. AR PLEADED TO SET ASIDE THE ORDER OF CIT (A). 11. ON THE OTHER HAND, THE LD. DR RELIED ON THE ORD ERS OF THE AUTHORITIES BELOW. 12. WE HAVE HEARD BOTH THE SIDES ON THE ISSUE. WE HAVE ALSO CONSIDERED THE DECISIONS RELIED UPON. ASSESSEE CLAIMED THAT T HIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF ITAT, JAI PUR BENCH IN THE CASE OF JAIPUR VIDYUT VITARAN NIGAM LTD. VS. ITO 2009(02 6)-DTR-0154-TJAI WHEREIN THE ITAT HAS HELD AS UNDER :- AN ANALYSIS OF ABOVE CASES LAYS DOWN THE PROPOSITI ON THAT S. 194J WOULD HAVE APPLICATION ONLY WHEN THE TECHNOLOGY OR TECHNI CAL KNOWLEDGE OF A PERSON IS MADE AVAILABLE TO OTHERS AND NOT WHERE BY USING TECHNICAL SYSTEMS, SERVICES ARE RENDERED TO OTHERS. RENDERING OF SERVICES BY ALLOWING USE OF TECHNICAL SYSTEM IS DIFFERENT THAN CHARGING FEES FOR RENDERING TECHNICAL SERVICES. THE APPLICABILITY OF S. 194J WOULD COME INTO EFFECT ONLY WHEN BY MAKING PAYMENT OF FEE FOR TECHN ICAL SERVICES, ASSESSEE ACQUIRED CERTAIN SKILL/KNOWLEDGE/INTELLECT WHICH CAN BE FURTHER USED BY HIM FOR ITS OWN PURPOSE/RESEARCH. WHERE FAC ILITY IS PROVIDED BY USE OF MACHINE/ROBOT, OR WHERE SOPHISTICATED EQUIPM ENTS ARE INSTALLED AND OPERATED WITH A VIEW TO EARN INCOME BY ALLOWING THE CUSTOMERS TO AVAIL OF THE BENEFIT BY USE OF SUCH EQUIPMENT, THE SAME D OES NOT RESULT IN THE PROVISION OF TECHNICAL SERVICE TO THE CUSTOMER FOR A FEE. SIMILAR IS THE PROPOSITION LAID DOWN IN OTHER CASES RELIED BY THE LEARNED AUTHORISED REPRESENTATIVE (SUPRA). THE ARGUMENTS OF THE LEARNED DEPARTMENTAL REPRESENT ATIVE THAT HUMAN ELEMENT IS INVOLVED IN PROVIDING SUCH SERVICE MAKIN G THE PAYMENT OF WHEELING/SLDC CHARGES LIABLE FOR DEDUCTION OF TAX A T SOURCE AS TECHNICAL SERVICE HAS NO MERIT AS THE TECHNICAL SERVICE IS NO T PROVIDED TO THE ITA NO.1046 & 1047/DEL./2011 14 PERSONNEL OF THE ASSESSEE. WE ARE ALSO UNABLE TO PU RSUE (SIC) OURSELF, WITH THE CONTENTION OF THE LEARNED DEPARTMENTAL REPRESEN TATIVE THAT OTHER PERSONS ARE MAKING DEDUCTION AT SOURCE ON SUCH PAYM ENT UNDER S. 194C/194J/194H. ON GOING THROUGH THE PAPERS FILED A T PP. 34 TO 41 OF THE PAPER BOOK FILED BY THE DEPARTMENT WE NOTE THAT AS PER THOSE PAPERS ONLY SOME REPORT/LETTERS HAS BEEN ISSUED BY THE TDS OFFI CER REQUIRING THE DEDUCTION OF TAX AT SOURCE ON SUCH, PAYMENT. SIMILA RLY M/S. HINDUSTAN ZINC LTD. DEDUCTING THE TAX AT SOURCE UNDER S. 194C IN RESPECT OF PAYMENT OF TRANSMISSION CHARGES TO RVPN CANNOT LAY DOWN THE LAW. HERE IT WOULD BE PERTINENT TO MENTION THAT EVEN THE CIT(A) IN ASS ESSEE'S OWN CASE FOR ASST. YR. 2006-07 AGAINST THE ORDER OF AO UNDER S. 143(3) HAS GIVEN A FINDING ON P. 54 OF HIS ORDER THAT THESE PAYMENTS A RE NOT COVERED UNDER S. 194C AGAINST WHICH NO APPEAL IS FILED BY THE DEPART MENT THOUGH WE ARE OTHERWISE CONVINCED WITH THE ARGUMENT OF LEARNED AU THORISED REPRESENTATIVE THAT S. 194C IS NOT APPLICABLE ON TH IS PAYMENT IN VIEW OF THE DETAILED SUBMISSION MADE IN THIS REGARD AT PAPE R BOOK PP. A-18 TO A- 21. THE DECISION RELIED BY THE ITO (TDS) IN THE CASE OF CBDT & ORS. VS. OBEROI HOTELS (INDIA) (P) LTD. (SUPRA) CIRCULAR NO. 187, DT. 23RD DECEMBER, 1975 AND IN THE CASE OF CONTINENTAL CONST RUCTION LTD. VS. CIT (SUPRA) THOUGH RELATES TO S. 80-0 OF THE IT ACT, SU PPORTS THE CASE OF THE ASSESSEE THAT A TECHNICAL SERVICE IS INVOLVED WHERE 'INFORMATION CONCERNING INDUSTRIAL, COMMERCIAL OR SCIENTIFIC KNO WLEDGE, EXPERIENCE OR SKILL IS MADE AVAILABLE'. IN THE PRESENT CASE NO SC IENTIFIC KNOWLEDGE, EXPERIENCE OR SKILL IS MADE AVAILABLE/RENDERED BY T HE RVPN TO THE ASSESSEE. THE ASSESSEE ITSELF HAS ITS OWN ENGINEERS AND TECHNICIANS WHO CONSISTENTLY MONITOR AND SUPERVISE THE FLOW OF THE ELECTRICITY TO ITS SYSTEM AND ULTIMATELY SUPPLIES TO ITS CUSTOMER. THE FUNCTI ON OF SLDC AS REGULATOR AND CONTROLLER FOR OPTIMUM SCHEDULING AND DISPATCH OF ELECTRICITY, AND SUPERVISION OVER THE INTRA-STATE T RANSMISSION SYSTEM IS STATUTORY FUNCTION WHICH IS ALSO ENTRUSTED TO RVPN AND THEREFORE, RVPN BY DISCHARGING SUCH STATUTORY FUNCTION DO NOT PROVI DE ANY TECHNICAL SERVICE. WE HAVE ALSO CONSIDERED THE OTHER DECISIONS RELIED BY THE LEARNED DEPARTMENTAL REPRESENTATIVE WHICH ARE CLEARLY DISTI NGUISHABLE ON FACTS. IN THE CASE OF SINGAPORE AIRLINES LTD. VS. ITO (SUP RA) THE NAVIGATION CHARGES PAID WAS FOR GETTING THE TECHNICAL SERVICE LIKE WEATHER REPORT, INSTRUCTION OVER FLIGHTS TO FLY OVER TECHNICAL TERR ITORIES AND SUCH OTHER TECHNICAL SERVICES WHICH ARE NEEDED TO FLY THE AIRC RAFT ON THE INDIAN TERRITORY. BY GIVING THESE INSTRUCTIONS AND TECHNIC AL SERVICES TO FLY THE AIRCRAFT THE TECHNICAL KNOWLEDGE OF A PERSON WAS MA DE AVAILABLE TO THE ASSESSEE AND THEREFORE IT WAS HELD TO BE A PAYMENT FOR TECHNICAL SERVICES WHICH IS NOT THE FACTS OF THE PRESENT CASE. THE CAS E OF CANARA BANK VS. ITO (SUPRA) IN RESPECT OF PAYMENT OF MICR CHARGES T O SBI WHICH INVOLVED HUMAN SKILL AND COMPUTERISED MACHINE AND N OT SIMPLY MAKING AVAILABLE THE TECHNICAL EQUIPMENT WORKING ON ITS OW N AND THEREFORE HELD TO BE A PAYMENT TOWARDS MANAGERIAL SERVICES. THE DE CISION IN THE CASE OF ITA NO.1046 & 1047/DEL./2011 15 DR. HUTAREW & PARTNER (INDIA) (P) LTD. VS. ITO (SUP RA) IS WITH REFERENCE TO S. 195 AND NOT S. 194J. IN THIS CASE ALSO THE NO N-RESIDENT TO WHOM PAYMENT WAS MADE WAS NOT MAINTAINING ANY SERVER FOR EVERYBODY THAT ANYONE CAN FEED THE DATA AND GET THE SOLUTIONS. THE SOLUTIONS WERE PROVIDED ON THE SPECIFIC NEEDS OF THE CUSTOMERS. TH E INFORMATION SUPPLIED IS SPECIFIC WHICH HELPS THE ASSESSEE IN FI NALIZING ITS DESIGN. THE INFORMATION SUPPLIED TO THE ASSESSEE WAS A TECHNICA L INFORMATION WHICH HAS BEEN USED IN FURTHER GENERATING THE PRODUCT OF THE ASSESSEE. THEREFORE, SUCH SPECIFIC CLIENT BASED INFORMATION W AS HELD NOT EQUITABLE WITH THE STANDARD SERVICES PROVIDED BY TELECOMMUNIC ATION COMPANY. THUS THESE DECISIONS ARE QUITE DISTINGUISHABLE AND NOT APPLICABLE ON THE FACTS OF THE PRESENT CASE. WE THEREFORE HOLD THAT T HERE IS NO LIABILITY TO DEDUCT TAX AT SOURCE ON PAYMENT OF TRANSMISSION/WHE ELING/SLDC CHARGES UNDER S. 194J OR FOR THAT MATTER UNDER S. 194C. THE ITAT, JAIPUR BENCH HAD ALSO DECIDED THE ALTERNA TE PLEA ABOUT THE PAYMENT AS REIMBURSEMENT OF THE COST AS UNDER :- WE ALSO FIND FORCE IN ALTERNATE ARGUMENT OF THE LE ARNED AUTHORISED REPRESENTATIVE THAT THE PAYMENT OF TRANSMISSION/WHE ELING/SLDC CHARGES IS REIMBURSEMENT OF THE COST. THEREFORE THE PROVISI ONS OF CHAPTER XVII-B ARE NOT APPLICABLE SINCE THERE IS NO PAYMENT OF INC OME/REVENUE BY THE ASSESSEE. WE FIND THAT THE TARIFF IS FIXED BY AN IN DEPENDENT REGULATORY BODY I.E., RAJASTHAN ELECTRICITY REGULATORY COMMISS ION. THE TRANSMISSION COMPANY IS NOT ALLOWED ANY RETURN ON I TS CAPITAL; THE TARIFF IS DETERMINED ON THE PRINCIPLE OF NO PROFIT NO LOSS. FROM THE TARIFF ORDER WE FIND THAT TARIFF IS FIXED BY ESTIMATING THE ACTUAL COST OF OPERATION OF RVPN. IN CASE, ON THE BASIS OF SUCH TARIFF, ANY SUR PLUS IS LEFT WITH THE RVPN, THEY GIVE CREDIT OF THE SAME TO THE ASSESSEE AS EVIDENT FROM THE EXTRACT OF THE MINUTES OF THE BOARD AND THE COPY OF THE JOURNAL VOUCHER BY WHICH SUCH CREDIT IS GIVEN TO THE ASSESSEE. THUS WH EN NO INCOME IS PAID BY ASSESSEE TO TRANSMISSION COMPANY THE QUESTION OF DEDUCTION OF TAX AT SOURCE DO NOT OTHERWISE ARISE EVEN WHEN UNDER CERTA IN SECTIONS OF CHAPTER XVII-B LIABILITY OF TDS IS ON PAYMENT OF AN Y SUM AND UNDER CERTAIN SECTIONS IT IS ON PAYMENT OF INCOME AS ULTI MATELY THE TAX IS ON THE INCOME AND DEDUCTION OF TAX AT SOURCE IS ONLY ONE O F THE MODE OF COLLECTION AND RECOVERY OF THE TAX. ON ACTUAL REIMB URSEMENT, PROVISION OF DEDUCTION OF TAX AT SOURCE WOULD NOT A APPLY AS HEL D IN CASE OF ITO VS. DR. WILLMAR SCHWABE INDIA (P) LTD. (SUPRA), HEADNOT E OF WHICH READS AS UNDER: ''AS AGREED BY AND BETWEEN THE ASSESSEE COMPANY AND ITCL, A VEHICLE WAS TO BE PROVIDED BY THE ASSESSEE COMPANY TO THE SAID CONSULTANT FOR ATTENDING TO ITS WORK AND THUS, THE ASSESSEE COMPANY WAS TO BEAR THE VEHICLE EXPENSES ACTUALLY I NCURRED BY THE SAID PARTY. BILLS FOR SUCH EXPENSES INCURRED BY T HE SAID CONSULTANT ITA NO.1046 & 1047/DEL./2011 16 WERE SEPARATELY RAISED BY THEM ON THE ASSESSEE COMP ANY IN ADDITION TO BILLS FOR FEES PAYABLE ON ACCOUNT OF TE CHNICAL SERVICES AND SINCE THE AMOUNT OF BILLS SO RAISED WAS TOWARDS THE ACTUAL EXPENSES INCURRED BY THEM, THERE WAS NO ELEMENT OF ANY PROFIT INVOLVED IN THE SAID BILLS. IT WAS THUS A CLEAR CAS E OF REIMBURSEMENT OF ACTUAL EXPENSES INCURRED BY THE AS SESSEE AND THE SAME, THEREFORE, WAS NOT OF THE NATURE OF PAYMENT C OVERED BY S. 194J, REQUIRING THE ASSESSEE TO DEDUCT TAX AT SOURC E THEREFROM. THE CBDT CIRCULAR NO. 715, DT. 8TH AUGUST, 1995 [(1995) 127 CTR (ST), 13], RELIED UPON BY THE AO IN SUPPORT OF HIS CASE ON THIS ISSUE WAS APPLICABLE ONLY IN THE CASES WHERE BILLS ARE RA ISED FOR THE GROSS AMOUNT INCLUSIVE OF PROFESSIONAL FEES AS WELL AS REIMBURSEMENT OF ACTUAL EXPENSES AND THE SAME, THER EFORE, WAS NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE WHE RE BILLS WERE RAISED SEPARATELY BY THE CONSULTANTS FOR REIMBURSEM ENT OF ACTUAL EXPENSES INCURRED BY THEM. AS SUCH, CONSIDERING ALL THE FACTS OF THE CASE, THE PROVISIONS OF S. 194J WERE NOT APPLIC ABLE TO THE REIMBURSEMENT OF ACTUAL EXPENSES AND THE ASSESSEE C OMPANY WAS NOT LIABLE TO DEDUCT TAX AT SOURCE FROM SUCH REIMBU RSEMENT.' UNDER THESE CIRCUMSTANCES, WE HOLD THAT THE LOWER A UTHORITIES WERE NOT JUSTIFIED IN HOLDING THAT THE ASSESSEE IS LIABLE FO R DEDUCTION OF TAX AT SOURCE ON THE PAYMENT OF TRANSMISSION/SLDC CHARGES TO RVPN. WE THUS, SET ASIDE THE ORDER OF THE LOWER AUTHORITIES AND AL LOW THE GROUND OF THE ASSESSEE. THE GROUND NO.1 IS THUS ALLOWED. THUS, THE HON'BLE ITAT HAS HELD THAT THERE WAS NO L IABILITY TO DEDUCT TAX AT SOURCE ON PAYMENT OF TRANSMISSION/WHEELING/SLDC CHA RGES U/S 194J. HOWEVER, IN SUBSEQUENT PARA, WHILE DECIDING THE ALT ERNATE PLEA OF THE ASSESSEE, THE ITAT, JAIPUR BENCH HAS GIVEN A FINDIN G THAT THE PAYMENT OF TRANSMISSION/WHEELING/SLDC CHARGES WERE REIMBURSEME NT OF THE COST. THE TRANSMISSION COMPANY WAS NOT ALLOWED ANY RETURN ON ITS CAPITAL. THE TARIFF IS DETERMINED ON THE PRINCIPLE OF NO PROFIT NO LOSS. ON THESE FACTS, THE ITAT DECIDED THAT THE PROVISIONS OF CHAPTER XVII-B WERE NOT APPLICABLE AS THERE IS NO PAYMENT OF INCOME OR REVENUE. IN THE CASE UNDER CONSIDERATION, WE FIND THAT THERE IS NO SUCH FINDING AVAILABLE ON RECORD A LTHOUGH THE TARIFFS ARE FIXED ITA NO.1046 & 1047/DEL./2011 17 BY THE REGULATOR DERC. THERE IS NO FINDING ON RE CORD THAT THE TARIFF IS DETERMINED ON THE PRINCIPLE OF NO PROFIT NO LOSS. IN THE ABSENCE OF SUCH FINDING, WE FIND IT DIFFICULT TO GRANT RELIEF TO AS SESSEE ON THE BASIS OF DECISION OF HON'BLE ITAT, JAIPUR BENCH. IN VIEW OF THESE FA CTS, WE FIND IT APPROPRIATE TO RESTORE THE ISSUE TO THE FILE OF THE ASSESSING O FFICER TO DECIDE AFRESH AFTER TAKING NECESSARY DETAILS ON RECORD. 13. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON THIS 31 ST DAY OF MAY, 2012. SD/- SD/- (C.M. GARG) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : THE 31 ST DAY OF AUGUST, 2012/TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-XXX, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.