ACIT, V. The Director,

ITA 119/PAT/2012

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 1022 (ITAT-PATNA)
• Duration Of Justice: 2 year(s) 9 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-05-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 21-08-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHIKESH JHA
• Assessee Lawyers: ARCHANA SINHA SR S C
• Section: 194C

Judgement Text

, PATNA IN THE INCOME TAX APPELLATE TRIBUNAL , PATNA BENCH, PATNA . . . , , BEFORE SHRI A.D. JAIN (JM) AND SHRI SANJAY ARORA (AM) ./ I.T. A. NO S . 119 & 120 /PAT/201 2 ( / ASSESSMENT YEARS: 200 9 - 1 0 & 2010 - 11 ) THE DIRECTOR, CIVIL AVIATION CABINET SECRETARIAT DEPTT. AIRPORT , PATNA. / VS. AC IT , TDS CIRCLE, PATNA . ./ ./ PAN/GIR NO. : PTNC00163C ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI SHIKESH JHA , ADV. / RESPONDENT BY : S MT. ARCHANA SINHA , S R.S.C. / DATE OF HEARING : 2 3 /4/2015 / DATE OF PRONOUNCEMENT : 28/ 5 /2015 / O R D E R PER SANJAY ARORA, AM: THIS IS A SET OF TWO A PPEAL S, I.E., FOR TWO CONSECUTIVE YEARS , BEING A.YS. 2009 - 10 AND 2010 - 11 , BY THE REVENUE, ARISING OUT OF THE ORDER BY THE COMMISSIONER OF INCOME T AX (APPEALS) - DHANBAD (CIT(A) FOR SHORT) DATED 28.06.2012 , ALLOWING THE A SSESSEES APPEAL S CONTESTING THE ORDERS PASSED U/SS. 201 ( 1) / 201(1A) OF THE INCOME TAX ACT, 1961 (THE ACT HEREINAFTER) FOR THE RELEVANT YEAR S. 2. THE ASSESSEE WAS SUBJECT TO SURVEY U/S.133A OF THE ACT ON 06.08.2009 . E XAMINING THE COMPLIANCE OF THE TAX DEDUCT ION AT SOURCE (TDS) PROVISIONS OF THE ACT , I T WAS FOUND THAT THE ASSESSEE WAS PAYING SUMS BY WAY OF MAINTENANCE CHARGES TO TWO FIRMS, I.E., M/S. ASSOCIATED AIRPORTS (P.) LTD AND V E RMAN AVIATION (P.) LTD. , DEDUCTING TAX U/S.194C OF 2 ITA NO. 119 & 120 /PAT/2012 (A.Y. 2009 - 10) THE DIRECTOR, CIVIL AVIATION VS. ACIT THE ACT @ 2.36%. IN VIEW OF THE ASSESSING OFFICER (A.O.), HOWEVER, TAX WAS LIABLE TO BE DEDUCTED U/S.194J OF THE ACT, I.E., CONSIDERING THE SAME AS FEES FOR PROFESSIONAL OR TECHNICAL SERVICES , @ 10.30%. THE ASSESSEE CARR YING THE MATTER IN APPEAL , THE LD. CIT(A) FOUND THAT THE ASSESSEE WAS MAINTAINING S OME A I R CRAFT S AND HELICOPTER S FOR THE USE OF THE BIHAR GOVERNMENT . TOWARD THE SAME, TO KEEP THE M AIRWORTHY AND SUITABLE FOR SAFE FLIGHT, IT ENGAGED TWO FIRM S FOR MAINTENANCE. THE NATURE OF THE WORK DONE BY THEM WAS ONLY IN THE NATURE OF A WORK S CONTRACT, WHILE THE PURCHASES OF SPARES AS MADE FROM THEM W AS NOT LIABLE FOR ANY DEDUCTION OF TAX AT SOURCE , EVEN THOUGH TAX WAS BEING DEDUCTED ON THE ENTIRE SUM PAID TO THEM . HE, ACCORDINGLY, SET ASIDE THE IMPUGNED ORDERS , SO THAT, AGGRIEVED, THE REVENUE IS IN APPEAL. 3. WE HAVE HEARD THE PARTIES, AND PERUSED T HE MATERIAL ON RECORD. THE LEAST THAT THE REVENUE WAS EXPECTED TO ; IT RELYING ON THE ORDERS U/SS. 201(1)/201 (1A), IS TO ADDUCE THE RELEVANT AGREEMENTS, ON THE BASIS TO WHICH IT COULD, IF AT ALL , BE CONTEND ED THAT THE MAINTENANCE CONTRACT S ENTERED INTO BY THE ASSESSEE WITH THE TWO VENDORS WERE NOT IN THE NATURE OF WORK CONTRACTS, I.E., CONTRACTS FOR WORK, OR AMOU NTED TO FEES FOR PROFESSIONAL OR TECHNICAL SERVICES. IN FACT, WE OBSERVE N O REASON FOR THE SAME HAS BEEN ADVANCED OR CITED IN HIS ORDER BY THE ASSESSING OFFICER (A.O.). SURELY , ANY WORK WOULD INVOLVE A DEGREE O F SKILL OR KNOWLEDGE AND EXPERIENCE OF THE REL EVANT FIELD, AS OF THE ENGINEERING AND OPERATIONAL ASPECTS OF THE AIRBORNE VEHICLE S IN THE PRESENT CASE. AGAIN, WITHOUT DOUBT, A SPECIAL PROVISION WOULD OVERRIDE A GENERAL PROVISION , SO THAT WHERE THE CONTRACT IS FOR PROFESSIONAL OR TECHN ICAL SERVICES, IT IS SECTION 194 J , AS O PPOSE D TO SECTION 194C , THAT SHALL PREVAIL. THE DISTINGUISHING FEATURE WOULD BE THE LEVEL OF TECHNICAL KNOWLEDGE OR SKILL REQUIRED, AS WELL AS T HE INTENT WITH WHICH THE SERVICES ARE REQUISIT IONED . DRIVING IS A SKILL , BUT COULD ONE SAY , FOR EXAMPLE , THAT BY TAKING A CAB ONE IS CONTRACTING PROFESSION AL OR TECHNICAL SERVICES ? IT IS A PURE AND SIMPLE CONTRACT FOR WORK FOR CONVE YA NCE FROM ONE POINT TO ANOTHER . T H AT THE VENDORS IN THE INSTANT CASE ARE REQUIRED TO SUPPLY SPARES, ETC. , WHICH T HOUGH , AS IT APPEARS, ARE BIL LE D SEPARATELY - WHICH AGAIN IS ANOTHER MATTER, ALSO INDICATES OF IT BEING A COMPOSITE CONTRACT FOR UNDERTAKING MAINTENANCE. 3 ITA NO. 119 & 120 /PAT/2012 (A.Y. 2009 - 10) THE DIRECTOR, CIVIL AVIATION VS. ACIT WE, A CCORDINGLY, ON THE BASIS OF THE MATERIAL ON RECORD AS WELL AS THE CONTENTS OF THE ORDERS BEFORE US, FIND NO BASIS FOR TAKING ANY DIFFERENT VIEW IN THE MATTER, SO THAT THE MAINTENANCE CONTRACTS ENTERED INTO BY THE ASSESSEE ARE ONLY IN THE NATURE OF WORK CONTRACT S , LIABLE FOR DEDUCTION OF TAX AT SOURCE U/S.194C OF THE ACT. WE MAY THOUGH CLARIFY THAT IN OUR VIEW IT IS THE ENTIRE SUM, IRRESPECTIVE OF THE MANNER IN WHICH IT S DIFFERENT COMPONENTS ARE VALUED OR ARRIVED AT , PAID/PAYABLE, WHICH FORM S PART OF THE SAME CONTRACT AND , AS SUCH, LIABLE FOR DEDUCTION OF TAX AT SOURCE, WHICH OBTAINS IN THE PRESENT CA SE. THE IMPUGNED ORDERS ARE, THUS, UPHELD IN RESULT, AND THE REVENUE FAILS IN CONSEQUENCE. WE DECIDE ACCORDINGLY. 4. IN THE RESULT, THE REVENUES APPEALS ARE DISMISSED. ORDER PRONOUNCED BY LISTING THE RESULT ON THE NOTICE BOARD OF THE BENCH UNDER RULE 34 (4 ) OF THE APPELLATE TRIBUNAL RULES, 1963. SD/ - SD/ - ( A. D. JAIN ) (S ANJAY ARORA) / J UDICIAL MEMBER / A CCOUNTANT MEMBER DATED : 28 .05.2015 . . ./ ROSHANI , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT PATNA 5. , , / DR, ITAT, PATNA 6. / GUARD F ILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , ITAT, PATNA