Torrent Pharmaceuticals Ltd., Ahmedabad V. The Dy.CIT, TDS Circle, Ahmedabad

ITA 2671/AHD/2014

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5776 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 5 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-03-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 12-09-2017
• Assessment Year: 2012-2013
• Appeal Filed On: 01-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MUDIT NAGPAL HEARING CONCLUDED
• Assessee Lawyers: P M MEHTA
• Section: 194C; 201(1)

Judgement Text

ITA NO.2671/AHD/2014 ASSESSMENT YEAR: 2012-13 PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH, AHMEDABAD [CORAM: PRAMOD KUMAR AM AND S S GODARA JM] ITA NO.2671/AHD/2014 ASSESSMENT YEAR: 2012-13 TORRENT PHARMACEUTICALS LTD., ..................APPELLANT TORRENT HOUSE, OFF ASHRAM ROAD, AHMEDABAD 380 009. [PAN : AAACT 5456 A] VS. DEPUTY COMMISSIONER OF INCOME TAX, TDS CIRCLE, AHMEDABAD . ............................RESPONDENT APPEARANCES BY P.M. MEHTA FOR THE APPELLANT MUDIT NAGPAL FOR THE RESPONDENT HEARING CONCLUDED ON: 04.01.2018 ORDER PRONOUNCED ON : 28.03.2018 O R D E R PER PRAMOD KUMAR, AM: 1. THIS APPEAL CHALLENGES LEARNED CIT(A)S ORDER DA TED 22.07.2014 UPHOLDING TAX WITHHOLDING DEMAND AND INTEREST THEREON, UNDER SECT ION 201(1) AND 201(1A) RESPECTIVELY, OF THE INCOME TAX ACT 1961 (THE ACT HEREINAFTER), FOR THE ASSESSMENT YEAR 2012-13. 2. GRIEVANCES OF THE ASSESSEE, IN SUBSTANCE, IS THA T THE CIT(A) ERRED IN UPHOLDING DEMAND OF RS.1,87,440/- RAISED ON THE ASSESSEE UNDE R SECTION 201 R.W.S. 194J OF THE ACT. 3. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUF ACTURING DRUGS AND PHARMACEUTICAL FORMULATIONS. THE ASSESSEE HAD MADE A PAYMENT OF RS.21,00,000/- TO GUJARAT ENVIRO PROTECTION AND INFRASTRUCTURE LIMITE D FOR DISPOSAL OF HAZARDOUS WASTE AS PER THE RULES AND PROCEDURE LAID DOWN, AND DULY DED UCTED TAX AT SOURCE UNDER SECTION 194C FROM THE SAID PAYMENT. THE ASSESSING OFFICER (TDS) WAS, HOWEVER, OF THE VIEW THAT SINCE THE WORK IS OF SUCH A NATURE THAT IT ESS ENTIALLY INVOLVES RENDITION OF TECHNICAL ITA NO.2671/AHD/2014 ASSESSMENT YEAR: 2012-13 PAGE 2 OF 3 SERVICES AND SPECIFIC TECHNICAL JOB. HE WAS OF T HE VIEW THAT GUJARAT ENVIRO PROTECTION & INFRASTRUCTURE LIMITED (GEPIL) HAS CREATED SPECIF IC FACILITIES FOR STORAGE OF HAZARDOUS WASTE AT SURAT, THAT GEPIL IS SPECIFICALLY APPROVED BY GUJARAT POLLUTION CONTROL BOARD AND THAT THE AMOUNT PAID PER METRIC TONNE ALSO SUGG ESTS THAT THE WORK REQUIRED VERY HIGH SPECIALISED SKILLS, TECHNOLOGY AND EXPERTISE. ON THIS BASIS, A DEMAND, FOR SHORT DEDUCTION OF TAX AT SOURCE, WAS RAISED. AGGRIEVED, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LEARNED CIT(A) BUT WITHOUT ANY SU CCESS. 4. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF APPLIC ABLE LEGAL POSITION. 5. IT IS NOT EVEN IN DISPUTE THAT THE AMOUNT PAID T O GEPIL IS FOR THE WORK DONE, RATHER THAN THE RENDITION OF SERVICES SIMPLICITOR, AND THE AGREEMENT, EXTRACTS FROM WHICH ARE EXTENSIVELY REPRODUCED BY THE AUTHORITIES BELOW , ALSO UNAMBIGUOUSLY DEMONSTRATES THAT. THE CHARGES PAYABLE TO GEPIL ARE FOR TREATM ENT, DISPOSAL AND TRANSPORTATION. IT IS NOT, THEREFORE, AN ARRANGEMENT FOR RENDITION OF ANY SERVICES BY GEPIL. IT IS AN AGREEMENT FOR CERTAIN WORK TO BE DONE BY GEPIL WHIC H INVOLVES CERTAIN TECHNICAL AND SPECIALISED SKILLS, BUT THEN MERE INVOLVEMENT OF SU CH SKILLS WOULD NOT TAKE THE WORK OUT OF THE AMBIT OF SECTION 194C. THE DEDUCTIBILITY OF TAX UNDER SECTION 194J WOULD COME INTO PLAY ONLY WHEN THE PAYMENT IS FOR FEES FOR TE CHNICAL SERVICES AND NOT FOR WORK DONE, WHICH REQUIRED SPECIALISED SKILLS. BY NO STR ETCH OF LOGIC, IN OUR CONSIDERED VIEW, THE PAYMENT MADE BY THE ASSESSEE CAN BE TREATED AS A PAYMENT OF FEES FOR TECHNICAL SERVICES. 6. IN THE LIGHT OF THE ABOVE DISCUSSIONS, AS ALSO B EARING IN MIND ENTIRETY OF THE CASE, WE HOLD THAT THE TAX DEDUCTION AT SOURCE LIABILITY OF THE ASSESSEE WAS ONLY UNDER SECTION 194C WHICH WAS DULY DISCHARGED BY THE ASSESSEE. AC CORDINGLY, IMPUGNED DEMANDS UNDER SECTION 201(1) AND 201(1A) ARE DEVOID OF LEAL LY SUSTAINABLE BASIS. WE VACATE THE IMPUGNED TAX WITHHOLDING AND INTEREST DEMANDS. 7. IN THE RESULT, THE APPEAL IS ALLOWED IN THE TERM S INDICATED ABOVE. PRONOUNCED IN THE OPEN COURT ON THIS 28 TH DAY OF MARCH, 2018. SD/- SD/- S S GODARA PRAMOD KUMAR (JUDICIAL MEMBER) (ACCOUNTANT MEM BER) DATED: 28 TH MARCH, 2018 PBN/* ITA NO.2671/AHD/2014 ASSESSMENT YEAR: 2012-13 PAGE 3 OF 3 COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) CIT (4) CIT(A) (5) DR (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD