M/s. Bombardier Transportation (India) Pvt. Ltd., Baroda V. The Dy.CIT, (TDS), Baroda

ITA 192/AHD/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 7941 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 10 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-12-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2008-2009
• Appeal Filed On: 22-01-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: MILIN K MEHTA
• Keywords: Recovery proceedings; Opportunity of being heard; Bonafide belief
• Section: 194C; 201(1); 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH AHMEDABAD BEFORE, SHRI S. S. GODARA, JUDICIAL MEMBER AND SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER ITA NOS. 192 TO 196 & 235 TO 239/AHD/2015 (ASSESSMENT YEARS: 2008-09 TO 2014-15) M/S. BOMBARDIER TRANSPORTATION INDIA PVT. LTD., BROWN BOVERI HOUSE, CHAKLI CIRCLE, RACE COURSE, BARODA 390007 A PPELLANT VS. DY. COMMISSIONER OF INCOME TAX (TDS), AAYKAR BHAVN, RACE COURSE ROAD, BARODA RESPONDENT & ITA NO. 456/AHD/2015 (ASSESSMENT YEAR: 2014-15) DY. COMMISSIONER OF INCOME TAX (TDS), AAYKAR BHAVN, RACE COURSE ROAD, BARODA APPELLANT VS. M/S. BOMBARDIER TRANSPORTATION INDIA PVT. LTD., BROWN BOVERI HOUSE, RACE COURSE CIRCLE, VADODARA, PIN 390007 RESPONDENT PAN: AAACA5584C /BY ASSESSEE : MILIN K. MEHTA, A.R. /BY REVENUE : VASUNDHAR UPMANYU, CIT D.R. WI TH V. K. SINGH , SR. D.R. /DATE OF HEARING : 06.12.2017 /DATE OF PRONOUNCEMENT : 20.12.2017 ITA NOS. 192 TO 196, 235 TO 239 & 456/AHD/15 [M/S. BOMBARDIER TRANSPORTATION INDIA PVT. LTD.] A .YS. 2008-09 TO 2014-15 - 2 - ORDER PER S. S. GODARA, JUDICIAL MEMBER THIS BATCH OF ELEVEN APPEALS PERTAINS TO A SINGLE A SSESSEE M/S. BOMBARDIER TRANSPORTATION INDIA PVT. LTD. RELEVANT PROCEEDING S IN ALL THESE CASES ARE U/S.201(1) R.W.S. 201(1A) OF THE INCOME TAX ACT, 19 61; IN SHORT THE ACT. FIRST SET OF ASSESSEES APPEALS ITA NOS. 192 TO 195/AHD/2015 FOR A.Y. 2008-09 TO 2011-12 EMANATE FROM THE CIT(A)-V, BARODAS ORDERS; ALL DAT ED 30.10.2014 PASSED IN CASE NOS. CAB/(A)V-151/14-15, CAB/(A)V-152/14-15, CAB/(A )V-154/14-15 & CAB/(A)V-153/14-15, AFFIRMING ASSESSING OFFICERS A CTION TREATING IT TO BE AN ASSESSEE IN DEFAULT U/S.201(1A) OF THE ACT INVOLVIN G AMOUNTS OF RS.4,89,823/-, RS.5,41,454/- RS.4,29,341/- AND RS.5,18,150/-; RESP ECTIVELY THEREBY CONCLUDING THAT ITS CORRESPONDING PAYMENTS/REMITTANCES MADE TO M/S. COMPUTER SCIENCE CORPORATION INDIA PVT. LTD. (CSCIPL) ARE IN THE NAT URE OF FEE FOR TECHNICAL AND PROFESSIONAL SERVICES ATTRACTING TDS DEDUCTION U/S. 194J RATHER THAN SECTION(S) 194C AND 194I OF THE ACT. ITA NOS. 235 & 237/AHD/2015 F OR A.Y. 2012-13 & 2013-14 ARISE AGAINST THE CIT(A)-VI, BARODAS SEPARATE ORDE RS; BOTH DATED 10.11.2014 IN CASE NOS. CAB/VI-337/2013-14 & CAB/VI-339/2013-14 I NVOLVE SIMILAR SUBSTANTIVE PLEADINGS EXCEPT THE FACT THAT THE ASSE SSMENT(S) IN QUESTION INVOLVED THEREIN READ FIGURES OF RS.31,54,489/- AND RS.19027 10/-; RESPECTIVELY. THE ABOVE TAXPAYERS NEXT TWO APPEALS ITA NOS. 196 & 236/AHD/ 2015 FOR A.Y. 2012-13 & 2014-15 ARISE FROM THE CIT(A)-V & VI, BARODAS ORDE RS DATED 30.10.2014 AND 10.11.2014 IN CASE NOS. CAB/(A)V-122/14-15 & CAB/VI -342/2013-14, AFFIRMING UPHOLDING ASSESSING OFFICERS ACTION TREATING PAYME NTS OF RS.14,38,31,381/- AND RS.14,49,04,533/-; RESPECTIVELY TOWARDS THE ABOVE V ERY PAYERS AS FEE FOR TECHNICAL AND PROFESSIONAL SERVICES U/S.194J THAN U/S. 194C A ND 194I OF THE ACT. LAST A.Y. 2014-15 INVOLVES ASSESSEES AND REVENUES CROSS APP EALS ITA NOS. 238 & 456/AHD/2015 AGAINST THE ABOVE LATTER CIT(A)S ORDE R DATED 10.11.2014 IN CASE NO. CAB/VI-340/2013-14 TREATING IDENTICAL PAYMENT OF RS .6,98,88,553/- AS FEE FOR TECHNICAL AND PROFESSIONAL SERVICES PAID TO CSCIPL . LATTERS CROSS APPEAL SEEKS TO REVIVE THE LOWER APPELLATE AUTHORITIES DIRECTIO NS ISSUED TO THE ASSESSING OFFICER ITA NOS. 192 TO 196, 235 TO 239 & 456/AHD/15 [M/S. BOMBARDIER TRANSPORTATION INDIA PVT. LTD.] A .YS. 2008-09 TO 2014-15 - 3 - TO VERIFY WHERE OR NOT THE PAYEES CONCERNED M/S. AR ADHANA ENGINEERING WORKS (AEW) AND COMMTEL NETWORKS PVT. LTD. (CNPL) HAVE IN CLUDED WITH RESPECTIVE PAYMENTS IN INCOME RETUNED OR NOT SO AS TO ABSOLVE THE ASSESSEE FROM THE IMPUGNED RECOVERY PROCEEDINGS U/S.201(1) PROVISO. 2. IT IS EVIDENT FROM THE ABOVE NARRATED PLEADINGS THAT THE SOLE ISSUE IN ALL ASSESSEES APPEALS IS AS TO WHETHER BOTH THE LOWER AUTHORITIES HAVE RIGHTLY TREATED ITS PAYMENTS/REMITTANCES TO M/S. CSCIPL AS PAYMENT FOR TECHNICAL AND PROFESSIONAL SERVICES U/S. 194J THAN 194C AND 194 I OF THE ACT S O AS TO ATTRACT SECTION 201(1) AND INTEREST THEREUPON U/S. SECTION 201 (1A) OF THE ACT ; AS THE CASE MAY BE. LEARNED COUNSEL REPRESENTING BOTH THE PARTIES INFORM US THA T ITA NO.196/AHD/2015 IN A.Y. 2012-13 IS BE TAKEN AS LEAD APPEAL SINCE CONTAINING ALL NECESSARY FACTS FOR THE SAKE OF CONVENIENCE AND BREVITY. WE THUS CALL OUT NECES SARY FACTS FROM THE ABOVE LEAD APPEAL. 3. THE ASSESSEE COMPANY MANUFACTURES RAIL VEHICLES AND COACHES. IT IS A DEDUCTOR FOR TDS PURPOSES. THE DEPARTMENT CARRIED OUT A SURVEY IN ITS CASE ON 13.08.2013. IT FOUND THE ASSESSEE/DEDUCTOR TO HAVE DEDUCTED TDS @2% ON PAYMENTS MADE TO CSCIPC TO THE TUNE OF RS.14,38,3 1,381/- TREATING THE SAME AS CONTRACTUAL RECEIPTS EXIGIBLE TO 2% TDS DEDUCTION T HAN FEE FOR TECHNICAL OR PROFESSIONAL SERVICES U/S. SECTION 9(1)(VII) EXPLAN ATION 2 R.W.S. 194J 1(A) & (B) OF THE ACT EXIGIBLE FOR TDS @ 10%. THE ASSESSING OFFI CERS ORDER IN QUESTION DATED 09.12.2013 REVEALS THAT HE SOUGHT TO TREAT ASSESSEE S ABOVE PAYMENTS AS FEE FOR PROFESSIONAL AND TECHNICAL SERVICES ONLY. 4. IT EMERGES FROM THE CASE RECORDS THAT THE ASSESS ING OFFICER ISSUED VARIOUS SHOW CAUSE NOTICES INCLUDING THE ONES DATED 20.09.2 013 AND 07.10.2013 ASKING NECESSARY CLARIFICATIONS QUA THE ABOVE SHORT DEDUCT ION OF TDS. THE TAXPAYERS DETAILED REPLY CAME ON 22.10.2013. IT FIRST OF ALL HIGHLIGHTED THE FACT THAT THE DEPARTMENT HAD CONDUCTED A SIMILAR SURVEY EARLIER O N 07.10.2012 AS CONCLUDED ON 26.03.2013 WHEREIN ALL RELEVANT DETAILS OF TDS RETU RNS, LEDGER ACCOUNT, INVOICE COPIES ETC. WERE PRODUCED WITHOUT RESULTING IN ANY DEMAND. THE ASSESSEE THUS ITA NOS. 192 TO 196, 235 TO 239 & 456/AHD/15 [M/S. BOMBARDIER TRANSPORTATION INDIA PVT. LTD.] A .YS. 2008-09 TO 2014-15 - 4 - REITERATED THAT IT WAS NOT A CASE OF COMPLETE NON D EDUCTION OF TDS BUT THAT OF A VERY GENUINE INTERPRETATIONAL ERROR OF TDS DEDUCTION @2% ALREADY DEDUCTED OR THAT @ 10% PROPOSED TO BE DEDUCTED WHEREIN IT WOULD NOT BE TREATED AS AN ASSESSEE IN DEFAULT IS THE IMPUGNED PROCEEDINGS AS PER CIT VS. BRITISH AIRWAYS 232 CTR 317 (SC) AND GWALIOR RAYON SILK CO. LTD. VS. CIT (1983) 37 CTR (MP) 351. THE ASSESSEE FURTHER STATED THAT ITS PAYEE CSCIPL HAD ALREADY INCLUDED THE VERY PAYMENTS IS THE RETURN OF THE CORRESPONDING ASSESSM ENT YEARS. IT THEREAFTER THREW LIGHT ON THE RELEVANT STATUTORY PROVISIONS I.E. SEC TION 9(1)(VII) EXPLANATION 2 R.W.S. 194J REGARDING PROFESSIONAL/TECHNICAL SERVICE, SECT ION 194C INCLUDING WORKS DEFINITION INSERTED IN THE ACT IN 1972, CBDT CIRCUL AR NO. 202 DATED 05.07.1976 CLARIFYING EFFECTIVE MEANING OF TECHNICAL SERVICES TO BE COVERING CONSIDERATION FOR ONLY THOSE KINDS OF CONTRACTS WHEREIN THE PAYEE REC IPIENT HAD TO MERELY ISSUE ITS INTELLECTUAL/TECHNICAL SKILLS WITHOUT ANY PHYSICAL WORK THROUGH EMPLOYEE OR DEPLOY ASSETS SINCE IN CARRYING NOT PHYSICAL WORK THROUGH EMPLOYEES OR IN DEPLOYING ASSETS, EXPENDITURE WOULD HAVE TO BE INCURRED BY TH E RECIPIENT. THE BOARD FURTHER CLARIFIED THAT IF THE RECIPIENT WAS ENGAGED IN A BU SINESS OF RENDERING SUCH SERVICES, THE CONSIDERATION RECEIVED FOR THOSE SERVICES WAS T O BE EXCLUDED FROM THE ABOVE DEFINED FEE FOR TECHNICAL SERVICES. THIS FOLLOWED A SIMILAR REFERENCE TO THE CBDTS LATTER CIRCULAR NO. 715 DATED 08.08.1995 DEALING WI TH QUESTION NO.29 AS TO WHETHER A MAINTENANCE CONTRACT INCLUDING SUPPLY OF SPARES WOU LD BE COVERED U/S.194C OF THE ACT WOULD BE COVERED U/S.194C OR 194J OF THE ACT. THE BOARDS ANSWER THERETO CLARIFIED SUCH A CONTRACT INCLUDING SUPPLY OF SHARE S WOULD COME U/S.194C OF THE ACT. IT FURTHER DECLARED THAT SUCH A CONTRACT WOUL D ATTRACT SECTION 194J OF THE ACT IF IT INVOLVED TECHNICAL SERVICES BEING RENDERED BE TH E RECIPIENT. 5. THE ASSESSEE WENT ON QUOTING A CATENA OF JUDICIA L PRECEDENTS IN SEEKING TO COVER ITS AGREEMENT TO IN THE NATURE OF A MAINTENAN CE CONTRACT ALIKE CONSTRUCTION, ASSEMBLY, MINING OR LIKE PROJECT IN THE ABOVE EXPL ANATION TO SECTION 9 (1)(VII) OF THE ACT. IT FURTHER SOUGHT TO HIGHLIGHT ITS RECIPI ENTS SERVICES RENDERED AS FOLLOWS: THE DESIGNATED SERVICES ENVISAGED IN THE RESTATED LOCAL SERVICE AGREEMENT CONTEMPLATES THE FOLLOWING SERVICES TO BE PROVIDED- ITA NOS. 192 TO 196, 235 TO 239 & 456/AHD/15 [M/S. BOMBARDIER TRANSPORTATION INDIA PVT. LTD.] A .YS. 2008-09 TO 2014-15 - 5 - (A) DIRECT LIGHT SERVICES WHICH INCLUDES SERVICE DE SK SERVICES, SERVICE DESK INTERFACE SERVICES, SERVICE DESK PARTITION SET UP, SERVICE DESK RESOLVER GROUP SET UP, SERVICE TRANSACTION CODE (STC) SET UP, AND SERVICE DESK SUPPORT SERVICES; (B) APPLICATION SERVER AND STORAGE SERVICES WHICH I NCLUDES ACTIVE DIRECTORY SERVICES AND COLLABORATIVE SERVICES AND EMAIL SERVI CES; (C) APPLICATION, DEVELOPMENT AND MAINTENANCE SERVIC ES;' (D) TELECOMMUNICATION AND NETWORK SERVICES WHICH IN CLUDES REMOTE ACCESS SERVICE; (E) CROSS FUNCTIONAL SERVICES WHICH INCLUDES LICENS E, MANAGEMENT AND COMPLIANCE; (F) TELECOMMUNICATION BILLING AND FINANCIAL ADMINIS TRATIVE SERVICES; (G) SOFTWARE ORDER FULFILLMENT SERVICES; AND (H) PROJECTS AND TASKS USING LOCAL SUPPLIER OR SUPP LIER'S AGENT RESOURCES. EACH OF THESE SERVICES HAS BEEN DESCRIBED IN DETAIL IN SCHEDULE A OF THE AGREEMENT AND RELATE TO NETWORKING AND OTHER IT RELATED SERVI CES, ESSENTIALLY PROVIDING SUPPORT SERVICES, (COPY OF SAMPLE INVOICE ISSUED BY THE PARTY IS ENCLOSED AS ANNEXURE 9 FOR YOUR READY REFERENCE. AS THIS JUNCTURE IT IS SUBMITTED THAT THE NATURE OF THE ABOVE AGREEMENT IS FOR PROVISION OF 'WORK' AS ENVISAGED, WHICH ADMITTEDLY MAYBE TECHNICAL IN NATURE BUT NOT IN ANY WAY ALTER THE FACT THAT THE CONTRACT IS ESSENTIALLY FOR EXECUTION OF WORK. IN ANY CASE THE DEFINITION OF WORK IS AN INCLUSIVE DEFINITION. THE SERVICES ENVISAGED ARE NOT A SIMPLICITIER CASE OF RENDERING TECHNICAL SERVICES SO AS TO ATTRACT WITHHOLDING TAX PROVISIONS UNDER SECTION 194J OF TH E ACT. MERELY BECAUSE THE SCOPE OF WORK IS TECHNICAL IN NATURE WOULD NOT REND ER THE PROVISIONS OF SECTION 194C INAPPLICABLE. THUS THE CONTRACT SQUARELY GETS COVERED UNDER THE AMBIT OF SECTION 194C AND NOT SECTION 194J IN LIGHT OF VARIO US CASE LAWS AND DEPARTMENTAL CIRCULARS REFERRED TO ABOVE. IN ANY CASE WHERE AN ISSUE RELATING TO THE INTERPRE TATION OF AN AGREEMENT ARISES AND THE SCOPE OF WORK ENVISAGED THEREIN, SHORT DEDU CTION OF TAX CANNOT BE ALLEGED. THE ASSESSEE/DEDUCTOR HAS NOTHING TO GAIN BY SHORT DEDUCTING TAXES SINCE THE PAYMENTS ARE SUBJECT TO WITHHOLDING TAX AT THE APPR OPRIATE RATES. 6. CASE RECORDS INDICATE THAT THE ASSESSEE ALSO PLA CED ON RECORD DETAILS OF THE PAYMENTS MADE TO M/S. CSCIPL ALONGWITH ALL OVER PAY EES. THE ASSESSING OFFICER REJECTED ALL THESE ASSESSEES PLEADINGS IN HIS ABOV ESTATED ORDER IN QUESTION. HE FIRST OF ALL QUOTED HONBLE DELHI HIGH COURTS JUDGMENT I N DIT VS. RIO TINTO TECHNICAL SERVICES 251 CTR 366 (DELHI) THE CRUCIAL EXPRESSION LIKE PROJECT IN SECTION 9(1)(VII) EXPLANATION 2 EXCLUSION CLAUSE HAD TO REA D IN CONJUNCTION WITH CONSTRUCTION PROJECT, ASSEMBLY PROJECT OR A MINING PROJECT AS PER EJUSDEM GENERIS PRINCIPLE. HE THUS OBSERVED THAT NO SUCH DETAILS HAD BEEN CALLED IN PREVIOUS SURVEY QUA THE INTEREST ISSUE. HE THUS D ISTINGUISHED BRITISH AIRWAYS ITA NOS. 192 TO 196, 235 TO 239 & 456/AHD/15 [M/S. BOMBARDIER TRANSPORTATION INDIA PVT. LTD.] A .YS. 2008-09 TO 2014-15 - 6 - CASE LAW (SUPRA) THAT THE SAID ASSESSEE HAD ALREAD Y PAID DIFFERENTIATE TAX AND INTEREST IN QUESTION ALONGWITH AN UNDERTAKING BEING MADE FOR NOT CLAIMING ANY REFUND. THE ASSESSING OFFICER REJECTED ASSESSEES RELIANCE ON GWALIOR RAYON SILK CO. CASE (SUPRA) AS WELL THAT THERE WAS NO EVIDENCE THAT THE PARTYS ESTIMATION OF ITS EMPLOYEES INCOME FOR THE PURPOSE OF TDS DEDUCTION WAS A BONAFIDE ONE WITH AN HONEST BELIEF. THEIR LORDSHIPS WERE STATED TO HAVE UPHOLD TDS LIABILITY IN PRINCIPLE. THE ASSESSING OFFICER THEN VIEWED SECTION 201(1A) I NTEREST TO BE NOT AN ACADEMIC EXERCISE AT ALL. HE OBSERVED THAT ASSESSEES PAYEE WAS NOT ENGAGED IN ANY CONSTRUCTION, ASSEMBLY, MINING OR LIKE PROJECT AT A LL BEING A RAILWAY COACH MANUFACTURER NOR ITS PAYEE WAS ENGAGED IN SUCH ACTI VITIES. IT IS EVIDENT THAT THE ASSESSING OFFICER CONSIDERED MASTER SERVICE AGREEME NT (MSA) BETWEEN ASSESSEES PARENT AND ABOVE PAYEE WHEREIN THE LATTE RS PRESS RELEASE DATED 21.11.2002 AS PER ITS OFFICIAL WEBSITE READ AS UNDE R: 5.1 OVERVIEW & BACKGROUND OF THE MASTER SERVICE AGREEMENT (MSA) BETWEEN COMPUTER SCIENCE CORPORATION (CSC) AND BOMBARDIER T RANSPORTATION (BT): AS PER THE PRESS RELEASE ISSUED ON NOV 21, 2002 BY COMPUTER SCIENCE CORPORATION EXTRACTED FROM ITS WEBSITE: HTTP://WWW.CSC.COM/NEWSROOM/PRESS_RELEASES/2603CSC_ SIGNS_700_MILLION_GLOBAL _OUTSOURCING_ AGREEMENT_WITH_BOMBARDIER_TRANSPORTAT ION 'COMPUTER SCIENCES CORPORATION TODAY ANNOUNCED THAT IT HAS SIGNED AN INFORMATION TECHNOLOGY (IT) OUTSOURCING AGREEMENT W ITH BOMBARDIER TRANSPORTATION, AN OPERATING GROUP OF BOMBARDIER IN C., VALUED AT $700 MILLION ($1.11 BILLION CDN) OVER SEVEN YEARS. UNDER THE TERMS OF THE CONTRACT, CSC WILL PROVIDE D ESKTOP, HELP DESK, CALL CENTER, DATA CENTER, NETWORK AND APPLICATION MANAGEMENT SER VICES TO SUPPORT BOMBARDIER TRANSPORTATION'S RAIL EQUIPMENT MANUFACTURING AND S ERVICES OPERATIONS AT MORE, THAN 200 SITES AROUND THE WORLD. LOCALIZED SERVICE AGREEMENTS WILL BE APPROVED FOLLO WING EMPLOYEE CONSULTATIONS IN ACCORDANCE WITH APPROPRIATE COUNTRY-SPECIFIC PRO CEDURES. APPROXIMATELY 625 EMPLOYEES AND CONTRACTORS ARE EXPECTED TO TRANSFER TO CSC IN FEBRUARY 2003 IN EUROPE, THE -AMERICAS, AUSTRALIA AND ASIA WHEN LOCA L SERVICE AGREEMENTS ARE COMPLETED. 'THIS OUTSOURCING PROJECT IS OF STRATEGIC IMPORTANC E FOR BOMBARDIER TRANSPORTATION,' SAID PIERRE LORTIE, BOMBARDIER TRA NSPORTATION'S PRESIDENT- AND CHIEF- OPERATING OFFICER. 'CSC WILL- WORK WITH US T O DELIVER AN IT TRANSFORMATION. PROGRAM THAT WILL DELIVER A HIGH QUALITY, COST EFFE CTIVE AND SCALABLE IT PLATFORM THAT WILL SUPPORT THE RAPID DEPLOYMENT OF BOMBARDIE R TRANSPORTATION'S BUSINESS DEVELOPMENT PROGRAMS. IMPROVING SERVICE, REDUCING C OSTS AND ENHANCING BUSINESS AGILITY.' ITA NOS. 192 TO 196, 235 TO 239 & 456/AHD/15 [M/S. BOMBARDIER TRANSPORTATION INDIA PVT. LTD.] A .YS. 2008-09 TO 2014-15 - 7 - IN CONSEQUENCE TO THE ABOVE MASTER SERVICE AGREEMEN T (MSA), SIGNED IN 2002, BETWEEN BOMBARDIER TRANSPORTATION (PARENT COMPANY O F BOMBARDIER TRANSPORTATION INDIA LTD) AND COMPUTER SCIENCE CORP ORATION (PARENT COMPANY OF COMPUTER SCIENCE CORPORATION INDIA PVT LTD), LOCAL SERVICE AGREEMENT (LSA) WAS SIGNED IN INDIA IN 2002. LATER, THIS AGREEMENT WAS RENEWED IN JUNE 2008 FOR NEXT 7 YEARS. SOME AMENDMENTS WERE DONE IN 2008 IN THE ORIGINAL MSA OF 2002 AND CONSEQUENTLY LSA IN INDIA WAS ALSO RENEWED FOR 7 YEARS AS WELL. AS P ER THE PRESS RELEASE ISSUED BY CSC ON JUNE 17, 2008 (EXTRACTED FROM HTTP://WWW.CSC .COM/NEWSROOM/PRESS RELEASES/2969CSC AND BOMBARDIER TRANSPORTATION SIGN 1 2 BILLION 765 MILLION IT OUTSOURCING AGREEMENT):- 'CSC ANNOUNCED TODAY THAT IT HAS RENEWED ITS INFORM ATION TECHNOLOGY (IT) OUTSOURCING AGREEMENT WITH BOMBARDIER TRANSPORTATIO N, AN OPERATING GROUP OF BOMBARDIER INC. THE NEW SEVEN-YEAR, $1.2 BILLION ( 765 MILLION) CONTRACT, WHICH HAS AN INCREMENTAL VALUE OF APPROXIMATELY $944 MILL ION (610 MILLION), IS AN EXTENSION AND EXPANSION OF SERVICES THAT BEGAN UNDE R A 2002 CONTRACT THAT WAS VALUED AT $700 MILLION OVER SEVEN YEARS. UNDER THE NEW AGREEMENT, CSC WILL CONTINUE TO PROVI DE BOMBARDIER TRANSPORTATION WITH A FULL RANGE OF INFRASTRUCTURE OUTSOURCING SERVICES. THESE INCLUDE DESKTOP, SERVICE DESK, NETWORK AND APPLICAT ION MANAGEMENT SERVICES FOR MORE THAN 20,000 USERS AT SITES ACROSS 33 COUNTRIES AROUND THE WORLD. IN ADDITION, CSC WILL NOW PROVIDE OVERALL INTEGRATION FOR SERVIC E TICKET TRACKING AND REPORTING, WHICH WILL ENABLE END-TO-END SERVICE MANAGEMENT ACR OSS BOMBARDIER'S IT ENVIRONMENT. 'THIS RENEWED AGREEMENT WITH CSC WILL ENSURE THAT O UR EMPLOYEES HAVE QUALITY IT SERVICES AND SUPPER, 24 HOURS A DAY, 365 DAYS A YEAR FROM ANYWHERE IN THE WORLD,' SAID ANDRE NAVARRI, PRESIDENT OF BOMBARDIER TRANSPORTATION.' 7. THE ASSESSING OFFICER ALSO EXAMINED RELEVANT CLA USES IN ASSESSEES LOCAL SERVICE AGREEMENT (LSA) AS WELL TO CONCLUDE THAT IT S PAYEES SERVICES AMOUNTED TO BE IN FULL SPECTRUM OF INFORMATION TECHNOLOGY OUTSO URCING SERVICES IN THE NATURE OF TECHNICAL, MANAGERIAL AND CONSULTANCY SERVICES INST EAD OF AN ANNUAL MAINTENANCE CONTRACT SIMPLICITOR COVERED U/S.194C OF THE ACT. ALL THE SAID REASONING RESULTED IN THE IMPUGNED DEMAND BEING RAISED AMOUNTING TO RS.1, 15,06,510/- QUA M/S. CSCIPL THEREBY HOLDING THE DEDUCTOR ASSESSEE TO BE AN ASSESSEE IN DEFAULT. 8. THE CIT(A) CONFIRMS ASSESSING OFFICERS ACTION A S UNDER: 4.2 I HAVE GIVEN MY CAREFUL CONSIDERATION TO THE F ACTS OF THE CASE AS WELL AS THE OBSERVATION OF THE AO AND THE SUBMISSION OF THE AR. BEFORE CONSIDERING THE FACTS ITA NOS. 192 TO 196, 235 TO 239 & 456/AHD/15 [M/S. BOMBARDIER TRANSPORTATION INDIA PVT. LTD.] A .YS. 2008-09 TO 2014-15 - 8 - OF THE CASE, IT WILL BE USEFUL TO NOTE THAT 'PROFES SIONAL SERVICES' FOR THE PURPOSE OF SECTION 194J HAVE BEEN DEFINED AS UNDER IN THE EXPLANATION TO THE SECTION 194J:- PROFESSIONAL SERVICES' MEANS SERVICES RENDERED BY A PERSON IN THE COURSE OF CARRYING ON LEGAL, MEDICAL, ENGINEERING OR ARCHITEC TURAL PROFESSION OR THE PROFESSION OF ACCOUNTANCY OR TECHNICAL CONSULTANCY OR INTERIOR DECORATION OR ADVERTISING OR SUCH OTHER PROFESSION AS IS NOTIFIED BY THE BOARD FOR THE PURPOSE OF SECTION 44AA OR OF THIS SECTION. SIMILARLY, 'FEES FOR TECHNICAL SERVICES' HAS BEEN D EFINED TO HAVE SAME MEANING AS IN EXPLANATION 2 TO CLAUSE (VII) OF SUB SECTION (1) OF SECTION 9. EXPLANATION 2 TO CLAUSE (VII) OF SUB SECTION (1) OF SECTION 9 IS REP RODUCED HEREUNDER: - EXPLANATION 2 - FOR THE PURPOSES OF THIS CLAUSE, 'F EES FOR TECHNICAL SERVICES' MEANS ANY CONSIDERATION (INCLUDING ANY LUMP SUM CON SIDERATION) FOR RENDERING OF ANY MANAGERIAL, TECHNICAL OR CONSULTANCY SERVICE S (INC1UDING THE PROVISION OF SERVICES OF TECHNICAL OR OTHER PERSONNEL) BUT DOES NOT INCLUDE CONSIDERATION FOR ANY CONSTRUCTION, ASSEMBLY, MINING OR LIKE PROJECT UNDERTAKEN BY THE RECIPIENT OR CONSIDERATION WHICH WOULD BE INCOME OF THE RECIPIEN T CHARGEABLE UNDER THE HEAD SALARIES. NOW LET US EXAMINE THE VARIOUS AGREEMENTS ENTERED I NTO BY THE APPELLANT IN LIGHT OF THE ABOVE PROVISIONS OF THE ACT: - AGREEMENT WITH COMPUTER SCIENCE CORPORATION INDIA P RIVATE LIMITED(CSCIPL) TO UNDERSTAND THE NATURE OF AGREEMENT OF THE APPELL ANT WITH THE COMPUTER SCIENCE CORPORATION INDIA PRIVATE LIMITED (CSCIPL) IT WILL BE USEFUL TO QUOTE THE PRESS RELEASES OF COMPUTER SCIENCES CORPORATION (CSC) WHI CH IS THE PARENT COMPANY OF CSCIPL WITH THE BOMBARDIER TRANSPORTATION (BT) THE PARENT COMPANY OF BOMBARDIER TRANSPORTATION INDIA LTD. (BTIL) WHICH H AS BEEN QUOTED THE ASSESSMENT ORDER ON PAGE 6 AND 7. PRESS RELEASE NOV 21,2002 'COMPUTER SCIENCES CORPORATION TODAY ANNOUNCED THAT IT HAS SIGNED AN INFORMATION TECHNOLOGY(IT) OUTSOURCING AGREEMENT WI TH BOMBARDIER TRANSPORTATION, AN OPERATING GROUP OF BOMBARDIER IN C., YEAR IN VALUED AT $700 MILLION ($1.11 BILLION CDN) OVER SEVEN YEARS. UNDER THE TERMS OF THE CONTRACT, CSC WILL PROVIDE DESKTOP, HELP DESK, CALL CENTRE, DATACENTRE, NETWORK AND APPLICATION MANAGEMENT SERV ICES TO SUPPORT BOMBARDIER TRANSPORTATION'S RAIL EQUIPMENT MANUFACT URING AND SERVICES OPERATION AT MORE THAN 200 SITES AROUND THE WORLD. .. THIS OUTSOURCING PROJECT IS OF STRATEGIC IMPORTANC E FOR BOMBARDIER TRANSPORTATION, SAID PIERRE LORTIE, BOMBARDIER TRAN SPORTATION'S PRESIDENT AND ITA NOS. 192 TO 196, 235 TO 239 & 456/AHD/15 [M/S. BOMBARDIER TRANSPORTATION INDIA PVT. LTD.] A .YS. 2008-09 TO 2014-15 - 9 - CHIEF OPERATING OFFICER. 'CSC WILL WORK WITH US TO DELIVER AN IT TRANSFORMAT ION PROGRAM THAT WILL DELIVER A HIGH QUALITY, COST-EFFE CTIVE AND SCALABLE IT PLATFORM THAT WILL SUPPORT THE RAPID DEPLOYMENT OF BOMBARDIE R TRANSPORTATIONS BUSINESS DEVELOPMENT PROGRAMS, IMPROVING SERVICE REDUCING CO STS AND ENHANCING BUSINESS AGILITY. THE EARLIER AGREEMENT WAS RENEWED IN JUNE 2008 AND PRESS RELEASE DATED JUNE 17, 2008 STATED AS UNDER:- . ... UNDER THE NEW AGREEMENT, CSC WILL CONTINUE TO PROVIDE BOMBARDIER TRANSPORTATION WITH A FULL RANGE OF INFRASTRUCTURE OUTSOURCING SERVICES. THESE INCLUDE DESKTOP, SERVICE DESK/ NETWORK AND APPLICAT ION MANAGEMENT SERVICES FOR MORE THAN 20,000 USERS AT SITES ACROSS 33 COUNTRIES AROUND THE WORLD. IN ADDITION, CSC WILL NOW PROVIDE OVERALL INTEGRATION FOR SERVIC E TICKET TRACKING AN REPORTING, WHICH WILL ENABLE END-TO-END SERVICE MANAGEMENT ACR OSS BOMBARDIER'S IT ENVIRONMENT' FROM THE READING OF ARTICLE 3 OF THE AGREEMENT QUOT ED BY THE AO ON PAGES 7- 9 OF THE ORDER AND ARTICLE 4 OF THE AGREEMENT QUOTED ON PAGES 9-12 OF THE ORDER IS CLEAR THAT THE AGREEMENT IS NOT ONLY FOR PROVIDING IT CON SULTANCY, IT IS ALSO FOR PROVIDING ENTIRE IT INFRASTRUCTURE (DESKTOPS, LAPTOPS, PRINTE RS, LAN,WAN, DATA STORAGE, FACILITIES-SERVERS ETC) AND SUPPORT SERVICES TO THE APPELLANT COMPANY. THIS FACT IS ALSO SUPPORTED BY THE COPY OF BILL RAISED BY CSCIPL FILED BY THE APPELLANT BEFORE THE AO. THOUGH THE AGREEMENT IS ABOUT PROVIDING A B UNDLE OF SERVICES- INFRASTRUCTURE, INFRASTRUCTURE SUPPORT, SOFTWARE CO NSULTANCY AS WELL AS SOFTWARE SUPPORT SERVICES FOR A WHOLE RANGE OF ACTIVITIES OF THE APPELLANT, PROVIDING OF INFRASTRUCTURE IS A SMALL PART OF TOTAL CONTRACT AN D IT IS THE FEES TECHNICAL SERVICES WHICH DOMINATE THE CONTRACT. THE SERVICES ARE TO BE PROVIDED BY QUALIFIED SOFTWARE PROFESSIONALS AND ARE TO BE CONSTANTLY UPGRADED TO KEEP PACE WITH THE CHANGING TECHNOLOGY. CSCIPL IS RESPONSIBLE FOR PROVIDING CON SISTENT AND HIGH LEVELS OF IS SUPPORTS TO THE BTIL BY IMPLEMENTING GLOBAL STANDAR D PROCESSES AND DEPLOYING STANDARD TECHNOLOGIES AND BEST PRACTICES AND IT IS REQUIRED TO EMPLOY INDUSTRY BEST PRACTICES, ELIMINATE RESOURCE, EFFORT AND TECHNOLOG Y DUPLICATION AND OPTIMISE PROCESSES BY LEVERAGING OF ITS GLOBAL MANAGEMENT CE NTRES, DATA CENTRES, SERVICE DESKS, REGIONAL OFFICES, GLOBAL COMPETENCY CENTRES, INTEGRATED GLOBAL NETWORKS, THIRD-PARTY AGREEMENTS, BEST PRACTICES (INCLUDING C ATALYST), QA/QC PROCESSES, GLOBALLY STANDARD PROCESSES AND INTEGRATED TOOLS. T HE WORK TO BE DONE BY CSCIPL IS HIGHLY TECHNICAL IN NATURE AND PAYMENT MADE TO I T CANNOT BE SAID TO BE FOR ANY CONSTRUCTION, ASSEMBLY, MINING ARE LIKE PROJECT UND ERTAKEN BY IT. THEREFORE, IN VIEW OF THE DECISION IN THE CASE OF RIO TINTO TECHN ICAL SERVICES QUOTED BY THE AO IN THE ASSESSMENT ORDER, PAYMENT MADE TO CSCIPL HAS TO BE TERMED AS FEES FOR TECHNICAL SERVICES ONLY. SO FAR AS THE DECISION OF ITAT, MUMBAI IN THE CASE OF STCI COMMODITIES LTD VS ACIT 147 ITD 696 QUOTED BY THE APPELLANT IN PARA-23 OF THE SUBMISSION IS CONCERNED, THE OBSERVATIONS OF HONOURABLE TRIBUNAL ARE ONLY IN A PASSING REFERENCE AND DIFFERENCE BETWEEN 'CONTRACT FOR TECHNICAL SERV ICES' AND 'CONTRACT FOR WORK' WAS NOT THE SUBJECT MATTER OF THE APPEAL. THE ISSUE UNDER APPEAL WAS WHETHER THE ITA NOS. 192 TO 196, 235 TO 239 & 456/AHD/15 [M/S. BOMBARDIER TRANSPORTATION INDIA PVT. LTD.] A .YS. 2008-09 TO 2014-15 - 10 - PAYMENT MADE BY THE APPELLANT TO A CERTAIN PARTY WA S DISALLOWABLE UNDER SECTION 40(A)(IA) OF THE IT ACT. 9. THE ASSESSEE FIRST OF ALL SUBMITS THAT ITS PAYEE IN QUESTION PERFORMED ANNUAL MAINTENANCE CONTRACT ONLY WHEREIN THE ASSESSEE HAS OUTSOURCED WHOLE OF ITS INFORMATION TECHNOLOGY AND RELATED SERVICES TO M/S. CSCIPL AS PER ITS LOCAL SERVICES AGREEMENT LSA IN TUNE WITH ITS MASTER SE RVICES AGREEMENT MSA WITH ITS PARENT DATED 21.11.2002 AS AMENDED FROM TIME TO TIME. MR. MEHTA TAKES US TO PAPER BOOK CONTRACT COMPRISING OF THE RELEVANT VOUC HERS OF PAYMENTS, SPECIFIED SERVICES AVAILED BUT CORRESPONDING BILLING PARTICUL ARS. HE VEHEMENTLY CONTENDED THE SAME WOULD IN NO WAY AMOUNT TO FEE FOR TECHNICA L OR PROFESSIONAL SERVICES. HIS CASE IS THAT THE ASSESSEE HAS BEEN OUTSOURCING ITS ALL IT RELATED SERVICES TO M/S. CSCIPL ON CONTRACTUAL BASIS ATTRACTING TDS DEDUCTIO N @ 2% ONLY BEING CONTRACTUAL OR RENTAL PAYMENTS THAN FEE FOR TECHNIC AL SERVICES ATTRACTING TDS @10% U/S. 194J OF THE ACT. HIS CASE THEREFORE IS THAT S ECTION 194J R.W.S. 9(1)(VII) EXPLANATION 2 APPLIES IN CASE OF A CONSULTANCY AGRE EMENT ALIKE SITUATION INSTEAD OF FACT OF THE INSTANT CASE WHEREIN THE PAYER AND PAYE E ENGAGE IN AN AGREEMENT OF TECHNICAL CONSULTANCY SERVICES IN LIEU OF LUMP SUM PAYMENT. CASE LAW (2016) 159 ITD 743 (MUM-TRIB) ITO VS. FINO FINTECH FOUNDATION IS QUOTED HOLDING THAT SECTION 194J APPLIES ONLY IN CASE OF ANY MANAGERIAL , TECHNICAL OR CONSULTANCY SERVICES BEING RENDERED INSTEAD OF MERE USE OF TECH NOLOGY. NEXT JUDICIAL PRECEDENCE CITED IS (2014) 147 ITD 696 (MUM-TRIB) S TCI COMMODITIES LTD. V. ACIT DENYING APPLICATION OF SECTION 194J OF THE ACT WHEREIN THE PAYER/SUBSIDIARY HAD SIGNED AN MOU UNIT ITS HOLDING ENTITY FOR PROVI DING SKILLED PROFESSIONALS, EACH OFFICE SUPPORT, SOFTWARE, HARDWARE AND OTHER INFRAS TRUCTURE IN LIEU OF PAYMENT OF SERVICES CHARGES. THE ABOVE CO-ORDINATE BENCH TREA TED THE SAID MANAGEMENT TO BE A CONTRACT U/S.194C OF THE ACT NOT ATTRACT SECTION 40 (A)(IA). LEARNED COUNSEL THEN RELIES UPON SECTION 9(1)(VII) EXPLANATION 2 CONTAIN ING EXCLUSION THEREOF CONTAINING THE FOLLOWING EXPRESSION BUT DOES NOT INCLUDE CONSI DERATION FOR ANY CONSTRUCTION, ASSEMBLY, MINING OR LIKE PROJECT CONSIDERATION BY T HE RECIPIENT OR CONSIDERATION WHICH WOULD BE INCOME OF THE RECIPIENT CHARGEABLE U NDER THE HEAD SALARIES. HE THEN REITERATES THAT THE DEFINITION OF TECHNICAL SE RVICES IS THE ABOVE DEFINITION CLAUSE ITA NOS. 192 TO 196, 235 TO 239 & 456/AHD/15 [M/S. BOMBARDIER TRANSPORTATION INDIA PVT. LTD.] A .YS. 2008-09 TO 2014-15 - 11 - IS VERY MUCH AN INCLUSIVE ONE. IT IS NOT ATTRACTE D IN FACTS OF THE INSTANT CASE AS IT INVOLVES AN INSTANCE WHEREIN THE PAYEE/CSCIPL HAS R ECEIVED HIS IMPUGNED PAYMENT A CONTRACTUAL OBJECTIVE WHICH NOWHERE INVOL VES ANY MANAGERIAL, TECHNICAL OR CONSULTANCY SERVICES. 10. LEARNED COUNSEL CONTINUES TO JUSTIFY ASSESSEES SAID ADOPTED THROUGHOUT THAT IT HAD BEEN RIGHTLY TREATING THE ABOVE PAYMENT AS C ONTRACTUAL ONE OR AT THE BEST IN THE NATURE OF RENT REQUIRING TDS DEDUCTION @ 2% U/S .194C AND 194I WHICH STOOD ACCEPTED IN THE PAST AS WELL. HE THEREFORE SEEKS O UR INDULGENCE FOR DELETING THE IMPUGNED DEMAND. LEARNED COUNSEL THEREAFTER QUESTI ONS CORRECTNESS OF BOTH THE LOWER AUTHORITIES IN CHARGING SECTION 201(1A) INTE REST IN SOME OF THE ABOVE CASES (SUPRA) ON THE GROUND THAT THE SAME INVOLVE AN INST ANCE WHEREIN NO ORDER U/S.201(1) HAS BEEN PASSED NECESSITATING THE IMPUGNED INTEREST LEVY. MR. MEHTA THEREFORE VEHEMENTLY PLEADS FOR ACCEPTANCE OF THE INSTANT APP EALS. 11. LEARNED SENIOR DEPARTMENTAL REPRESENTATIVE SHRI V. K. SINGH REPRESENTING REVENUE STRONGLY SUPPORTS TO BE THE LOWER AUTHORITI ES IDENTICAL ACTION(S) IN INVOKING SECTION 201(1) & 201(1A) DEMANDS IN QUESTI ON AFTER HOLDING ASSESSES PAYMENTS MADE TO CSCIPL AS PER THE TECHNICAL SERV ICES RESULTING 10% RATE OF TDS DEDUCTION U/S.194J THAN @ 2% U/S.194C OR 194J OF THE ACT. 12. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO R IVAL SUBMISSIONS. CASE FILE(S) PERUSED. THERE CAN HARDLY BE ANY DISPUTE T HAT THE SOLE QUESTION BEFORE US IS WHETHER OR NOT ASSESSEES IMPUGNED PAYMENTS MADE TO THE PAYEE CSCIPL ALREADY SUBJECTED TO TDS DEDUCT @ 2%; AMOUNT ARE TO BE TREATED AS FEE FOR TECHNICAL SERVICES TO BE ASCERTAINED ON THE BASIS O F THEIR CONTRACTUAL TERMS ONLY AS INCORPORATED IN THE BI-PARTITE AGREEMENT IN QUESTIO N. PAGE 37 IN ASSESSEES PAPERBOOK CONTAINS RELEVANT VOUCHERS FOLLOWED BY A WELL DOCUMENTED LOCAL SERVICES AGREEMENT LSA. IT IS AN UNDISPUTED FACT THAT THIS LSA HAS BEEN EXECUTED AS PER THE MASTER SERVICES AGREEMENT MSA (SUPRA) BETWEEN ASSESSEE'S PARENT AND THE VERY PAYEE. WE NOTICE THAT THIS MSA IS BASIC FOUNDATION WHICH NOWHERE FORMS PART OF THE CASE FILE. NOR HAS THE A SSESSEE PLACED IT ON LOWER ITA NOS. 192 TO 196, 235 TO 239 & 456/AHD/15 [M/S. BOMBARDIER TRANSPORTATION INDIA PVT. LTD.] A .YS. 2008-09 TO 2014-15 - 12 - AUTHORITIES RECORD. THE ABOVE FOLLOWING LSA AIM ED TO REGULATE NECESSARY TERMS OF INFORMATION TECHNOLOGY AND RELATED SERVICES TO B E RENDERED BY THE PAYEE IN LIEU OF ASSESSEES PAYMENTS. THE ASSESSEE IS FAIR ENOUG H IN NOT DISPUTING THE FACT THAT IT HAS NOT HANDLED OR OPERATED EVEN A FRACTION OF SERV ICES ON ITS OWN THROUGHOUT ALL THESE ASSESSMENT YEARS. IT SEEKS TO TAKE REFUGE UND ER THE CONTRACTUAL FORMAT ON THE OTHER HAND TO COME OUT OF RIGOR OF SECTION 194J OF THE ACT. WE ARE OF THE OPINION THAT IT IS NOT THE MEDIUM OF CONTRACT OR PAYMENT BU T THE NATURE OF SERVICES RENDERED BY THE PAYEE WHICH IS THE CRUCIAL FACTOR TO DETERMI NE WHETHER OR NOT THEY AMOUNT TO TECHNICAL OR PROFESSIONAL SERVICES. THE ASSESSEE C ANNOT SUCCEED IN TREATING ITS PAYMENTS U/S.194C BY TAKING RECOURSE TO A WRITTEN C ONTRACT DOCUMENT. MORE PARTICULARLY WHEN IT HAS COME ON RECORD THE PAYEE I TSELF HAD BEEN ISSUING PRESS RELEASE(S) ALIKE THE ONE ALREADY EXTRACTED HEREINAB OVE. THE ASSESSEE HAS NOT MADE EVEN A SINGLE ATTEMPT IN THE COURSE OF HEARING TO R EBUT THE SAME. WE THEREFORE OBSERVE THAT ITS RECIPIENTS INFORMATION TECHNOLOGY RELATED INTEGRATED SERVICE ACTIVITIES AMOUNT TO TECHNICAL SERVICES ONLY. THE ASSESSEES RELIANCE ON ITS ITEMIZED BILLINGS OF THE ABOVE SERVICES IN CLASSIFYING THE S AME AS BUNDLED PAYMENTS/SERVICES CANNOT BE ACCEPTED IN VIEW OF THE FORGOING DISCUSSI ON THAT IT IS THE RECIPIENT ONLY WHO IS WHOLLY RESPONSIBLE FOR HANDLING / PROVIDING ALL INFORMATION TECHNOLOGY RELATED SERVICES. 13. WE ALSO DEEM IT APPROPRIATE TO OBSERVE THAT HON BLE DELHI HIGH COURTS JUDGMENT DIT VS. RIO TINTO TECHNICAL SERVICES 251 C TR 366 (DELHI) HAS HELD THAT THE ABOVE EXCLUSION CLAUSE IN SECTION 9(1)(VII) EXP LANATION 2 IS TO BE READ AS A PROJECT IN THE NATURE OF CONSTRUCTION, ASSEMBLY, MI NING ONLY. WE THUS REJECT ASSESSEES ARGUMENT SEEKING TO INVOKE THE ABOVE EXC LUSION CLAUSE U/S.9(1)(VII) EXPLANATION 2 OF THE ACT. 14. WE FIND NO MERIT IN ASSESSEES NEXT ARGUMENT OF HAVING ACTED IN BONAFIDE BELIEF AS WELL IN DEDUCTING TDS @2% ONLY QUA ITS IM PUGNED PAYMENTS AS BASED ON HONBLE MADHYA PRADESH HIGH COURTS JUDGMENT GWALIO R RAYON SILK CO. LTD. (SUPRA) CASE AS WELL AS ALL THE ABOVESAID FACTS/CIR CUMSTANCES DISCUSSED LEAVE NO DOUBT MUCH LESS FORMATION OF SUCH RELIEF THAT THE P AYEE CSCIPL HAD IN FACT ITA NOS. 192 TO 196, 235 TO 239 & 456/AHD/15 [M/S. BOMBARDIER TRANSPORTATION INDIA PVT. LTD.] A .YS. 2008-09 TO 2014-15 - 13 - RENDERED TECHNICAL SERVICES ONLY REQUIRING TDS DED UCTION U/S.194J OF THE ACT. WE THUS AFFIRM BOTH THE LOWER AUTHORITIES FINDINGS HO LDING THE PAYEE RECIPIENT TO HAVE RENDERED TECHNICAL AND PROFESSIONAL SERVICES. THE ASSESSEES FURTHER PLEA THAT SUCH TECHNICAL SERVICES ARE NOWHERE IN THE NATURE OF CON SULTANCY ONLY IS WITHOUT ANY SUBSTANCE AS THERE IS NO SUCH ISOLATED CONDITION PR OVIDED IN THE ACT WHEREIN ALL THE RELEVANT FACTS AND CIRCUMSTANCES HAVE TO BE APPRECI ATED. 15. WE NOW ADVERT TO ASSESSEES FORMER CASE LAW FIN O FINTECH FOUNDATION (SUPRA). WE FIND THAT RELEVANT FACTS IN THE SAID C ASE INVOLVED WERE CASE OF TECHNOLOGY ONLY INSTEAD OF ANY TECHNICAL SERVICE IN VOLVING HUMAN SERVICE ELEMENT BEING ACTUALLY PERFORMED AT THE RECIPIENTS BEHEST. LATTER CASE LAW OF STCI COMMODITIES (SUPRA) ALSO DOES NOT HELP ASSESSEES C AUSE AS THE RELEVANT AGREEMENT CLAUSES THEREIN DISCUSSED IN PARA 4.1 OF THE ORDER DOES NOT INDICATE ANY TECHNICAL SERVICE BEING RENDERED IN THE ARRAY OF RECIPIENTS OBLIGATIONS. LEARNED COUNSELS PLEA AS PER THE ABOVE CASE LAW THAT LUMP SUM PAYMEN TS MADE FOR AVAILING A BUNDLE OF THE IMPUGNED SERVICES DO NOT ATTRACT 10% TDS DED UCTION U/S.194J OF THE ACT IS ALSO WITHOUT ANY MERIT AS PER ABOVE DEFINITION PROV ISION IN THE NATURE OF AN INCLUSIVE ONE SPECIFICALLY INCLUDING SUCH A LUMP SU M INSTANCE IN EXPLANATION 2, SECTION 9(1)(VII) OF THE ACT. THE ASSESSEES RELIA NCE ON THE ABOVE LATTER CASE LAW IS THEREFORE DECLINED. 16. THIS LEAVES US WITH MR. MEHTAS LAST VEHEMENT C ONTENTION THAT SECTION 201(1A) INTEREST LEVIED IN SOME OF THE CASES IS NOT SUSTAINABLE IN ABSENCE OF ANY SECTION 201(1) ORDERS BEING PASSED TO THIS EFFECT. THIS ARGUMENT ALSO FAILS TO CONVENIENCE US AS SECTION 201(1A) STARTS WITH WIT HOUT PREJUDICE TO THE PROVISION OF SUB-SECTION (1) . MR. MEHTA HAS NOT QUOTED ANY JUDICIAL PRECEDENT AT ALL WHICH COULD TAKE US TO SUCH A CONCLUSION IN ASSESSEES FA VOUR. THE ASSESSEE THEREFORE FAILS IN ITS LAST ARGUMENT AS WELL AS IN ITS LEAD APPEAL ITA NO.196/AHD.2015. ALL OF ITS NINE REMAINING APPEALS ARE THEREFORE REJECTED. 17. WE NOW ADVERT TO REVENUES APPEAL ITA NO.456/AH D/2014 FOR ASSESSMENT YEAR 2014-15 SEEKING TO REVIVE THE ASSESSING OFFICE RS ACTION TREATING THE ASSESSEE ITA NOS. 192 TO 196, 235 TO 239 & 456/AHD/15 [M/S. BOMBARDIER TRANSPORTATION INDIA PVT. LTD.] A .YS. 2008-09 TO 2014-15 - 14 - IN DEFAULT QUA ITS IMPUGNED PAYMENTS MADE TO THE TW O PAYEES NAMELY M/S. ARADHANA INDIAN ENGINEERING WORKS (AEW) AND COMMTEL NETWORKS PVT. LTD. (CNPL). THE CIT(A) REVERSES THE ABOVE FINDINGS AS FOLLOWS: 5.4 SINCE THE FACTS AND THE CIRCUMSTANCES OF THE P RESENT CASE ARE SIMILAR TO THE FACTS AND CIRCUMSTANCES OF THE ASSESSEES CASE FOR A.Y. 2012-13, THE ISSUE IS SQUARELY COVERED BY THE DECISION OF CIT(A)-V, BAROD A IN ASSESSEES OWN CASE IN A.Y. 2012-13 IN CAB/(A)V-122/14-15. FOLLOWING THE SAME, IT IS HELD THAT THE APPELLANT WAS JUSTIFIED IN DEDUCTING TAX AT SOURCE IN RESPECT OF ARADHANA INDIAN ENGINEERING WORKS (AEW) AND COMMTEL NETWORKS PVT. L TD. (CNPL) UNDER SECTION 194C OF THE IT ACT AND FINDING OF THE AO THAT THE A PPELLANT WAS REQUIRED TO DEDUCT TAX AT SOURCE UNDER SECTION 194J OF THE IT ACT IS S ET ASIDE IN RESPECT OF THIS PAYEE WHEREAS FINDING OF THE ASSESSING OFFICER THAT THE A PPELLANT WAS REQUIRED TO DEDUCT TAX AT SOURCE UNDER SECTION 194J OF THE IT ACT IS U PHELD IN RESPECT OF THE PAYMENTS TO COMPUTER SCIENCE CORPORATION INDIA PRIVATE LIMIT ED (CSCIPL). IN VIEW OF THE ABOVE DISCUSSION, THESE GROUNDS OF APPEAL ARE PARTL Y ALLOWED. THE ASSESSEE PARTLY SUCCEEDS ON THESE GROUNDS OF APPEAL. 5.5 DURING THE COURSE OF THE APPELLATE PROCEEDINGS, THE ASSESSEE HAS ALSO SUBMITTED THAT IN THIS CASE, THE ORDER U/S 201(1) W AS PASSED FOR THE FIRST TWO QUARTERS OF THE YEAR AND SINCE THE RELEVANT FINANCI AL YEAR I.E. F.Y. 2013-14 WAS NOT COMPLETE AND THE TIME LIMIT AVAILABLE TO THE ASSESS EE UNDER PROVISO TO SECTION 201 (1) HAD NOT ELAPSED, THE ASSESSING OFFICER COULD NO T HAVE TREATED THE ASSESSEE AS 'ASSESSEE IN DEFAULT'. IT FURTHER SUBMITTED THAT, S INCE THE TIME LIMIT FOR FILING THE RETURN IS YET NOT EXPIRED, IT CANNOT FURNISH RELEVA NT EVIDENCE AT THIS POINT OF TIME, TO PROVE ITS CASE UNDER PROVISO TO SECTION 201 (1) -OF THE ACT. THE ASSESSEE SUBMITTED THAT IT WILL FACE UNDUE HARDSHIP BECAUSE OF NON AVA ILABILITY OF RETURN OF INCOME OF THE PAYEES AND THE REQUIRED CERTIFICATE SHOWING THA T THE RELEVANT INCOME HAD BEEN ACCOUNTED FOR. IN VIEW OF THE ABOVE, IT REQUESTED T O DIRECT THE ASSESSING OFFICER TO GIVE QUANTUM RELIEF TO THE ASSESSEE AS PER PROVISIO NS OF PROVISO TO SECTION 201(1), IF THE ASSESSEE FURNISHED NECESSARY EVIDENCE BEFORE THE ASSESSING OFFICER ESTABLISHING THAT IT FULFILLS THE CONDITIONS PRESCR IBED IN THE PROVISO TO SECTION 201(1). I FIND CONSIDERABLE FORCE IN THE ARGUMENTS OF THE ASSESSEE. SINCE THE DUE DATE FOR FILING THE RETURN IS YET TO EXPIRE AND PRE SUMABLY THE RETURNS BY THE PAYEES ARE YET TO BE FILED, THE ASSESEE CANNOT FURNISH REL EVANT EVIDENCE SHOWING THAT THE RECIPIENTS HAVE TAKEN IN TO ACCOUNT THE AMOUNT RECE IVED IN THEIR INCOME AND HAVE PAID DUE TAXES ON THE SAME. THE ASSESSEE CANNOT BE ASKED TO DO THE IMPOSSIBLE AND DENIAL OF THIS REQUEST WILL UNNECESSARILY LEAD TO H ARDSHIP AID LITIGATION. PAST HISTORY OF THE ASSESSEE ALSO SUGGESTS THAT IN A.Y. 12-13 AND 13-14, THE ASSESSEE HAD FURNISHED NECESSARY EVIDENCE IN THIS REGARD BEFORE CIT(A) AND THE ASSESSEE WAS ALLOWED RELIEF, RELYING ON THE PROVISO TO SECTION 2 01 (1) OF THE ACT. CONSIDERING ALL THE ASPECTS OF THE CASE, THE DECISION OF ITAT, DELH I IN ITO VS AMITY INTERNATIONAL SCHOOL, [2014 ] 48 TAXMANN.COM 173 (DELHI - TRIB.) AND IN VIEW OF THE ABOVE DISCUSSION, THE ASSESSING OFFICER IS DIRECTED TO CO NSIDER ASSESSEE'S ELIGIBILITY FOR RELIEF UNDER FIRST PROVISO TO SECTION 201 (1) AFTER AFFORDING IT AN OPPORTUNITY OF BEING HEARD ANTI IF THE ASSESSEE IS FOUND TO HAVE F ULFILLED THE CONDITIONS REQUIRED UNDER PROVISO TO SECTION 201 (1), APPROPRIATE RELIE F WILL BE ALLOWED TO IT. ITA NOS. 192 TO 196, 235 TO 239 & 456/AHD/15 [M/S. BOMBARDIER TRANSPORTATION INDIA PVT. LTD.] A .YS. 2008-09 TO 2014-15 - 15 - 18. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO R IVAL SUBMISSIONS. IT HAS COME ON RECORD THAT THE ASSESSEE HAS ALREADY SUCCEE DED ON THE VERY ISSUE IN ASSESSMENT YEAR 2012-13. THE REVENUE FAILS TO REBU T THE FACT THAT THE SAID FINDINGS HOLDING THE ASSESSEE TO HAVE DEDUCTED TDS ONLY U/S. 194C OF THE ACT HAS ALREADY ATTAINED FINALITY. LEARNED DEPARTMENTAL REPRESENTA TIVE IS UNABLE TO REFER TO ANY COGENT EVIDENCE ON RECORD TAKING US TO A DIFFERENT CONCLUSION ON FACTS AS WELL. WE THEREFORE DECLINE REVENUES SOLE SUBSTANTIVE GROUND AS WELL AS MAIN APPEAL ITA NO.456/AHD/2015. 19. THESE TEN ASSESSEES APPEALS AND REVENUES SOLE APPEAL ARE THEREFORE DISMISSED. [PRONOUNCED IN THE OPEN COURT ON THIS THE 20 TH DAY OF DECEMBER, 2017.] SD/- SD/- ( PRADIP KUMAR KEDIA ) (S. S. GODARA) ACCOUNTANT MEMBER JUDICIAL M EMBER AHMEDABAD: DATED 20/12/2017 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- / REVENUE 2 / ASSESSEE ! ! ' / CONCERNED CIT 4 ! ! '- / CIT (A) ) *+,! -.. , ! ! , /0 / DR, ITAT, AHMEDABAD 1 ,23 45 / GUARD FILE. BY ORDER / , //! ! ! , /0