ITO TDS 1(2), MUMBAI V. CHINUBHAI KALIDAS & BROS, MUMBAI

ITA 5459/MUM/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 2754 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 1 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-09-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2011-2012
• Appeal Filed On: 13-08-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAKESH KUMAR AGARWAL
• Assessee Lawyers: DILIP DAMLE
• Section: 133A; 194C; 201(1); 6

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH C , MUMBAI BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH , JUDICIAL MEMBER ITA NO S . 1513 TO 1515/MUM/2013 & 5459 /MUM/20 13 : (A.Y S : 2009 - 10, 2010 - 11, 2008 - 09 & 2011 - 12 ) ITO, TDS - 1(2), MUMBAI ( APPELLANT ) VS. M/S. CHINUBHAI KALIDAS & BROS. 2 ND FLOOR, KULKARNI PATIL BHAVAN, 14, MURZABAN ROAD, MUMBAI 400 0 01 (RESPONDENT) PAN : AACFC2969G ASSESSEE BY : SHRI DILIP DAMLE REVENUE BY : SHRI RAKESH KUMAR AGARWAL DATE OF HEARING : 09 / 09 /2016 DATE OF PRONOUNCEMENT : 23 / 09 /2016 O R D E R PER G.S. PANNU , AM : THE CAPTIONED FOUR APPEALS PREFERRED BY THE REVENUE PERTAINING TO ASSESSMENT YEARS 2008 - 09, 2009 - 10, 2010 - 11 AND 2011 - 12 INVOLVE COMMON ISSUES RELATING TO THE SAME ASSESSEE. SINCE THE APPEALS RELATE TO A SINGLE ASSESSEE AND INVOLVE COMMON ISSUES, THEY HAV E BEEN CLUBBED AND HEARD TOGETHER AND A CONSOLIDATED ORDER IS BEING PASSED FOR THE SAKE OF CONVENIENCE AND BREVITY. APPEAL FOR ASSESSMENT YEAR 2008 - 09 IS TAKEN AS THE LEAD CASE TO APPRECIATE THE CONTROVERSY. 2 M/S. CHINUBHAI KALIDAS & BROS. ITA NOS. 1513 TO 1515 & 5459/MUM/2013 ITA NO. 1515/MUM/2013 (A.Y 2008 - 09) 2. THE CA PTIONED APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF CIT(A) - 14 , MUMBAI DATED 23.11.2012 , PERTAINING TO THE ASSESSMENT YEAR 20 08 - 09 , WHICH IN TURN HAS ARISEN FROM THE ORDER PASSED BY THE ASSESSING OFFICER, MUMBAI DATED 30.3.2011 UNDER SECTION 201(1) AND 201(1A) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). 3. IN THIS APPEAL, REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : - 1. THE LD. CIT(A) HAS ERRED ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE AND IN LAW IN DELETING THE ADDITION OF SHORT DEDUCTION DETERMINED ON ACCOUNT OF TDS PAYMENT MADE TO CWC, CFS BPT, AAI U/S. 194I AND WITHOUT PROPERLY APPRECIATING THE FACTUAL AND LEGAL MATRIX OF THE CASE AS CLEARLY BROUGHT OUT IN ORDER U/S. 201(1)/201(1A) OF THE INCOME - TAX ACT, 1961. 2. THE LD. CIT(A) HAS ERRED ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE AND IN LAW IN NOT APPRECIATING THE FACT THAT THE DEFINITION OF RENT IN EXPLANATION (1) TO SECTION 194I IS VERY WIDE IN ITS AMBIT AND INCLUDES WITHIN ITS SWEEP, PAYMENT BY WHATEVER NAME CALL ED WHICH IS PAID PURSUANT TO ANY AGREEMENT OR ARRANGEMENT. 3. THE LD. CIT(A) HAS ERRED ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE AND IN LAW IN DELETING THE ADDITION ON ACCOUNT OF TDS PAYMENT TOWARDS SURVEY FEES MADE U/S. 194J AND WITHOUT PROPERLY APPR ECIATING THE FACT THAT THE SERVICES REQUIRE TECHNICAL OR PROFESSIONAL KNOWLEDGE AND THE PAYMENTS WERE EFFECTED BY THE ASSESSEE TO THE RESPECTIVE PARTIES FOR RENDERING SUCH SPECIALIZED PROFESSIONAL/TECHNICAL SERVICES. 4. THE LD. CIT(A) HAS ERRED ON THE FAC TS AND IN CIRCUMSTANCES OF THE CASE AND IN LAW IN DELETING THE ADDITION ON ACCOUNT OF TDS PAYMENT TOWARDS INTERNET CHARGES MADE U/S. 194J, WITHOUT PROPERLY APPRECIATING THE FACT THAT 3 M/S. CHINUBHAI KALIDAS & BROS. ITA NOS. 1513 TO 1515 & 5459/MUM/2013 THE SERVICES REQUIRE TECHNICAL OR PROFESSIONAL KNOWLEDGE AND THE PAYMENTS WERE AFFECTED BY THE ASSESSEE TO THE RESPECTIVE PARTIES FOR RENDERING PROFESSIONAL/TECHNICAL SERVICES. 5. THE LD. CIT(A) HAS ERRED ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE AND IN LAW IN DELETING THE ADDITION ON ACCOUNT OF TDS PAYMENT TOWARDS HIRING OF FORKLIFT/CRANES CHARGES MADE U/S. 194I AND TREATING THE SAME AS TDS PAYMENT U/S. 194C, WITHOUT PROPERLY APPRECIATING THE FACT THAT THE CHARGES WERE FOR HIRING/RENTAL OF MACHINERIES WHICH ATTRACTS PROVISIONS OF SECTION 1941 OF THE I.T. ACT, 1961. 6. THE LD. CIT(A) HAS ERRED ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE AND IN LAW IN DELETING THE ADDITION ON ACCOUNT OF TDS PAYMENT TOWARDS FUMIGATION CHARGES MADE U/S. 194J AND TREATING THE SAME AS TDS PAYMENT U/S. 194C OF THE ACT, WITHOUT PROPERLY APPRECIA TING THE FACT THAT THE SERVICES REQUIRE TECHNICAL OR PROFESSIONAL KNOWLEDGE AND THE PAYMENTS WERE AFFECTED BY THE ASSESSEE TO THE RESPECTIVE PARTIES FOR RENDERING PROFESSIONAL/TECHNICAL SERVICES. 7. THE LD. CIT (A) HAS ERRED ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW BY DELETING THE INTEREST LEVIED U/S. 201(1A) OF THE I.T. ACT 1961 BY HOLDING THAT THE PAYMENT OF CWC, CFS, BPT, AAI, FORKLIFT/CRANE CHARGES DOES NOT FALL WITHIN THE PURVIEW OF SECTION U/S. 194I AND SURVEY FEES, INTERNET CHARGES AND FUMI GATION CHARGES U/S. 194J OF THE I.T. ACT. 8. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN DELETING THE DEMAND OF RS. 94,24,617/ - ON ACCOUNT OF SHORT DEDUCTION OF TAX ON PAYMENTS OF CWC, CFS, BPT, AAI, FORKLIFT/CRANE CHARGES DOES NOT FALL WITHIN THE PURVIEW OF SECTION U/S. 194I AND SURVEY FEES, INTERNET CHARGES AND FUMIGATION CHARGES U/S. 194J OF THE I.T. ACT., WITHOUT APPRECIATING THE FACTUAL AND LEGAL MATRIX OF THE CASE, AS CLEARLY BROUGHT OUT BY THE A.O. IN HIS ORDER U/S. 201(1) / 201(1A ) OF THE INCOME - TAX ACT, 1961. 9. THE LEARNED CIT(A) HAS ERRED ON THE FACTS AND CIRCUMSTANCES & IN LAW IN DELETING THE INTEREST U/S 201(1A) OF THE IT ACT, 1961 ON THE SHORT DEDUCTION OF TAX DETERMINED BY THE AO AS THE TAX DETERMINED HAS ALREADY BEEN DELET ED BY HIM AND INTEREST DELETION IS CONSEQUENTIAL TO THE QUANTUM DELETION FOR WHICH 4 M/S. CHINUBHAI KALIDAS & BROS. ITA NOS. 1513 TO 1515 & 5459/MUM/2013 FURTHER APPEAL HAS BEEN RECOMMENDED VIDE GROUND NO.1 TO 8. 4. BEFORE WE PROCEED TO ADJUDICATE THE INDIVIDUAL GROUNDS OF APPEAL, THE BRIEF BACKGROUND CAN BE SUMMARIZED AS F OLLOWS. THE RESPONDENT - ASSESSEE IS A PARTNERSHIP FIRM WHICH IS, INTER - ALIA , ENGAGED IN THE BUSINESS OF CUSTOMS HOUSE AGENT (CHA) IN ACCORDANCE WITH THE LICENSING CONDITIONS PRESCRIBED BY THE CUSTOMS ACT, 1961. A SURVEY ACTION U/S 133A OF THE ACT WAS CARR IED OUT IN THE PREMISES OF ASSESSEE ON 24.2.2011 IN CONSEQUENCE OF WHICH ORDERS U/S 201(1) AND 201(1A) OF THE ACT WERE PASSED BY THE ASSESSING OFFICER FOR THE CAPTIONED ASSESSMENT YEARS. FOR ASSESSMENT YEAR 2008 - 09, ASSESSING OFFICER FOUND THE ASSESSEE AS AN ASSESSEE IN DEFAULT FOR NOT HAVING DEDUCTED TAX AT SOURCE UNDER VARIOUS SECTIONS PRESCRIBED IN CHAPTER XVII - B OF THE ACT . AS A CONSEQUENCE, A DEMAND OF RS.94,24,617/ - WAS DETERMINED U/S 201(1) R.W.S. 201(1A) OF THE ACT. THE ASSESSEE FIRM CARRIED TH E MATTER IN APPEAL BEFORE CIT(A) WHO HAS DISAGREED WITH THE ASSESSING OFFICER AND ALLOWED THE PLEAS OF ASSESSEE ON VARIOUS ISSUES AGAINST WHICH REVENUE IS IN APPEAL BEFORE US. 5. THE FIRST ISSUE BEFORE US IS MANIFESTED BY GROUND OF APPEAL NOS. 1 AND 2, WHEREIN AS PER THE ASSESSING OFFICER, ASSESSEE OUGHT TO HAVE DEDUCTED TAX AT SOURCE U/S 194I OF THE ACT ON PAYMENTS MADE TO CENTRAL WAREHOUSING CORPORATION (CWC), CONTAINER FREIGHT S TATION (CFS), BOMBAY PORT TRUST (BPT) AND AIRPORT AUTHORITY OF INDIA (AAI) FOR SERVICES RENDERED BY SUCH ENTITIES WHICH INCLUDED USE OF SPACE FOR STORAGE OF IMPORTED/EXPORTED MATERIALS. AS PER ASSESSING OFFICER SUCH PAYMENTS WERE TO BE CONSTRUED AS PAYME NT OF RENT WITHIN THE MEANING OF SEC. 5 M/S. CHINUBHAI KALIDAS & BROS. ITA NOS. 1513 TO 1515 & 5459/MUM/2013 194I OF THE ACT AND THUS, ASSESSEE HAVING NOT DEDUCTED TAX AT SOURCE, WAS AN ASSESSEE IN DEFAULT IN TERMS OF SEC. 201(1) AND 201(1A) OF THE ACT. THE PLEA OF ASSESSEE, WHICH HAS BEEN ACCEPT E D BY CIT(A) , IS THAT SUCH PAYMENTS HAVE BEEN MADE ON BEHALF OF ITS CLIENTS/CUSTOMERS FOR WHICH ASSESSEE CLAIMED REIMBURSEMENT FROM ITS CLIENTS. IT WAS, THEREFORE, ASSERTED BY THE ASSESSEE THAT SAME DID NOT CONSTITUTE AN EXPENDITURE FOR THE ASSESSEE SO AS TO BE CONSTRUED AS RENT WITHIN THE MEANING OF SEC. 194I OF THE ACT. IT WAS ALSO EXPLAINED THAT SUCH EXPENSES, FOR INSTANCE, FREIGHT STATION CHARGE (CFS) ARE STATUTORY EXPENSES WHICH ARE PAID FOR REMOVAL OF THE MATERIAL FROM THE SHIP/STEAMER. ALL SUCH CHARGES ARE PAID ON B EHALF OF THE IMPORTER/EXPORTER WHICH ARE REIMBURSED TO THE ASSESSEE ON ACTUAL BASIS AGAINST THE RECEIPTS ISSUED TO THE ASSESSEE BY THE RECIPIENTS. THE CIT(A) HAS IN HIS DETAILED ORDER UPHELD THE PLEA OF ASSESSEE THAT ON SUCH PAYMENTS NO DEDUCTION OF TAX A T SOURCE IS REQUIRED TO BE MADE U/S 194I OF THE ACT. PERTINENTLY, CIT(A) HAS ALSO REFERRED TO THE HANDLING OF CARGO IN CUSTOMS AREAS REGULATIONS, 2009 ISSUED BY THE DEPARTMENT OF REVENUE, MINISTRY OF FINANCE AND OTHER REGULATORY PROVISIONS TO CULL OUT THE OBLIGATIONS AND RESPONSIBILITIES OF CUSTOMS HOUSE AGENT. ON THIS BASIS, HE HAS OBSERVED THAT THE RESPONDENT - ASSESSEE, WHO IS A CUSTOMS HOUSE AGENT (CHA), ONLY ACTS AS AN INTERMEDIARY AND ITS SERVICES ARE CONSUMED BY THE RESPECTIVE IMPORTER/EXPORTER AN D THAT ANY ARRANGEMENT REFLECTED BY IMPUGNED PAYMENTS IS TO BE VIEWED BETWEEN SUCH IMPORTER/EXPORTER AND THE ULTIMATE RECIPIENTS OF PAYMENTS , NAMELY CWC, CFS, BPT AND AAI. IN THIS BACKGROUND, CIT(A) HELD THAT ASSESSEE HAD NO OBLIGATION TO DEDUCT TAX AT SO URCE U/S 194I OF 6 M/S. CHINUBHAI KALIDAS & BROS. ITA NOS. 1513 TO 1515 & 5459/MUM/2013 THE ACT, AND THEREFORE, IT COULD NOT BE TREATED AS AN ASSESSEE IN DEFAULT WITHIN THE MEANING OF SEC. 201(1) AND 201(1A) OF THE ACT. 6. AGAINST THE AFORESAID, THE ONLY PLEA BROUGHT OUT BY THE LD. DR IS THAT THE MEANING OF EXPRESSION RENT USED IN SEC. 194I OF THE ACT IS VERY WIDE AND WOULD INCLUDE WITHIN ITS SWEEP PAYMENT BY WHATEVER NAME CALLED, MADE IN PURSUANCE OF ANY ARRANGEMENT OR AGREEMENT AND, THEREFORE, UNDER THE PRESENT CIRCUMSTANCES THE PAYMENT MADE BY THE ASSESSEE CONSTITUTED R ENT WHICH WAS LIABLE FOR DEDUCTION OF TAX AT SOURCE U/S 194I OF THE ACT. 7. ON THE OTHER HAND, THE LEARNED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THE DEPAR T MENT HAD TAKEN SIMILAR ACTION IN A MULTIPLE SET OF CASES INVOLVING CUSTOMS HOUSE AGENTS AND THAT IN A FEW OF SUCH CASES, TRIBUNAL HAS ALREADY ADJUDICATED THE ISSUE AND UPHELD THE STAND OF ASSESSEE THAT SUCH PAYMENTS ARE NOT LIABLE FOR DEDUCTION OF TAX AT SOURCE U/S 194I OF THE ACT. IN THIS CONTEXT, OUR ATTENTION WAS DRAWN TO THE FOLLOWING DE CISIONS, WHEREIN THE STAND OF ASSESSEE HAS BEEN UPHELD: I) CIT V. CARGO LINKERS, (2008) 218 CTR (DEL) 695 II) HAH LOGISTICS V. DCIT ITA NO. 1864/DEL/2011 III) DCIT V. JAY KAY FREIGHTERS PVT. LTD., ITA NO. 3407/DEL/2011 IV) ITO V. M/S. UNIVERSAL TRAFFIC CO . & ITO V. M/S. EXPRESS TRANSPORT PVT. LTD., ITA NOS. 1426 TO 1429/MUM/2013 AND 1473 TO 1475/MUM/2013 APART THEREFROM, RELIANCE HAS BEEN ALSO PLACED ON AN ANOTHER DECISION OF THE TRIBUNAL IN THE CASE OF M DHARAMDAS AND COMPANY, ITA NOS. 7 M/S. CHINUBHAI KALIDAS & BROS. ITA NOS. 1513 TO 1515 & 5459/MUM/2013 1505 TO 1507/MUM/2 013 DATED 10.7.2015 , WHEREIN THE UNDERSIGNED WAS ONE OF THE MEMBERS CONSTITUTING THE BENCH , WHEREIN ALSO, THE PLEA OF ASSESSEE HAS BEEN UPHELD. 8. ON THE OTHER HAND, LD. DR HAS NOT REFERRED TO ANY CONTRARY DECISION. IN THIS VIEW OF THE MATTER AND CONSIDE RING THE FINDINGS OF CIT(A) NOTED ABOVE, WHICH HAVE NOT BEEN CONTROVERTED BY THE DEPARTMENT BEFORE US, WE APPROVE THE CONCLUSION OF CIT(A) THAT THE PAYMENTS MADE TO CWC, CFS, BPT AND AAI CANNOT BE CONSTRUED AS RENT FOR THE PURPOSES OF SEC. 194I OF THE AC T. THUS, INSOFAR AS GROUND OF APPEAL NOS. 1 AND 2 ARE CONCERNED, SAME ARE DISMISSED. 9. THE ISSUE RAISED BY REVENUE IN GROUND OF APPEAL NO. 3 RELATES TO SURVEY FEES PAID BY THE ASSESSEE ON WHICH NO TAX WAS DEDUCTED AT SOURCE. T HE STAND OF ASSESSING OFFI CER IS THAT SUCH PAYMENTS ARE LIABLE FOR DEDUCTION OF TAX AT SOURCE U/S 194J OF THE ACT ON THE GROUND THAT SUCH PAYMENTS ARE IN THE NATURE OF FEES FOR PROFESSIONAL OR TECHNICAL SERVICES. ON THIS ASPECT ALSO, CIT(A) HAS DIFFERED WITH THE ASSESSING OFFICER AND HELD THAT ASSESSEE WAS NOT LIABLE FOR DEDUCTION OF TAX AT SOURCE U/S 194J OF THE ACT. AS PER CIT(A), SERVICE FEES IS PAID TO PERSONS OR AGENCIES FOR INSPECTION OF GOODS WHICH IS REQUIRED TO BE DONE WHILE IMPORTING/EXPORTING THE GOODS. THE CIT(A) HAS NOTED THAT SUCH INSPECTION OF CARGO IS ONE OF THE INTEGRAL STEPS IN CUSTOMS CLEARANCE PROCEDURE AT THE EXPORT STATIONS AND THAT WHILE MAKING SUCH PAYMENTS, ASSESSEE ONLY ACTS AS AN INTERMEDIARY BECAUSE SUCH PAYMENTS ARE MADE ON BEHALF OF THE IMPORTERS/EXPO RTERS AND ASSESSEE THEREAFTER OBTAINS REIMBURSEMENTS. THUS, CIT(A) HELD THAT THE ASSESSEE CANNOT BE 8 M/S. CHINUBHAI KALIDAS & BROS. ITA NOS. 1513 TO 1515 & 5459/MUM/2013 CONSTRUED AS AN ASSESSEE IN DEFAULT WITHIN THE MEANING OF SEC. 201(1) AND 201(1A) OF THE ACT AS ASSESSEE HAD NO OBLIGATION TO DEDUCT TAX AT SOURCE . 10. ON THIS ASPECT OF THE CONTROVERSY ALSO, WE FIND NO ERROR ON THE PART OF CIT(A) BECAUSE THE PAYMENTS HAVE BEEN MADE BY THE ASSESSEE IN THE CAPACITY OF AN INTERMEDIARY BETWEEN ITS CLIENT EXPORTER/IMPORTER AND THE RECIPIENTS WHO HAVE CONDUCTED THE INSPECTION OF GOODS SO AS TO FACILITATE CUSTOMS CLEARANCE. THE REASONING ADVERTED BY THE CIT(A) IS SIMILAR TO THAT CONSIDERED BY US WHILE DEALING WITH THE PAYMENTS MADE TO CWC, CFS, BPT AND AAI AND, THEREFORE, THE CONCLUSION DRAWN BY CIT(A) TO THE EFFECT THAT ASSESS EE CANNOT BE CONSTRUED AS AN ASSESSEE IN DEFAULT WITHIN THE MEANING OF SEC. 201(1) AND 201(1A) OF THE ACT IS HEREBY UPHELD. THUS, IN GROUND OF APPEAL NO. 3 ALSO REVENUE FAILS. 11. THE ISSUE RAISED BY THE REVENUE IN GROUND OF APPEAL NO. 4 RELATES TO INTERNET CHARGES PAID BY THE ASSESSEE ON WHICH NO TAX WAS DEDUCTED AT SOURCE. THE FACT - POSITION IS THAT SUCH PAYMENTS HAVE BEEN MADE BY THE ASSESSEE - FIRM TO CONCERN S PROVIDING BROADBAND FACILITIES. AS PER THE ASSESSING OFFICER, PAYMENTS HAVE BEEN MADE FO R OBTAINING A TECHNICAL SERVICE AND, THEREFORE, TAX WAS LIABLE TO BE DEDUCTED AT SOURCE U/S 194J OF THE ACT. NOTABLY, SEC. 194J OF THE ACT PRESCRIBES FOR DEDUCTION OF TAX AT SOURCE ON PAYMENTS MADE FOR OBTAINING ANY MANAGERIAL, TECHNICAL OR CONSULTANCY SE RVICES, AS ALSO FOR SERVICES OF TECHNICAL OR OTHER PERSONNEL , WHICH COULD BE REGARDED AS FEES PAID FOR TECHNICAL SERVICES. THE STAND OF ASSESSEE WAS THAT THE BROADBAND COMPAN Y DID NOT PROVIDE ANY TECHNICAL KNOWLEDGE TO THE ASSESSEE AND THAT THE BROADBAND 9 M/S. CHINUBHAI KALIDAS & BROS. ITA NOS. 1513 TO 1515 & 5459/MUM/2013 SERVICE PROVIDER WAS HAVING A STANDARD NETWORK FACILITY AND ASSESSEE OR ANY OTHER PERSON IS ALLOWED TO AVAIL SUCH FACILITIES T O CONNECT TO THE INTERNET. THE PLEA OF THE ASSESSEE WAS THAT INTERNET CONNECTIVITY HAS BEEN AVAILED BY IT FOR ITS BUSINESS PURPOS E. THE CIT(A) HAS HELD THAT WHEN AN ASSESSEE UTILIZES A STANDARD TELECOMMUNICATION NETWORK FACILITY BELONGING TO A SERVICE PROVIDER, IT DOES NOT INVOLVE RENDERING OF ANY TECHNICAL SERVICES SO AS TO REQUIRE THE PAYER TO DEDUCT TAX AT SOURCE U/S 194J OF THE ACT. IN COMING TO SUCH A DECISION, CIT(A) HAS RELIED UPON THE JUDGMENT OF THE HON'BLE MADRAS HIGH COURT IN THE CASE OF SKYCELL COMMUNICATIONS LTD. VS. DCIT, 251 ITR 53 AS ALSO THE DECISION OF CHANDIGARH BENCH OF THE TRIBUNAL IN THE CASE OF HCL INFOTEL LT D. VS. ITO (99 TTJ 440) . AGAINST SUCH A DECISION, REVENUE IS IN APPEAL BEFORE US. 12. AFTER CONSIDERING THE RIVAL STANDS ON THIS ISSUE, IN OUR VIEW, THE PARITY OF REASONING LAID DOWN BY THE HON'BLE MADRAS HIGH COURT IN THE CASE OF SKYCELL COMMUNICATIONS LTD. (SUPRA) CLEARLY COVERS THE CONTROVERSY AGAINST THE REVENUE. IN THE CASE BEFORE THE HON'BLE MADRAS HIGH COURT, IT HAS BEEN HELD THAT THE MOBILE TELEPHONE FACILITIES PROVIDED BY THE CELL PHONE COMPANIES TO THEIR SUBSCRIBERS FOR MAKING/RECEIVING CALLS E TC. CANNOT BE CONSTRUED AS TECHNICAL SERVICES AND THUS, IT CANNOT BE BROUGHT INTO THE AMBIT OF SEC. 194J OF THE ACT. IN THE PRESENT CASE, WHEN THE ASSESSEE IS AVAILING INTERNET SERVICES FROM THE BROADBAND SERVICE PROVIDER , IT DOES NOT ENTAIL THAT SUCH B ROADBAND SERVICE PROVIDER IS MAKING AVAILABLE A TECHNICAL SERVICE SO AS TO REQUIRE THE ASSESSEE TO DEDUCT TAX AT SOURCE U/S 194J OF THE ACT. THEREFORE, WE HEREBY AFFIRM THE ORDER OF CIT(A) ON THIS ASPECT ALSO. ACCORDINGLY, REVENUE FAILS IN GROUND OF AP PEAL NO. 4 ALSO. 10 M/S. CHINUBHAI KALIDAS & BROS. ITA NOS. 1513 TO 1515 & 5459/MUM/2013 13. THE ISSUE RAISED BY THE REVENUE IN GROUND OF APPEAL NO. 5 RELATES TO PAYMENT MADE TOWARDS HIRING OF F ORKLIFT/ C RANES ON WHICH ASSESSEE HAD DEDUCTED TAX AT SOURCE IN TERMS OF SEC. 194C OF THE ACT, WHEREAS AS PER THE ASSESSING OFFICER, T AX WAS LIABLE TO BE DEDUCTED U/S 194I OF THE ACT TREATING THE PAYMENTS TO BE IN THE NATURE OF RENT. ACCORDINGLY, ASSESSEE WAS HELD TO BE AN ASSESSEE IN DEFAULT FOR SHORT DEDUCTION OF TAX AT SOURCE U/S 201(1) AND 201(1A) OF THE ACT. IN THIS CONTEXT, T HE PLEA OF THE ASSESSEE WAS THAT THE PAYMENTS WERE MADE TO THE CONTRACTORS FOR SERVICES OF HANDLING AND TRANSPORTATION OF CARGO AFTER THE CUSTOMS CLEARANCE. ASSESSEE EXPLAINED THAT IT HIRED SERVICES OF CONTRACTORS FOR HANDLING OF THE GOODS AND IN THE COUR SE OF PROVIDING SUCH SERVICE, THE CONTR ACTORS ENGAGED THE SERVICES OF C RANES AND F ORKLIFT OPERATORS. THE ASSESSEE EXPLAINED THAT IT CONSIDERED THE SERVICES BEING PROVIDED BY THE CONTRACTORS AS A COMPOSITE SERVICE FOR HANDLING OF GOODS ON WHICH THE REQUI SITE TAX WAS DEDUCTED AT SOURCE IN TERMS OF SEC. 194C OF THE ACT. IT WAS POINTED OUT THAT THERE WAS NO CONTRACT ENTERED BY THE ASSESSEE FOR HIRING OF F ORKLIFTS AND C RANES SPECIFICALLY SO AS TO HOLD THAT ASSESSEE HAD MADE ANY PAYMENTS TOWARDS RENTAL OF F ORKLIFTS AND C RANES. THE CIT(A) HAS ACCEPTED THE PLEA OF ASSESSEE BY NOTICING THAT THE PAYMENTS IN QUESTION WERE MADE BY THE ASSESSEE TOWARDS A COMPOSITE CONTRACT FOR HANDLING OF THE GOODS AND THAT IT IS THE CONTRACTORS WHO HAD IN - TURN HIRED THE C RANES/ F ORKLIFTS FOR THEIR USE. THUS, CIT(A) UPHELD THE STAND OF ASSESSEE THAT SUCH PAYMENTS ARE SUBJECT TO DEDUCTION OF TAX AT SOURCE U/S 194C AND NOT U/S 194I OF THE ACT , AS CONTENDED BY THE ASSESSING OFFICER. 11 M/S. CHINUBHAI KALIDAS & BROS. ITA NOS. 1513 TO 1515 & 5459/MUM/2013 14. BEFORE US, THE LD. DR HAS MERELY POINTED OUT THAT THE PAYMENTS MADE BY THE ASSESSEE INCLUDED CHARGES FOR HIRE/RENTAL OF MACHINERIES WHICH ATTRACT DEDUCTION OF TAX AT SOURCE U/S 194I OF THE ACT. 15. ON THE OTHER HAND, THE LEARNED REPRESENTATIVE FOR RESPONDENT - ASSESSEE POINTED OUT THAT MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF ACIT VS. ACCENTURE SERVICES (P.) LTD., 44 SOT 290 (MUM.) HAS HELD THAT SEC. 194I OF THE ACT IS NOT ATTRACTED WHERE PAYMENTS ARE MADE FOR AVAILING OF TRANSPORT SERVICES INSPITE OF THE FACT THAT IT INVOLVED USE OF TRANSPORT VEHIC LES. 16. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS. THE CHARGE BEING MADE BY THE ASSESSING OFFICER IS THAT PAYMENT TO CONTRACTORS INVOLVED CHARGES FOR RENTING OF C RANES/ F ORKLIFTS , AND T HEREFORE, SUCH PAYMENTS WOULD FALL WITHIN THE MEANING OF RE NT FOR THE PURPOSES OF SEC. 194I OF THE ACT. IN OUR CONSIDERED OPINION, HAVING REGARD TO THE FACTUAL MATRIX BROUGHT OUT BY THE CIT(A), ASSESSING OFFICER H AS CLEARLY FAILED TO APPRECIATE THE NATURE OF EXPENSES IN ITS TRUE PERSPECTIVE. FACTUALLY SPEAKING, THE PAYMENTS HAVE BEEN MADE TO THE CONTRACTORS FOR PROVIDING SERVICES OF HANDLING AND TRANSPORTATION OF CARGO AFTER THE CUSTOMS CLEARANCES WERE OBTAINED. SUCH CHARGES, INTER - ALIA, ENTAILED LOADING AND UNLOADING OF CARGO FOR WHICH THE CONTRACTORS UTILIZED F ORKLIFTS/ C RANES BEING MAINTAINED BY THEM. QUITE CLEARLY, ASSESSEE HAS NOT ENTERED I NTO ANY CONTRACT FOR HIRING OF F ORKLIFTS OR C RANES, BUT IT IS A CASE WHERE THE CONTRACTOR HAS UTILIZED THE SAME IN DISCHARGE OF HIS SERVICES TO THE ASSESSEE - FIRM. THEREF ORE, IN SUCH A SITUATION, IT IS NOT POSSIBLE TO CONCLUDE THAT ASSESSEE CONTRACTED FOR RENTING OF 12 M/S. CHINUBHAI KALIDAS & BROS. ITA NOS. 1513 TO 1515 & 5459/MUM/2013 F ORKLIFTS/ C RANES SO AS TO TREAT THE PAYMENTS AS RENT FOR THE PURPOSES OF SEC. 194I OF THE ACT. CIT(A), IN OUR VIEW, CORRECTLY CAME TO CONCLUDE THAT THE PAYMENTS HAVE BEEN MADE BY THE CONTRACTOR S AGAINST WORK EXECUTED ON BEHALF OF THE ASSESSEE WHICH CLEARLY ATTRACTS DEDUCTION OF TAX AT SOURCE U/S 194C OF THE ACT AND NOT U/S 194I OF THE ACT , AS CONTENDED BY THE ASSESSING OFFICER. THUS, ON THIS ASPECT ALSO REVENUE FAILS. 17. THE NEXT ISSUE RAISED BY THE REVENUE BY WAY OF GROUND OF APPEAL NO. 6 RELATES TO PAYMENTS MADE TOWARDS FUMIGATION CHARGES. IN THIS CONTEXT, ASSESSING OFFICER NOTICED THAT ASSESSEE HAD PAID FUMIGATION (PEST CONTROL) CHARGES ON WHICH TAX WAS DEDUCTED U/S 194C OF THE ACT WHEREAS ACCORDING TO ASSESSING OFFICER, TAX OUGHT TO HAVE BEEN DEDUCTED IN TERMS OF SEC. 194J OF THE ACT CONSIDERING SUCH PAYMENTS AS FEES FOR TECHNICAL OR PROFESSIONAL SERVICES. CIT(A) UPHELD THE STAND OF ASSESSEE BY CON CLUDING THAT SUCH SERVICES DO NOT INVOLVE RENDERING OF ANY PROFESSIONAL OR TECHNICAL SERVICES AND THAT DEDUCTION OF TAX AT SOURCE U/S 194C OF THE ACT WAS CORRECTLY DONE BY THE ASSESSEE. AGAINST SUCH A DECISION, REVENUE IS IN APPEAL BEFORE US. 18. BEFORE US, LD. DR HAS REITERATED THE STAND OF THE ASSESSING OFFICER THAT THE SERVICES ARE IN THE NATURE OF TECHNICAL OR PROFESSIONAL SERVICES, WHICH WOULD REQUIRE DEDUCTION OF TAX AT SOURCE U/S 194J OF THE ACT. IN OUR CONSIDERED OPINION, THE PLEA RAISED BY REVEN UE IS WITHOUT ANY BASIS. FACTUALLY SPEAKING, IT EMERGES FROM RECORD THAT THE PERSONS ENTRUSTED WITH THE JOB OF FUMIGATION CARR Y OUT SPRAYING OF CHEMICALS , ETC. TO PREVENT ATTACK OF PESTS SO THAT CARGO/GOODS BEING HANDLED BY THE 13 M/S. CHINUBHAI KALIDAS & BROS. ITA NOS. 1513 TO 1515 & 5459/MUM/2013 ASSESSEE DO NOT GET DAMAGED . OSTENSIBLY, THE PAYMENTS MADE BY ASSESSEE WOULD, INTER - ALIA, INCLUDE COST OF CHEMICALS, PESTICIDES, ETC. APART FROM BALD ASSERTIONS, REVENUE HAS NOT BEEN ABLE TO DEMONSTRATE THE USE OF ANY TECHNICAL INFORMATION OR SKILL WHICH IS REQUIRED TO PERFORM SUC H FUMIGATION ACTIVITIES AND, THEREFORE, INVOKING OF SEC. 194J OF THE ACT IN THE PRESENT CASE IS UNWARRANTED AND HAS BEEN CORRECTLY NEGATED BY THE CIT(A). THUS, ON THIS ASPECT ALSO, REVENUE FAILS. 19. GROUNDS OF APPEAL NO. 7 AND 9 RELATE TO INTEREST LEVIE D U/S 201(1A) OF THE ACT, WHICH HAS BEEN DELETED BY CIT(A). SINCE THE ASSESSEE HAS NOT BEEN FOUND TO BE IN DEFAULT WITHIN THE MEANING OF SEC. 201(1) OF THE ACT, DELETION OF INTEREST U/S 201(1A) OF THE ACT IS CONSEQUENTIAL AND HAS BEEN RIGHTLY DELETED BY T HE CIT(A). THUS, THE SAID GROUNDS ARE DISMISSED. 20. THE ONLY GROUND REMAINING IS GROUND OF APPEAL NO. 8 WHICH IS ONLY A REPETITION OF ISSUES WHICH HAVE ALREADY BEEN DEALT WITH BY US IN THE EARLIER PARAS . THUS, THE SAID GROUND IS DISMISSED AS MISCONCEIV ED . 21. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. 22. INSOFAR APPEALS FOR ASSESSMENT YEAR 2009 - 10 TO 2011 - 12 ARE CONCERNED, THE ISSUES AS WELL AS THE FACTS AND CIRCUMSTANCES ARE PARI MATERIA TO THOSE CONSIDERED BY US IN THE REVENUES APPEAL FOR ASSESSMENT YEAR 2008 - 09 IN THE EARLIER PARAGRAPHS; AND, THUS OUR DECISION IN THE APPEAL FOR ASSESSMENT YEAR 2008 - 09 SHALL MUTATIS MUTANDIS APPLY FOR ASSESSMENT YEARS 2009 - 10 TO 2011 - 12 ALSO. 14 M/S. CHINUBHAI KALIDAS & BROS. ITA NOS. 1513 TO 1515 & 5459/MUM/2013 23. RESUL TANTLY, ALL THE APPEALS OF REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 2 3 R D SEPTEMBER, 2016. SD/ - SD/ - ( PAWAN SINGH ) JUDICIAL MEMBER ( G.S. PANNU ) ACCOUNTANT MEMBER MUMBAI, DATE : 2 3 R D SEPTEMBER , 2016 * SSL * COPY TO : 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT(A) CONCERNED 4) THE CIT CONCERNED 5) THE D.R, C BENCH, MUMBAI 6) GUARD FILE BY ORDER DY./ASSTT. REGISTRAR I.T.A.T, MUMBAI