ITO, Ward - 59(2), Kolkata, Kolkata V. M/s. Suraksha Diagnostic & Eye Centre Pvt. Ltd., Kolkata

ITA 2121/KOL/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 54779 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 1 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-12-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2000-2001
• Appeal Filed On: 25-11-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K PRAMANICK
• Assessee Lawyers: N M BHANSALI A R
• Keywords: Non-deduction of tax; TDS
• Section: 133A; 201(1)

Judgement Text

, ' , , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : KOLKATA ( ) . . , , , , , , ) [BEFORE SRI S.V. MEHROTRA, A.M. & SRI MAHAVIR SING H, J.M.] ! ! ! ! / I.T.A NO. 2121/KOL/2010 ASSESSMENT YEAR : 2000-2001 INCOME TAX OFFICER, WARD-59(2), KOLKATA -VS.- M/S. SURAKSHA DIAGNOSTIC & EYE CENTRE PVT. LTD., KOLKATA (PAN : AAEC S 6325 F) ( '# /APPELLANT ) ( $%'# / RESPONDENT ) FOR THE APPELLANT ( '# ) : SHRI A.K. PRAMANICK, D.R. FOR THE RESPONDENT ( $%'# ) : SHRI N.M. BHANSALI, A.R. &' ( ) * &' ( ) * &' ( ) * &' ( ) * /DATE OF HEARING : 21.12.2011 +, ) * +, ) * +, ) * +, ) * /DATE OF PRONOUNCEMENT : 28.12.2011 - / ORDER PER SHRI S.V. MEHROTRA, ACCOUNTANT MEMBER/ . . , :- THIS APPEAL FILED BY THE REVENUE IS AGAINST THE OR DER OF LD. COMMISSIONER OF INCOME- TAX (APPEALS)-XXXVI, KOLKATA DATED 15.09.2010 FOR T HE ASSESSMENT YEAR 2000-01. 2. BRIEF FACTS OF THE CASE ARE THAT A SURVEY WAS CO NDUCTED UNDER SECTION 133A ON 04.11.2003 AT THE PREMISES OF THE ASSESSEE. DURING SURVEY, DISCREPANCIES RELATING TO NON- DEDUCTION/SHORT DEDUCTION AND LATE DEPOSIT OF TAX D UCTED AT SOURCE FOR THE FINANCIAL YEAR 200-01 WERE NOTICED. IT WAS NOTICED THAT THERE WERE DISCRE PANCIES ON ACCOUNT OF NON-DEDUCTION OF TAX AT SOURCE FOR THE FINANCIAL YEAR 2000-01 ON ACCOUNT OF PROFESSIONAL CHARGES UNDER SECTION 194J UNDER THE HEADS COMPUTER SOFTWARE EXPENSES AND S AMPLE TESTING CHARGES PAID TO M/S. THEMA TECH AND M/S. MIRACLES INFERTILITY & GENETIC RESEARCH PVT. LTD. RESPECTIVELY. THE ASSESSEE EXPLAINED THAT OUT OF RS.36,56,580/-, A SU M OF RS.29,92,500/- HAD BEEN PAID FOR PURCHASE OF VARIOUS COMPUTERS SOFTWARE AND RS.7,31, 580/- HAD BEEN PAID FOR WEBSITE DEVELOPMENT AND, THEREFORE, NO TDS WAS DEDUCTIBLE. THE ASSESSING OFFICER AFTER CONSIDERING THE DEFINITION OF FEES FOR TECHNICAL SERVICES AS PE R SECTION 194J CONCLUDED THAT THE ASSESSEE HAD PAID A SUM OF RS.36,56,580/- TO M/S. THEMA TECH ((T ECHNICAL PERSONNEL) FOR RENDERING TECHNICAL SERVICES FOR VARIOUS MANAGEMENT SOFTWARE DEVELOPMENT, WEBSITE DEVELOPMENT, ETC. HE DID NOT AGREE WITH THE ASSESSEES CONTENTION THA T THE SAID PAYMENTS WERE TOWARDS PURCHASE ITA NO. 2121/KOL./2010 2 OF SOFTWARE. HE ACCORDINGLY HELD THAT THE TOTAL CON SIDERATION OF RS.36,56,580/- PAID TO M/S. THEMA TECH WAS TOWARDS FEES FOR TECHNICAL SERVICES UNDER SECTION 194J AND, THEREFORE, TDS WAS REQUIRED TO BE DEDUCTED. 3. ASSESSING OFFICER ALSO HELD THAT PAYMENT TO M/S. MIRACLES INFERTILITY & GENETIC RESEARCH PVT. LTD. WAS ALSO TOWARDS TECHNICAL SERVI CES AND, THEREFORE, TDS WAS REQUIRED TO BE MADE. IN THIS REGARD, WE MAY OBSERVE THAT LD. CIT(A PPEALS) HAS CONFIRMED THIS ACTION OF ASSESSING OFFICER IN THIS REGARD AND THE ASSESSEE H AS NOT PREFERRED ANY APPEAL ON THIS COUNT. THUS, THE ONLY ISSUE FOR CONSIDERATION IN THE PRESE NT APPEAL IS IN REGARD TO DEDUCTION OF TAX IN RESPECT OF PAYMENT MADE TO M/S. THEMA TECH OF RS.36 ,56,580/-. 4. BEFORE LD. CIT(APPEALS), IT WAS, INTER ALIA, SUB MITTED THAT OUT OF RS.36,56,580/-, RS.29,25,000/- HAD BEEN PAID TO M/S. THEMA TECH FOR PURCHASE OF VARIOUS COMPUTERS SOFTWARE AND THE COPIES OF THE BILLS WERE ALSO ENCLOSED. IT WAS POINTED OUT THAT NO PROFESSIONAL CHARGES WERE INVOLVED IN THE SAME AND, THEREFORE, NO TDS WA S REQUIRED TO BE MADE. 5. AS REGARDS RS.7,31,580/-, IT WAS SUBMITTED THAT THE SAME HAD BEEN PAID TO M/S. THEMA TECH FOR WEBSITE DEVELOPMENT. LD. CIT(APPEALS) AFTE R PERUSING THE COPIES OF BILLS OBSERVED THAT THE SUM OF RS.29,25,000/- WAS PAID FOR PURCHAS ES OF DIAGNOSTIC CENTRE MANAGEMENT SOFTWARE, ACCOUNTING SOFTWARE, INVENTORY SOFTWARE, HRD SOFTWARE, ETC. HE POINTED OUT THAT THESE SOFTWARE PRODUCTS ARE OFF THE SHELF PRODUCTS LIKE ACCOUNTING SOFTWARE/ DIAGNOSTIC CENTRE MANAGEMENT SOFTWARE, ETC. SOLD BY VARIOUS SOFTWARE COMPANIES. HE, THEREFORE, HELD THAT THESE SOFTWARES DID NOT FELL UNDER THE CATEGORY OF FEE F OR TECHNICAL SERVICES. THE ASSESSEE HAS NOT PREFERRED ANY APPEAL AGAINST THIS FINDING OF LD. CI T(APPEALS). THEREFORE, THE ONLY ISSUE IS WHETHER THE PAYMENT OF RS.29,25,000/- WAS TOWARDS F EE FOR TECHNICAL SERVICES OR NOT. 6. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE P ARTIES AND HAVE PERUSED THE RECORDS OF THE CASE. IN THE GROUNDS OF APPEAL, IT IS STATED TH AT THE PAYMENT WAS FOR SPECIALIZED TECHNICAL SERVICES FOR DEVELOPMENT OF TAILOR MADE SOFTWARE. H OWEVER, IN THE ORDER UNDER SECTION 201(1) /201(1A), THE ASSESSING OFFICER HAS MERELY, INTER A LIA, OBSERVED THAT THE PAYMENT WAS MADE FOR VARIOUS MANAGEMENT SOFTWARE DEVELOPMENTS. HE HAS NO T POINTED OUT WHETHER SOFTWARE WAS ITA NO. 2121/KOL./2010 3 TAILOR MADE OR NOT. LD. CIT(APPEALS) AFTER EXAMININ G THE VARIOUS BILLS, INTER ALIA, OBSERVED AS UNDER :- THESE SOFTWARES PRODUCTS ARE OFF THE SHELF PRODUCT S LIKE ACCOUNTING SOFTWARE/ DIAGNOSTIC CENTRE MANAGEMENT S OFTWARE, ETC. SOLD BY VARIOUS SOFTWARE COMPANIES. 7. LD. COUNSEL FOR THE ASSESSEE HAS RIGHTLY POINTED OUT THAT THERE IS NO EVIDENCE ON RECORD TO SHOW THAT THESE SOFTWARES WERE TAILOR MADE AS PE R ASSESSEES REQUIREMENT. BEFORE US ALSO NOTHING HAS BEEN BROUGHT ON RECORD BY LD. D.R. TO C ONTROVERT THE FINDINGS OF LD. CIT(APPEALS). THEREFORE, LD. CIT(APPEALS) HAD RIGHTLY TREATED THE AMOUNT OF RS.29,25,000/- PAID TO M/S. THEMA TECH TOWARDS PURCHASE OF COMPUTER SOFTWARES. HENCE, THIS AMOUNT COULD NOT BE TREATED AS AMOUNT PAID TOWARDS FEES FOR TECHNICAL SERVICES. WE, ACCORDINGLY, CONFIRM THE ORDER OF LD. CIT(APPEALS) AND REJECT THE GROUNDS OF APPEAL RAISE D BY THE REVENUE. 8. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. . / . / . / . / 0 1 0 1 0 1 0 1 .2 .2 .2 .2 3 3 3 3 2 2 2 2 45 4545 45 ORDER PRONOUNCED IN THE OPEN COURT ON 28/ 12 /2011. & 6 7 - 28/12/2011. SD/- SD/- [ MAHAVIR SINGH / ] [S.V. MEHROTRA/ ( . . )] JUDICIAL MEMBER/ ACCOUNTANT MEMBER/ DATED : 28/ 12/ 2011 COPY OF THE ORDER FORWARDED TO: 1. M/S. SURAKSHA DIAGNOSTIC & EYE CENTRE PVT. LTD., P- 118, CIT ROAD, SCHEME-VI, KOLKATA-54 2 ITO, WARD-59(2), KOLKATA, 10B, MIDDLETON ROW, KOLKA TA-71, 3. COMMISSIONER OF INCOME-TAX (APPEALS)- , KOLKATA 4. CIT- , KOLKATA 5. DR, KOLKATA BENCHES, KOLKATA (TRUE COPY) BY ORDER ASSISTANT REGISTRAR, I.T.A.T., KOLKATA LAHA, SR. P.S.