JM FINANCIAL INSTITUTIONAL SECURITIES P. LTD, MUMBAI V. DCIT (TDS) RG 2(1), MUMBAI

ITA 4541/MUM/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 0104 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-06-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 05-08-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARJU GARODIA
• Assessee Lawyers: M KRISHNAKUMAR
• Section: 194C; 201(1)

Judgement Text

, J , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES J, MUMBAI BEFORE SHRI SHAMIM YAHYA, AM & SHRI RAVISH SOOD, JM ITA NO.4541/MUM/2015 : ASST.YEAR 2012-2013 M/S.J.M.FINANCIAL INSTITUTIONAL SECURITIES PRIVATE LIMITED (NOW MERGED WITH J.M.FINANCIAL CONSULTANTS PVT. LTD.) 7 TH FLOOR, CNERGY, APPASAHEB MARATHE MARG, PRABHADEVI, MUMBAI-400 025. PAN : MUMA09059B. / VS. DY.COMMISSIONER OF INCOME - TAX (TDS) RANGE 2(1) MUMBAI. ( / APPELLANT) ( / RESPONDENT) /APPELLANT BY : SHRI M.KRISHNAKUMAR /RESPONDENT BY : MS.ARJU GARODIA / DATE OF HEARING : 20.06.2017 / DATE OF PRONOUNCEMENT : 23.06.2017 / O R D E R PER SHAMIM YAHYA, AM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST ORDER OF LEARNED CIT(A) DATED 10.06.2015 AND PERTAINS TO ASSESSMENT YEAR 2012-2013. 2. THE GROUNDS OF APPEAL READ AS UNDER:- A. ALLEGED SHORT DEDUCTION OF TAX AT SOURCE ON PAYMENTS MADE TO PARTIES FOR ANNUAL MAINTAINENCE CONTRACTS UNDER THE HEAD REPAIRS AND MAINTENANCE OF RS. 93S23/- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE HONORABLE COMMISSIONER OF INCOME TAX (APPEALS) ('THE HONORABLE CIT(A)'), ERRED IN CONFIRMING THE ACTION OF THE DEPUTY COMMISSIONER OF INCOME TAX (TDS) -2(1) (' THE LEARNED DCIT') WHO HELD THE APPELLANT AS DEEMED TO BE IN DEFAULT ON THE GROUND OF ALLEGED SHORT DEDUCTION OF TAX AT SOURCE ON CERTAIN CREDITS/PAYMENTS MADE TO PARTIES FOR ANNUAL ITA NO.4541/MUM/2015. M/S.J.M.FINANCIAL INSTITUTIONAL SECURITIES PRIVATE LIMITE (NOW JM FINANCIAL CONSULTANTS PVT. LTD.). 2 MAINTENANCE CONTRACTS IN RESPECT OF OFFICE EQUIPMENT SYSTEMS AND COMPUTER SYSTEMS DEBITED UNDER THE HEAD REPAIRS & MAINTENANCE, BY HOLDING THAT TAX SHOULD HAVE BEEN DEDUCTED AT SOURCE AS PER THE PROVISIONS OF SECTION 194 J OF THE INCOME TAX ACT, 1961 ('THE ACT') AND NOT AS PER THE PROVISIONS OF SECTION 194C OF THE ACT AS DONE BY THE APPELLANT; WITHOUT CONSIDERING THE FACTS OF THE CASE AND THE SUBMISSION OF APPELLANT IN THIS RESPECT. 2. THE HONOURABLE CIT (A) AND THE LEARNED DCIT FAILED TO APPRECIATE THE FACT THAT THE ANNUAL MAINTENANCE CONTRACTS ENTERED INTO WITH THE SAID PARTIES ARE ROUTINE MAINTENANCE CONTRACTS TO MAINTAIN THE OFFICE EQUIPMENTS AND COMPUTER SYSTEMS WHICH ARE COVERED UNDER SECTION 194 C OF THE ACT AND THE SAID SERVICES ARE NOT COVERED UNDER SECTION 194J OF THE ACT NOR UNDER THE PROVISIONS OF SECTION 9 (VII) TO BE CLASSIFIED AS FEES FOR TECHNICAL SERVICES. 3. IN VIEW OF THE ABOVE, THE LEARNED DCIT BE DIRECTED TO HAVE THE DEMAND RAISED ON THE APPELLANT BE DELETED AS THE APPELLANT HAS COMPLIED WITH THE PROVISIONS OF CHAPTER XVIIB OF THE ACT. B. GENERAL 4. THE HONORABLE CIT (A)'S ORDER BEING CONTRARY TO THE LAW, EVIDENCE AND FACTS OF THE CASE, SHOULD BE SET ASIDE, QUASHED OR MODIFIED ON THE GROUNDS DEDUCED ABOVE. 5. THE APPELLANT CRAVES LEAVE TO ADD, MODIFY OR DELETE ANY GROUND AT OR BEFORE THE HEARINGS. 3. AT THE OUTSET IN THIS CASE THE LEARNED COUNSEL OF THE ASSESSEE SUBMITTED THAT THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE ITAT MUMBAI BENCHES IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2010-2011 VIDE ORDER DATED 20.07.2016 IN ITA NO.2442/MUM/2015. 4. PER CONTRA, THE LEARNED DEPARTMENTAL REPRESENTATIVE DID NOT DISPUTE THIS PROPOSITION. ITA NO.4541/MUM/2015. M/S.J.M.FINANCIAL INSTITUTIONAL SECURITIES PRIVATE LIMITE (NOW JM FINANCIAL CONSULTANTS PVT. LTD.). 3 5. UPON CAREFUL CONSIDERATION, WE FIND THAT THIS TRIBUNAL IN ASSESSEES OWN CASE AS ABOVE HAS ADJUDICATED IDENTICAL ISSUE IN FAVOUR OF THE ASSESSEE BY HOLDING AS UNDER:- WE HAVE GONE THROUGH THE DECISIONS RELIED UPON BY THE ASSESSEE AND WE NOTICE THAT THE VARIOUS BENCHES OF THE TRIBUNAL HAVE HELD THAT THE PAYMENT FOR TECHNICAL SERVICES, IN ORDER TO BE COVERED U/S 194J OF THE ACT, SHOULD BE A CONSIDERATION FOR ACQUIRING OR USING TECHNICAL KNOWHOW SIMPLICITOR PROVIDED OR MADE AVAILABLE BY HUMAN ELEMENT. IN THE INSTANT CASE, THE PAYMENTS HAVE BEEN MADE FOR RENDERING SERVICES IN CONNECTION WITH MAINTENANCE OF EQUIPMENTS. BY OFFERING THE SAID SERVICES, THE SERVICE PROVIDER HAS NOT IMPARTED ANY TECHNICAL KNOWLEDGE TO THE ASSESSEE NOR DID THE ASSESSEE ACQUIRE ANY TECHNICAL INFORMATION. MERELY BECAUSE A TECHNICIAN HAVING KNOWLEDGE OF FUNCTIONING OF EQUIPMENTS RENDERS MAINTENANCE SERVICE, THE SAME SHALL NOT RESULT IN RENDERING OF TECHNICAL SERVICES CONTEMPLATED U/S 194J OF THE ACT. ACCORDINGLY, WE FIND MERIT IN THE CONTENTIONS OF THE ASSESSEE. ACCORDINGLY, WE SET ASIDE THE ORDER PASSED BY LD.CIT(A) ON THIS ISSUE AND DIRECT THE A.O. TO DELETE THE DEMAND RAISED U/S 201(1) OF THE ACT AS WELL AS THE INTEREST CHARGED U/S 201(1A) OF THE ACT. 6. SINCE NO CASES HAVE BEEN MADE OUT BY THE REVENUE BEFORE US THAT THERE IS ANY CHANGE IN THE LAW OR IN FACTS FOR THE PRESENT APPEAL, WE RESPECTFULLY FOLLOW THE PRECEDENT AS ABOVE. ACCORDINGLY, WE UPHOLD THE ORDER OF THE LEARNED CIT(A). 7. IN THE RESULT, THIS APPEAL FILED BY THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED ON THIS 23 RD DAY OF JUNE, 2017. SD/- SD/- ( RAVISH SOOD ) ( SHAMIM YAHYA ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI; DATED : 23 RD JUNE, 2017. DEVDAS* ITA NO.4541/MUM/2015. M/S.J.M.FINANCIAL INSTITUTIONAL SECURITIES PRIVATE LIMITE (NOW JM FINANCIAL CONSULTANTS PVT. LTD.). 4 / COPY OF THE ORDER FORWARDED TO : / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT, MUMBAI. 4. / CIT(A), MUMBAI 5. , , / DR, ITAT, MUMBAI 6. [ / GUARD FILE.