Madhyanchal Vidyut Vitran Nigam Ltd., Lucknow V. Asstt. Commissioner of Income Tax, Lucknow

ITA 388/LKW/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 92137 (ITAT-LUCKNOW)
• Duration Of Justice: 1 year(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-06-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 20-04-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 15-05-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PINKI MAHAWAR
• Assessee Lawyers: R C JAIN

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B , LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO. 388 /LKW/201 4 ASSESSMENT YEAR:20 09 20 1 0 M/S MADHYANCHAL VIDYUT VITARAN NIGAM LTD., 4A, GOKHLEY MARG, LUCKNOW 226010 PAN:AAECM0108J VS ACIT RANGE 4, LUCKNOW (APPELLANT) (RESPONDENT) APPELLANT BY SHRI R. C. JAIN, C.A. RESPONDENT BY SMT. PINKI MAHAWAR, SR. DR DATE OF HEARING 20/04/2015 DATE OF PRONOUNCEMENT 1 1 /06/2015 O R D E R PER A. K. GARODIA, A.M. T HIS IS REVENU E S APPEAL DIRECTED AGAINST THE ORDER OF LEARNED CIT (A) I I LUCKNOW DATED 3 1 .0 1 .201 4 FOR A.Y. 20 09 20 1 0 . 2. GROUND NO. 1 IS AS UNDER : - 1.1 BECAUSE THE LEARNED FIRST APPELLATE AUTHORITY ERRED IN CONFIRMING ADDITION OF RS. 195,51,83,780 / - U/S 40A (IA) OF THE INCOME TAX ACT, 1961. 1.2 BECAUSE THE LEARNED FIRST APPELLATE AUTHORITY ERRED ON FACTS AND IN LAW IN CONCLUDING THAT THE TRANSMISSION CHARGES PAID BY THE ASSESSEE FOR TRANSMISSION OF ELECTRICITY IS IN THE NATURE OF TECHNICAL SERVICES RENDERED BY THE PAYEE TO THE ASSESSEE AND HENCE LIABLE TO TDS U/S 194J OF THE INCOME TAX ACT, 1961. 1.3 BECAUSE THE LEARNED FIRST APPELLATE AUTHORITY ERRED ON FACTS AND IN STATING THAT THE CASE LAWS CITED BY THE 2 ASSESSING OFFICER ARE RELEVANT TO THE FACTS OF THE ASSESSEES CASE. 1.4 BECAUSE THE LEARNED FIRST APPELLATE AUTHORITY IGNORED PLETHORA OF CASES CITED BY THE ASSESSEE OF DIFFERENT BENCHES OF THE HONBLE INCOME TAX APPELLATE TRIBUNAL DIRECTLY APPLICABLE TO THE FACTS OF THE ASSESSEES CASE BY SIMPLY THAT THE APPELLANT HAS NOT CITED ANY CASE LAW ON THIS ISSUE OF JURISDICTIONAL BENCH OR HONBLE HIGH COURT. 3 . LEARNED DR OF THE REVENUE SUPPORTED THE ASSESSMENT ORDER. LEARNED AR OF THE ASSESSEE PLACED RELIANCE ON THE TRIBUNAL ORDER IN ASSESSEES OWN CASE FOR A.Y. 2008 09 IN ITA NO. 01/LKW/2013 V& 505/LKW/2012 DATED 27.02.2015 AVAILABLE ON PAGES 108 TO 131 OF THE PAPER BOOK. IN PARTICULAR, OUR ATTENTION WAS DRAWN TO PAGES 127 TO 130 OF THE PAPER BOOK. 4 . WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT ON PAGE 130 OF THE PAPER BOOK IN PARA 22 OF THE TRIBUNAL ORDER, IT WAS HELD BY THE TRIBUNAL ORDER IN ASSESSEES OWN CASE FOR A.Y. 2008 09 THAT PAYMENT OF TRANSMISSION CHARGES IS NOT PAYMENT FOR TECHNICAL SERVICES A ND TDS IS NOT REQUIRED TO BE DEDUCTED. LEARNED DR OF THE REVENUE COULD NOT POINT OUT ANY DIFFERENCE IN FACTS IN THE PRESENT YEAR AND THEREFORE, WE DO NOT FIND ANY REASON TO TAKE A CONTRARY VIEW IN THE PRESENT YEAR. RESPECTFULLY FOLLOWING THIS TRIBUNAL ORDER, WE HOLD THAT IN THE PRESENT YEAR ALSO, PAYMENT OF TRANSMISSION CHARGES IS NOT PAYMENT FOR TECHNICAL SERVICES AND THEREFORE, TDS IS NOT REQUIRED TO BE DEDUCTED AND AS A CONSEQUENCE, THERE CANNOT BE ANY DISA LLOWANCE U/S 40A(IA). THE SAME IS DELETED. THIS GROUND IS ALLOWED. 5. GROUND NO. 2 IS AS UNDER: - 2 .1 BECAUSE THE LEARNED FIRST APPELLATE AUTHORITY ERRED IN LAW AND ON FACTS IN CONFIRMING ADDITION OF RS. 322 , 48 , 787 / - IN RESPECT OF INTEREST TO CUSTOMERS ON THEIR SECURITY DEPOSIT . 3 2 .2 BECAUSE THE LEARNED FIRST APPELLATE AUTHORITY FAILED TO APPRECIATE THE SUBMISSIONS MADE BY THE ASSESSEE REGARDING THE REASONS ON ACCOUNT OF WHICH SUCH INTEREST ON SECURITY DEPOSIT OF CUSTOMERS WERE NOT LIABLE FOR TDS AND HENCE T HE DISALLOWANCE OUGHT NOT TO HAVE BEEN CONFIRMED. 2 .3 BECAUSE , WITHOUT PREJUDICE, THE LEARNED FIRST APPELLATE AUTHORITY OUGHT NOT TO HAVE BEEN CONFIRMED DISALLOWANCE OF ENTIRE INTEREST OF RS. 322,48,787/ - IN RESPECT OF INTEREST TO CUSTOMERS ON THEIR SECUR ITY DEPOSIT. 6. LEARNED DR OF THE REVENUE SUPPORTED THE ASSESSMENT ORDER. LEARNED AR OF THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW. HE ALSO SUBMITTED THAT ON PAGES 17 TO 26 OF THE PAPER BOOK IS WRITTEN SUBMISSIONS MADE BEFO RE THE A.O. HE ALSO SUBMITTED THAT EVEN IF ENTIRE AMOUNT OF INTEREST EXPENDITURE WAS NOT ACCEPTED AS EXEMPT FROM THE REQUIREMENT OF TDS, THE A.O. SHOULD HAVE MADE A REASONABLE ESTIMATE OF THE SAME. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT ON PAGE 16 OF HIS ORDER, A CLEAR FINDING HAS BEEN GIVEN BY LEARNED CIT (A) THAT THE ASSESSEE HAS FAILED TO FILE EVIDENCE IN SUPPORT OF ITS VERSION THAT THE INTEREST PAYMENT MADE DURING THE PRESENT YEA R TO SINGLE CUSTOMER WAS LESS THAN RS. 5,000/ - AND TDS PROVISIONS U/S 194A WAS NOT APPLICABLE. IN THE PAPER BOOK OF 142 PAGES FILED BEFORE US ALSO, NO SUCH DETAIL OR EVIDENCE IS AVAILABLE. IN THE ABSENCE OF DETAIL AND EVIDENCE, SUCH GENERAL CLAIM CANNOT B E A BASIS TO HOLD THAT TDS PROVISIONS AND CONSEQUENTLY SECTION 40A (IA) IS NOT APPLICABLE. REGARDING THE SUBMISSION OF LEARNED AR OF THE ASSESSEE THAT THE A.O. SHOULD HAVE MADE A REASONABLE ESTIMATE OF THE AMOUNT OF INTEREST EXPENDITURE TO WHICH TDS PROVIS IONS ARE APPLICABLE, WE WOULD LIKE TO OBSERVE THAT WHETHER TDS IS REQUIRED TO BE MADE OR NOT, IS NOT AN ISSUE WHICH CAN BE DECIDED ON ESTIMATE BASIS. IN OUR OPINION, THE BURDEN WAS ON THE ASSESSEE TO ESTABLISH 4 THAT TO A SPECIFIC ITEM OF INTEREST EXPENDITUR E, TDS PROVISIONS ARE NOT APPLICABLE AND SINCE THE ASSESSEE HAS NOT DONE SO, THERE IS NO INFIRMITY IN THE ORDERS OF THE AUTHORITIES BELOW TO REJECT SUCH CLAIM OF THE ASSESSEE AND MAKE DISALLOWANCE U/S 40A (IA). WE, THEREFORE DECLINE TO INTERFERE IN THE ORD ER OF CIT (A) ON THIS ISSUE. ACCORDINGLY, GROUND NO. 2 IS REJECTED. 8 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED . (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 1 1 /0 6 /201 5 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. D.R., I.T.A.T., LUCKNOW ASSTT. REGISTRAR