ITO (TDS) 2(3), MUMBAI V. MITSUI OSK LINES ( INDIA) P.LTD, MUMBAI

ITA 5520/MUM/2013

• Counselvise Citation: 552019914 RSA 2013
• Duration Of Justice: 1 year(s) 9 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-06-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 17-06-2015
• Assessment Year: 2004-2005
• Appeal Filed On: 21-08-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RADHA K NARANG SR
• Keywords: Non-deduction of tax
• Section: 194C

Judgement Text

, INCOME TAX APPELLATE TRIBUNAL,MUMBAI B BENCH , , , BEFORE S/SH. JOG INDER SINGH,JUDICIAL MEMBER & RAJENDRA,ACCOUNTANT MEMBER /. ITA NO. 5520 & 5521 /MUM/2013, / ASSESSMENT YEAR - 2004 - 05 & 2005 - 06 INCOME TAX OFFICER (TDS) - 2(3) ROOM NO.708, 7 TH FLOOR SMT. K.G. MITTAL AYURVEDIC HOSPIT AL BUILDING, CHARNI ROAD MUMBAI - 400 002. VS MITSUI OSK LINES (INDIA) PVT. LTD. 53B & 54, 5 TH FLOOR KALPATARU SQUARE, KONDIVITA LANE OFF ANDHERI KURLA ROAD, ANDHERI(E) , MUMBAI - 400 059. PAN: A ADCM 1073 B ( / APPELLANT ) ( / RESPONDENT ) / ASSESSEE BY : MS. AARTI VISSANJI / REVENUE BY : MS. RADHA K. NARANG - SR. AR / DATE OF HEARING : 1 7 - 06 - 2015 / DATE OF PRONOUNCEMENT : 1 7 - 06 - 2015 , 1961 254 ( 1 ) ORDER U/S.254(1)OF THE INCOME - TAX ACT,1961(ACT) PER RAJENDRA, AM - CHALLENGING THE ORDER DATED 14.5.2013 OF THE CIT(A) - 14 , MUMBAI, FOR THE ABOVE MENTIONED TWO YEARS THE ASSESSING OFFICER (AO) HAS RAISED FOLLOWING IDENT ICAL GROUND S OF APPEAL: I) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE ID. CIT(A) ERRED IN HOLDING THAT THE ASSESSEE WAS UNDER NO LIABILITY TO DEDUCT TAX U/S 194J OF INCOME TAX ACT 1961 AND DELETING THE DEMAND RAISED BY THE AO VI DE ORDER U/S.201(1)1/201(1A) OF THE INCOME TAX ACT ON ACCOUNT OF SHORT DEDUCTION OF TAX ON THE PAYMENTS MADE TO NHAVA SHEVA INTERNATIONAL CONTAINER TERMINAL PRIVATE LIMITED WITHOUT APPRECIATING THE FACT THAT THE AO WAS RIGHT IN HOLDING THE ASSESSEE AS ASSESSEE IN DEFAULT WITHIN THE PROVISIONS OF SECTION 194J IN HIS ORDER U/S 201(1)1/201(1A) OF THE INCOME TAX ACT, 1961. II) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE ID. CIT(A) ERRED IN HOLDING THAT THE PAYMENTS MADE TO NHAVA SHE VA INTERNATIONAL CONTAINER TERMINAL PRIVATE LIMITED ARE NOT IN THE NATURE OF 'FEES FOR PROFESSIONAL SERVICES' BUT THE PAYMENTS ARE FOR CARRIAGE OF GOODS AND THUS DEFINED AS 'WORK' IN EXPLANATION III TO SECTION 194C(2) OF THE ACT, AND HENCE THE SAME ARE NOT COVERED UNDER THE PROVISIONS OF SECTION 194J OF THE INCOME TAX ACT, 1961. III) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE ID. CIT(A) ERRED IN NOT APPRECIATING THE FACT THAT THE CONTAINER HANDLING SERVICES ARE TECHNICAL SERVI CES RENDERED BY NHAVA SHEVA INTERNATIONAL CONTAINER TERMINAL PRIVATE LIMITED WHICH REQUIRES TDS U/S.194J OF THE I. T. ACT. IV) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) HAS ERRED 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 DELETED BY HIM AND INTEREST DELETION IS CONSEQUENTIAL TO THE QUANTUM DELETION FOR WHICH FURTHER APPEAL HAS BEEN RECOMMENDED VIDE GROUND NO . I TO III. ITA/ 5520 & 21 /MUM/201 3 , - AY. 05 - 06 - MITSUI OSK LINES 2 2. THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER OR MODIFY ANY GROUND WHICH MAY BE NECESSARY AT THE TIME OF THE HEARING OF THE CASE OR THEREAFTER. 3. THE ORDER OF THE CIT(A) BEING ERRONEOUS BE SET ASIDE AND A.O'S ORDER BE RESTORED. 2 . ASSESSEE IS ENGAGED IN THE BUSINESS OF SHIPPING AND IS AN AGENT FOR MITSUI O.S.K. LINES LTD. OF J APAN IN I NDIA . A SURVEY ACTION U/S.133 A OF THE ACT WAS CARRIED OUT AT THE BUSINESS PREMISES OF THE ASSESSEE ON 9.3. 20 05 SO AS TO ASCERTAIN/VERIFY WHETHER TH E A SSESSEE - COMPANY PROPERLY COMPLIED WITH THE PROVISIONS OF THE CHAPTER VII - B OF THE ACT. DURING THE COURSE OF SURVEY IT WAS OBSERVED THAT THE ASSESSEE HAD MADE PAYMENT OF RS.10, 77, 35,393/ - TO M/S. NHAVA SHEVA INT ERNATIONA L C ONTAINER P RIVATE L IMITED (NSICPL) , THAT IT HAD DEDUCTED TAX AT SOURCE @2% U/S. 194C OF THE ACT. THE AO WAS OF THE OPINION THAT ASSESSEE SHOULD HAVE DEDUCTED TAX U/S. 194J OF THE ACT, THAT NSICPL WAS RENDERING TECHNICAL SERVICES TO ITS CLIENTS, THAT CONTAINER HANDLING WAS TECHNICAL AND SPE CIALIZED SERVICE, THAT NSICPL PROVIDED TECHNICAL ASSISTANCE TO ITS CUSTOMER WITH MACHINES AND TECHNICAL MANPOWER, THAT ANY PAYMENT MADE TO NSICPL ON ACCOUNT OF CONTAINER HANDLING CHARGES SHOULD BE SUBJECTED TO TDS U/S. 194J OF THE ACT AND NOT U/S. 194C OF THE ACT. FINALLY, THE AO HELD THAT THE ASSESSEE WAS DEEMED TO BE AN ASSESSEE INDEFAULT. FINALLY THE AO TREATED THE ASSESSEE DEEMED TO BE AN ASSESSEE IN DEFAULT FOR ITS FAILURE TO DEDUCT TAX AT SOURCE @ 5 .5%. H E WORKED OUT THE DEFAULT TO RS. 59 , 25,477/ - U/S. 201 (1) OF THE ACT. AS THE ASSESSEE HAD PAID THE TAX @2% HE WORKED OUT THE LIABILITY AT RS.37.70 LACS. HE FURTHER CALCULATED INTEREST U/S. 201(1)(A) FOR THE PERIOD FROM 1.4.2004 TO 28 .2.2011 @ 1% AT RS.31,29,713/ - . THUS, THE ASSESSEE COMPANY WAS DIRECTED T O MAKE PAYMENT OF RS. 69, 00 , 452/ - ( RS. 37.70 + 31.29 LACS). 3. AGGRIEVED BY THE ORDER OF THE AO,THE ASSESSEE PREFERRED AN APPEAL BEFORE THE FIRST APPE LLATE AUTHORITY(FAA).BEFORE HIM, IT WAS CONTENDED T HAT THE COMPANY ACTED AS AN AGENT OF ITS PRINCIPAL , THAT THE SERVICES RENDERED BY NSICPL WERE COMPOSITE SERVICES AND COVERED BY SECTION 194C OF THE ACT, THAT THE JOB CARRIED OUT BY THE ASSESSEE WAS IN THE NATURE OF CARRYING OUT ANY WORK INCLUDING SUPPLY OF LABOUR OR CARRYING OUT ANY WORK IN PURSUANCE OF A CONTRAC T, THAT IT HAD CORRECTLY DEDUCTED THE TAX AT SOURCE AS PER PROVISIONS OF S.194C OF THE ACT, THAT THE PROV. OF S.194J WERE APPLICABLE IN RESPECT OF PAYMENT MADE BY WAY OF FEE FOR PROFESSIONAL SERVICES/ FEE FOR TECHNICAL SERVICES, THAT THE SERVICES RENDERED BY NSICPL COULD NOT FALL IN ANY OF THE PROFESSION THAT NSICPL RENDERED VARIOUS TECHNICAL SERVICES AND SAME COULD NOT BE BIFURCATED INTO DIFFERENT COMPARTMENTS REQUIRING OF DEDUCTION OF TAX AT SOURCE UNDER DIFFERENT PROVISIONS, NSICPL HAD BEEN ISSUED A CERT IFICATE U/S. 194C OF THE ACT BY THE AO STATING THAT NO TAX WAS REQUIRED T O BE DEDUCTED IN RESPECT OF PAYMENT MADE TO THEM DURING FINANCIAL YEAR ENDING ON 31.3.2003 , THAT SERVICES RENDERED BY NSICPL FELL NEITHER IN CATEGORY OF PROF ESSIONAL SERVICES NOR IN CA TEGORY OF FEE FOR TECHNICAL SERVICES . THE ASSESSEE REFERR E D TO CASE OF MERCHANT SHIPPING SERVICES PVT. LTD. ( 49 DTR 97) WHEREIN IT WAS HELD THAT PAYMENT MADE TO NSICPL WERE COVERED BY S.194C OF THE AND NOT BY S.194J. AFTER CONSIDERING THE SUBMISSION OF TH E ASSESS EE AND ORDER OF AO U/S . 201 , THE FAA HELD THAT THE PAYMENTS TO NSICPL ARE COVED BY THE PROVISIONS OF S.194C OF THE ACT, THAT THE ASSESSEE HAD RIGHTLY DEDUCTED TAX AT SOURCE @2%, THAT ASSESSEE COULD NOT BE TREATED AS AN ASSESSEE IN DEFAULT U/S. 201 (1) AND 201( 1A ). HE DELETED THE DEMAND RAISED ON ACCOUNT OF TAX AND THE INTERES T FOR THE YEAR UNDER APPEAL. 4. DURING THE COURSE OF HEARING BEFOR E US, THE DEPARTMENTAL REPRESENTATIVE ( DR ) SUPPORTED THE ORDER OF THE AO. AUTHORISED REPRESENTATIVE ( AR ) REFERRED T O THE ORDER OF THE TRIBUNAL DELIVERED ITA/ 5520 & 21 /MUM/201 3 , - AY. 05 - 06 - MITSUI OSK LINES 3 IN THE CASE OF MERCHANT S HIPPING S ERVICES P V T. L TD.(SUPRA). IT WAS ALSO MENTIONED THAT AS PER THE NOTIFICATION NO.57 OF 2005 DT.15.2.2005 THAT NSICPL GRANTED EXEMPTION U/S. 10(23G) OF THE ACT FROM AY 2005 - 06 FOR A PERI OD OF 30 YEARS. SHE ALSO RELIED UPON THE ORDER OF GLAX C O S MITH K LINE PHARMACEUTICALS LTD. ( 48 SOT 643 ) , ADITY A MARINE LTD. (224 TAXMANN 169) & YASH CONTAINER TERMINAL PVT. LTD. (ITA NO.6341/MUM/2009) AY 2007 - 08 ORDER DT.6.4.2011. 5. WE HAVE PERUSED THE MATE RIAL BEFORE US.WE FIND THAT WHILE DECIDING THE CASE OF MERCHANT SHIPPING SERVICES (P) LTD. T HE TRIBUNAL HAD DEALT THE ISSUE AS UNDER : - 2.THE ONLY GROUND RAISED BY THE REVENUE IS AGAINST THE DIRECTION OF THE LEARNED CIT(A) THAT PAYMENTS MADE TO NSICT BE TR EATED AS COVERED UNDER SECTION 194C AND NOT SECTION 194J. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT THE ASSESSEE - COMPANY IS A SHIPPING AGENT ANDLING VESSELS AT VARIOUS INDIAN PORTS. A SURVEY WAS CONDUCTED U/S.133A ON 09.03.2005 FOR VERIFICATION OF CO MPLIANCE OF DEDUCTION OF TAX AT SOURCE PROVISIONS. DURING THE COURSE OF SURVEY IT WAS DISCOVERED THAT IN THE FINANCIAL YEAR 2003 - 2004 THE ASSESSEE MADE PAYMENT OF RS.12,23,29,581 TO M/S.NAVA SHEVA INTERNATIONAL CONTAINER TERMINAL LIMITED (HEREINAFTER RE FERRED TO AS NSICT) AND DEDUCTED TAX AT SOURCE AT THE RATE OF 2.05% AS PROVIDED U/S.194C FOR WHICH AYMENT WAS MADE. THE ASSESSING OFFICER, DURING THE COURSE OF PROCEEDINGS U/SS.201(1) AND 201(1A), NOTED THAT NSICT ENTERED INTO TECHNICAL SERVICE AGREEME NT WITH P & O AUSTRALIA UNDER WHICH P & O AUSTRALIA WAS TO PROVIDE TECHNICAL KNOW - HOW TO THE ASSESSEE - COMPANY. IT AS LSO NOTED BY THE AO THAT NSICT HAD ALSO CHARGED SERVICE TAX ON THE PAYMENTS FROM THE ASSESSEE. THE ASSESSING OFFICER NOTED THAT AT THE T IME OF SURVEY IT WAS FOUND THAT NSICT WAS OPERATING ITS TERMINAL WITH 8 QUAY CRANES, 29 RUBBER TYRED QUANTRY CRANES, 3 RAIL MOUNTED GANTRY RANES AND MORE THAN 600 EMPLOYEES. IN PARA 10 OF THE ASSESSMENT ORDER, THE A.O. OBSERVED THAT P & O AUSTRALIA WAS TH E MAIN SHAREHOLDER OF NSICT THROUGH ITS HOLDING IN SOUTH ASIA PORT LIMITED AND UNDER THE AGREEMENT P & O AUSTRALIA SUPPLIED TECHNICAL KNOWHOW IN RETURN FOR FEES. IN VIEW OF THESE FACTS THE ASSESSING OFFICER OPINED THAT NSICT WAS RENDERING / PROVIDING TECHN ICAL AND SPECIALIZED SERVICES TO ITS CUSTOMERS INCLUDING THE ASSESSEE ALONG WITH MACHINES AND TECHNICAL MANPOWER AND HENCE TAX WAS DEDUCTIBLE U/S 194J. ON BEING SHOW CAUSED, THE CCOUNTS MANAGER OF THE ASSESSEE EXPLAINED THAT PAYMENTS MADE TO NSICT WERE FOR CONTAINER MOVEMENT UNDER THE CONTRACT AND THERE WERE NO PROFESSIONAL OR TECHNICAL SERVICES INVOLVED IN THE MOVEMENTS OF CONTAINERS. IT WAS EXPLAINED THAT THE SERVICES PROVIDED BY NSICT WERE OWARDS THE MOVEMENT OF CONTAINERS FROM CUSTOMERS TRAILERS / RAIL WAGONS TO YARD AND FROM THERE TO VESSELS IN RESPECT OF EXPORT CONTAINERS; AND FOR THE IMPORT CONTAINERS, THE PAYMENT WAS MADE FOR MOVING CONTAINERS FROM VESSELS ON TO THE TRAILERS AT THE QUAY SIDE AND FOR LIFTING OF RAILERS TO CUSTOMERS TRAILERS / RAIL W AGONS. IT WAS ARGUED THAT THE ASSESSEE HAD RIGHTLY DEDUCTED TAX AT SOURCE U/S.194C AND THE PROVISIONS OF SECTION 194J, SOUGHT TO BE APPLIED BY THE ASSESSING OFFICER, WERE NOT APPLICABLE. VIDE PARA 11 OF THE ASSESSMENT ORDER, THE ASSESSING OFFICER CCEPTED THE ASSESSEES CONTENTION THAT THE PAYMENT WAS MADE TOWARDS CONTAINER HANDLING CHARGES. HE HOWEVER HELD THAT CONTAINER HANDLING WAS A TECHNICAL AND SPECIALIZED SERVICE. IN HIS OPINION THE ASSESSEE - COMPANY WAS REQUIRED TO DEDUCT TAX AT SOURCE U/S.194J AND NOT U/S.194C. RESULTANTLY HE WORKED OUT SHORT DEDUCTION OF TAX AT SOURCE AT RS.36,08,701 U/S.201(1). FURTHER THE ASSESSEE WAS HELD TO BE LIABLE FOR PAYMENT OF INTEREST U/S.201(1A) AMOUNTING TO RS.24,90,004. 4. THE REVENUE IS AGGRIEVED AGAINST THE VIE W TAKEN BY THE LEARNED CIT(A) THAT THE TAX WAS REQUIRED TO BE DEDUCTED AT SOURCE UNDER SECTION 194C AND NOT SECTION 194J. THE LEARNED DEPARTMENTAL REPRESENTATIVE CONTENDED THAT IT WAS DISCOVERED DURING THE COURSE OF SURVEY THAT THE AYMENTS MADE BY NSICT W ERE IN THE NATURE OF FEES FOR TECHNICAL SERVICES AS THEY WERE PROVIDING SPECIALIZED SERVICES TO THE ASSESSEE. HE FURTHER ARGUED THAT P & O AUSTRALIA ENTERED INTO TECHNICAL SERVICE AGREEMENT WITH NSICT PROVIDING THEM THE TECHNICAL KNOWHOW, FROM WHERE IT WO ULD NATURALLY FOLLOW THAT NSICT ALSO PROVIDED TECHNICAL SERVICES TO ITS CUSTOMERS INCLUDING THE ASSESSEE. HE ITA/ 5520 & 21 /MUM/201 3 , - AY. 05 - 06 - MITSUI OSK LINES 4 FURTHER STATED THAT NSICT CHARGED SERVICE TAX IN ITS IN VOICES RAISED ON THE CUSTOMERS,W HICH WAS CLEAR INDICATOR OF THEY BEING PROVIDER OF TECHNI CAL SERVICES. THE LEARNED DEPARTMENTAL REPRESENTATIVE ARGUED THAT SECTION 194C APPLIES IN RESPECT OF PAYMENTS MADE TO CONTRACTORS, WHICH WAS NOT THE CASE UNDER CONSIDERATION. IT WAS, THEREFORE, STRENUOUSLY ARGUED THAT THE IEW TAKEN BY THE LEARNED CIT(A),ON THIS ISSUE, BE OVERTURNED. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD IN THE LIGHT OF PRECEDENTS CITED BEFORE US. IT IS NOTED THAT THE ASSESSEE COMPANY IS A SHIPPING AGENT ANDLING VESSELS FOR IMPORT AND EXPORT AT VARIOUS INDIAN PORTS ON BEHALF OF ITS CUSTOMERS. BEFORE WE PROCEED F URTHER, IT IS SINE QUA NON TO ZERO IN ON THE EXACT NATURE OF SERVICES FOR WHICH THE ASSESSEE MADE THE PAYMENTS IN QUESTION. ORDINARILY SHIPPING AGENT IS A PERSON WHOSE BUSINESS IS TO P REPARE SHIPPING DOCUMENTS, ARRANGE SHIPPING SPACE AND INSURANCE AND FURTHER DEAL WITH THE CUSTOMS REQUIREMENTS. IT IS APPARENT FROM THE ASSESSMENT ORDER THAT DURING THE COURSE OF ITS USINESS AS SHIPPING AGENT, THE ASSESSEE AVAILED THE SERVICES PROVIDED BY NSICT FOR THE MOVEMENT OF ITS CARGO IN RESPECT OF IMPORT AND EXPORT DONE BY ITS CUSTOMERS. THE MOVEMENT OF ARGO ON PORT, IN CASE OF EXPORT, INVOLVES DIFFERENT STAGES VIZ., LIFTING OF CONTAINERS FROM CUSTOMERS TRAILER/RAIL WAGONS BY THE OPERATION OF RUB BER TYRE GANTRY CRANES; MOVEMENT OF THE ONTAINERS F ROM YARD TO THE VESSEL SIDE; AND MOVING THE CONTAINERS FROM TRAILERS AT THE QUAY SIDE ON TO THE VESSEL WITH THE OPERATION OF QUAY CRANES. SIMILARLY THE MOVEMENT OF CARGO ON PORT, IN CASE OF I MPORT, INVOL VES DIFFERENT STAGES VIZ., MOVING THE CONTAINERS FROM VESSEL ON TO THE TRAILERS AT THE QUAY SIDE WITH THE OPERATION OF QUAY CRANE ; MOVEMENT OF THE CONTAINERS FROM YARD TO ESSEL IDE; AND OPERATION OF RUBBER TYRE GRANTRY CRANES / RAIL MOUNTED GANTRY CRANES FOR LIFTING THE CONTAINERS OFF FROM TRAILERS TO CUSTOMERS TRAILERS / RAIL WAGONS. THE ABOVE DESCRIPTION OF THE WORK DONE BY NSICT FOR THE ASSESSEE WAS BROUGHT TO THE NOTICE OF AUTHORITIES BELOW AND THE A.O. HAS RECORDED THE SAME IN PARA 10 OF THE ASSESSM ENT ORDER. THE VERACITY OF ABOVE NATURE OF SERVICES, AS STATED BY THE ASSESSEE TO HAVE BEEN PROVIDED BY NSICT, STOOD ESTABLISHED WHEN DURING THE COURSE OF SURVEY PROCEEDINGS IT WAS NOTED THAT NSICT OPERATED ITS TERMINAL WITH 8 QUAY CRANES, 29 RUBBER TYRE D COUNTRY QUANTRY CRANES, 3 RAIL MOUNTED GANTRY CRANES AND MORE THAN 600 EMPLOYEES. 8. NOW THE MOOT QUESTION IS - WHETHER THE PAYMENT MADE TO NSICT FOR THE MOVEMENT OF CONTAINERS CAN BE COVERED U/S.194J? THE ASSESSEE DEDUCTED TAX AT SOURCE U/S.194C ON T HE PAYMENTS MADE TO NSICT AT THE RATE OF 2.05%. AS AGAINST THAT THE ASSESSING OFFICER HAS HELD THAT SUCH PAYMENTS ARE COVERED U/S.194J, ON WHICH TAX WAS DEDUCTIBLE AT THE RATE OF 5.05%. IN ORDER TO APPRECIATE THE ENTIRE CONTROVERSY IN RIGHT PERSPECTIVE IT WOULD BE APT TO CONSIDER THE PROVISIONS OF SECTION 194J VIS - A - VIS SECTION 194C. 11.ON CIRCUMSPECTION OF EXPLANATION (2) TO SECTION 9(1)(VII) IN JUXTAPOSITION TO SECTION 194J, IT BECOMES APPARENT THAT THE FEES FOR TECHNICAL SERVICES IS CONSIDERATION F OR THE RENDERING OF ANY MANAGERIAL, TECHNICAL OR CONSULTANCY SERVICES INCLUDING THE PROVISION OF SERVICES FOR TECHNICAL OR OTHER PERSONNEL. THUS THE FOREMOST CRITERIA FOR BRINGING ANY PAYMENT UNDER THE PURVIEW OF EXPLANATION (2) TO SECTION 9(1)(VII) IS THA T THE PAYMENT MUST HAVE BEEN MADE FOR RENDERING OF ANY MANAGERIAL, TECHNICAL OR CONSULTANCY SERVICES AND ALSO INCLUDING THE PROVISION OF SERVICES FOR TECHNICAL OR OTHER PERSONNEL. 12.THE ASSESSING OFFICER, IN THE INSTANT CASE, HAS RESTRICTED HIMSELF ONLY TO THE TECHNICAL SERVICES AND IT IS NOBODYS CASE THAT THE ASSESSEE MADE ANY PAYMENT FOR MANAGERIAL OR CONSULTANCY SERVICES. IN THE LIKE MANNER THE AO HAS NOT PRESSED INTO SERVICE THE LATER PART OF THE EXPL. 2, WHICH DEALS WITH PROVISION OF SERVICES OF TECHNICAL OR OTHER PERSONNEL. IT IS RIGHTLY SO BECAUSE OF THE FACT THAT NSICT RAISED INVOICES IN RESPECT OF MOVEMENT OF CARGO AND THERE IS NO REFERENCE TO ANY SPECIFIC PROVISION OF SERVICES BY TECHNICAL OR OTHER PERSONNEL. RULE OF EJUSDEM GENERIS HEL PS IN ASCERTAINING THE MEANING OF A GENERAL WORDS IN THE COMPANY OF SPECIFIC WORDS. AS PER THIS RULE, THE GENERAL WORDS DRAW THEIR COLOUR AND MEANING FROM THE COMPANY THEY KEEP. THE APPLICATION OF THIS RULE HAS BEEN APPROVED IN THE CONTEXT OF THE INCO ME - TAX ACT BY SEVERAL COURTS INCLUDING THE HONBLE SUMMIT COURT IN A RECENT JUDGMENT RENDERED IN CIT VS. MCDOWELL AND CO. LTD. (NO. 1) ITA/ 5520 & 21 /MUM/201 3 , - AY. 05 - 06 - MITSUI OSK LINES 5 (2009) 314 ITR 167 (SC). BY APPLYING THIS RULE, THE EXPRESSION `OTHER PERSONNEL IN THIS PROVISION MUST FALL WITHIN THE GENUS OF `SERVICES OF TECHNICAL PERSONNEL. IT CANNOT BE CONSIDERED AS ANY PERSONNEL UNRELATED TO THE MANAGERIAL, TECHNICAL OR CONSULTANCY SERVICES. EVEN THOUGH NSICT HAD THE SERVICES OF SEVERAL PERSONNEL IN THE PROCESS OF MOVEMENT OF CARGO, THOSE PERS ONNEL, IN THE ABSENCE OF ANY FINDING BY THE AO THAT THEY POSSESSED SOME TECHNICAL EXPERTISE, CANNOT BE CONSIDERED WITHIN THE AMBIT OF THIS PROVISION AS FALLING UNDER `OTHER PERSONNEL. 13.FURTHER NARROWING THE SCOPE OF CONTROVERSY TO THE PAYMENTS MADE B Y THE ASSESSEE FOR AVAILING TECHNICAL SERVICES, AS HAS BEEN HELD BY THE AO, WE NEED TO CONCENTRATE ON THE MEANING OF `TECHNICAL SERVICES. IN OTHER WORDS, THE TECHNICAL SERVICES SHOULD BE PROVIDED BY THE RECIPIENT OF THE AMOUNT SO AS TO BRING THE PAYM ENT WITHIN THE SCOPE OF SECTION 194J. THE WORDS `TECHNICAL SERVICES HAVE NOT BEEN DEFINED IN THE ACT. BUT WHEN WE VIEW EXPLANATION TO SEC. 9(1)(VII), WHICH DEFINES `FEES FOR TECHNICAL SERVICES AS CONSIDERATION FOR RENDERING OF ANY 'MANAGERIAL, TECHN ICAL OR CONSULTANCY SERVICES', IT BECOMES APPARENT THAT THE WORD 'TECHNICAL' IS PRECEDED BY THE WORD 'MANAGERIAL' AND SUCCEEDED BY THE WORD 'CONSULTANCY'. AS BOTH THE `MANAGERIAL AND `CONSULTANCY SERVICES ARE POSSIBLE WITH HUMAN ENDEAVOR, THE WORD `TE CHNICAL SHOULD ALSO BE SEEN IN THE SAME LIGHT. TO BE MORE PRECISE, ANY PAYMENT FOR TECHNICAL SERVICES, IN ORDER TO BE COVERED U/S 194J, SHOULD BE A CONSIDERATION FOR ACQUIRING OR USING TECHNICAL KNOW - HOW SIMPLICITOR PROVIDED OR MADE AVAILABLE BY HUMA N ELEMENT. THERE SHOULD BE DIRECT AND LIVE LINK BETWEEN PAYMENT AND RECEIPT/USE OF TECHNICAL SERVICES/INFORMATION. 14.WHERE NO TECHNICAL SERVICES ARE PROVIDED AS SUCH, BUT THE PAYMENT IS MADE FOR THE USE OF SOME MACHINERY OR EQUIPMENT OR STANDARD FAC ILITY WHICH MAY HAVE BEEN CREATED OR BROUGHT INTO EXISTENCE WITH THE INPUT OF TECHNICAL SERVICES ALONG WITH MAN, MACHINE AND MATERIAL, SUCH PAYMENT WOULD NOT PARTAKE OF THE CHARACTER OF FEES FOR TECHNICAL SERVICES. ...... 15.COMING BACK TO THE FACTS OF T HE INSTANT CASE IT IS NOTICED THAT THE ASSESSEE MADE PAYMENT TO NSICT FOR THE MOVEMENT OF THE CONTAINERS FROM OR UP TO THE VESSEL. IN ORDER TO FACILITATE THE MOVEMENT OF CONTAINERS, NSICT PROVIDED THE SERVICES OF DIFFERENT TYPES OF CRANES SUCH AS QUAY CRA NES, RUBBER TYRE GANTRY CRANES AND RAIL MOUNTED GANTRY CRANES. THESE CRANES ARE USED FOR SPECIFIC PURPOSES ONLY. RUBBER TYRE GANTRY CRANES, RAIL MOUNTED GANTRY CRANES ARE USED FOR LIFTING THE CONTAINER FROM CUSTOMERS TRAILER/RAIL WAGONS AND QUAY CRANES AR E USED FOR MOVING CONTAINERS FROM TRAILERS AT THE QUAY SIDE ON TO THE VESSEL. WHEN THE ASSESSEE MADE PAYMENT TO NSICT IT WAS MEANT FOR USING THE FACILITY OF CRANES PROVIDED BY THEM FOR THE MOVEMENT OF CONTAINERS AND NOT FOR AVAILING ANY TECHNICAL SERVICE S WHICH MAY HAVE GONE INTO THE MAKING OF CRANES. NSICT OPENED ITS DOORS OF SERVICE TO ONE AND ALL. ANYBODY INTERESTED IN MOVEMENT OF CONTAINERS COULD AVAIL THE FACILITY. THE ASSESSEE HAS ALSO MADE PAYMENT ON BILL TO BILL BASIS. IN OTHER WORDS, PAYMENT WA S MADE FOR USER OF A STANDARD FACILITY PROVIDED BY NSICT, SPECIFICALLY FOR THE MOVEMENT OF CONTAINERS FROM OR TO THE VESSEL. 17. FROM THE MANDATE OF SECTION 65(82) OF FINANCE ACT, 1994 IT IS VIVID THAT PORT SERVICES CONSIST OF CARGO HANDLING, DOCK SER VICES AND CONTAINER HANDLING SERVICES. WHEN WE VIEW THE REGISTRATION OF NSICT AS THE ONE UNDER THE CATEGORY OF `PS & MC ALONG WITH THE FACT THAT THE ASSESSEE PAID FOR THE MOVEMENT OF CONTAINERS OF ITS CUSTOMERS, THERE REMAINS NO DOUBT THAT NSICT, IN FACT, MAINTAINED DIFFERENT TYPES OF CRANES FOR THE PURPOSE OF PROVIDING CARGO HANDLING SERVICES. THE REGISTRATION OF ANY PERSON FOR THE PURPOSE OF SERVICE TAX, NO DOUBT PRESUMES THAT SOME SORT OF SERVICES ARE PROVIDED BY HIM WITHIN THE MEANING OF FINANCE ACT, 1994, BUT THAT DOES NOT MEAN THAT SUCH SERVICES ARE ONLY IN THE CATEGORY OF `TECHNICAL SERVICES UNLESS THE PRESCRIPTION OF EXPLANATION (2) TO SECTION 9(1)(VII) IS FULFILLED. A PAYMENT TO BE COVERED U/S.194J SHOULD BE FEES FOR TECHNICAL SERVICES AND SU CH FEES SHOULD BE FOR RENDERING OF ANY TECHNICAL, MANAGERIAL OR CONSULTANCY SERVICES AND NOT ANYTHING ELSE. IN ORDER TO ROPE IN ANY SERVICE PROVIDER WITHIN THE NET OF SECTION 194J, IT IS OF PARAMOUNT IMPORTANCE TO CHECK THE TRUE NATURE OF SERVICE PROVIDE D ON THE TOUCHSTONE OF THE MANDATE OF THIS PROVISION ALONE. IF THE CONDITIONS OF SECTION 194J R.W.S. 9(1)(VII) EXPLANATION (2) ARE NOT FULFILLED, THE LIABILITY UNDER THIS SECTION IS RULED OUT. ITA/ 5520 & 21 /MUM/201 3 , - AY. 05 - 06 - MITSUI OSK LINES 6 20.THIS CASE CAN BE VIEWED FROM ANOTHER ANGLE ALSO. THERE A RE MANY SECTIONS IN CHAPTER XVII OF THE ACT REQUIRING DEDUCTION OF TAX AT SOURCE ON CERTAIN PAYMENTS, WHICH REQUIRE THE USE OF MACHINERY IN DIRECT OR INDIRECT MANNER. E.G. EXPLANATION III TO SECTION 194C DEFINES `WORK AS INCLUDING (B) BROADCASTING AND T ELECASTING INCLUDING PRODUCTION OF PROGRAMMES FOR SUCH BROADCASTING OR TELECASTING. IT IS OBVIOUS THAT THIS ACTIVITY CANNOT BE DONE WITHOUT THE USE OF SOME SOPHISTICATED MACHINERY. SIMILARLY SECTION 194I REQUIRES DEDUCTION OF TAX AT SOURCE FROM RENT. EXPL ANATION TO THIS SECTION DEFINES `RENT TO MEAN PAYMENT FOR THE USE OF INTER ALIA (E) PLANT; (F) EQUIPMENT. THIS IS A DIRECT PAYMENT FOR THE USE OF MACHINERY. NO MACHINERY OR EQUIPMENT CAN BE MANUFACTURED WITHOUT SOME SORT OF TECHNICAL SERVICE. IF WE AC CEPT THE VIEW TAKEN BY THE AO IN THIS CASE THAT THE PAYMENT FOR USE OF ANY MACHINERY, OR EQUIPMENT OR FACILITY, WHICH IN TURN, INVOLVES THE INPUT OF SOME TECHNICAL INFORMATION IN ITS MAKING, IS TO BE CONSIDERED AS FEES FOR TECHNICAL SERVICES, THEN THE PAYM ENTS IN ALL SUCH CASES SHALL BE COVERED U/S 194J AND THE OTHER SECTIONS, AS TAKEN NOTE OF ABOVE, WOULD BE RENDERED AS A REDUNDANT PIECE OF LEGISLATION. IT IS AXIOMATIC THAT IT CANNOT BE THE CASE. 21.IN VIEW OF THE FOREGOING DISCUSSION WE HOLD THAT THERE WAS NO LIABILITY ON THE ASSESSEE TO DEDUCT TAX AT SOURCE FROM THE PAYMENTS MADE TO NSICT WITHIN THE MEANING OF SECTION 194J AND THE LD. CIT(A) WAS JUSTIFIED IN HOLDING SO. 22. NOW LET US EXAMINE AND EVALUATE THE CONTENTION OF THE ASSESSEE THAT THEPAYM ENTS MADE TO NSICT ARE COVERED U/S.194C OF THE ACT. THIS SECTION MANDATES THAT ANY PERSON RESPONSIBLE FOR PAYING ANY SUM TO ANY RESIDENT FOR CARRYING OUT ANY WORK INCLUDING SUPPLY OF LABOUR FOR CARRYING OUT ANY WORK IN PURSUANCE OF CONTRACT BETWEEN THE CO NTRACTOR AND THE PERSONS SPECIFIED, SHALL AT THE TIME OF CREDIT OF SUCH SUM TO THE ACCOUNT OF THE CONTRACTOR OR AT THE TIME OF PAYMENT THEREOF IN CASH OR BY ISSUE OF A CHEQUE OR DRAFT OR BY ANY OTHER MODE, WHICHEVER IS EARLIER, SHALL DEDUCT INCOME TAX AT SOURCE AT THE SPECIFIED RATE. EXPLANATION III BELOW SUB - SECTION 194C(2) DEFINES THE EXPRESSION WORK, WHICH IS RELEVANT FOR OUR PURPOSES. CLAUSE (C) OF THIS EXPLANATION PROVIDES THAT THE EXPRESSION WORK SHALL ALSO INCLUDE : `CARRIAGE OF GOODS AND PASS ENGERS BY ANY MODE OF TRANSPORT OTHER THAN BY RAILWAYS. A CURSORY GLANCE ON CLAUSE (C) OF EXPLANATION III BRINGS OUT THAT CARRIAGE OF GOODS BY ANY MODE OF TRANSPORT OTHER THAN BY RAILWAYS HAS BEEN INCLUDED IN THE DEFINITION OF WORK AS APPLICABLE TO SEC TION 194C. CARRIAGE OF GOODS MEANS THE MOVEMENT OF GOODS FROM SOURCE TO DESTINATION. IN CASE OF EXPORTS,SOURCE IS THE GODOWN OF CUSTOMER AND THE DESTINATION IN INDIA IS VESSEL AND VICE VERSA IN CASE OF IMPORTS. THE GOODS MAY REACH FROM SOURCE TO DESTINAT ION IN ONE OR MORE TRIPS AND THAT TOO WITH THE HELP OF ONE OR MORE MODES OF CARRIERS. IF THE JOURNEY OF GOODS IS BROKEN AND DIFFERENT MODES ARE EMPLOYED IN FACILITATING THE LIFTING OF GOODS FROM SOURCE TO FINAL DESTINATION, SUCH BROKEN UP JOURNEYS ALSO AM OUNT TO CARRIAGE OF GOODS TO THE FINAL DESTINATION. REVERTING TO THE FACTS OF THE INSTANT CASE IT IS DISCERNIBLE THAT THE ASSESSEE WAS MAKING AVAILABLE THE CONTAINERS ON CUSTOMERS TRAILERS / RAIL WAGONS, WHICH WERE LIFTED FROM SUCH TRAILERS / RAIL W AGONS ON THE CRANES BY NSICT AND WERE THEN MOVED FROM YARD TO VESSEL SIDE.THIS MOVEMENT OF CARGO IS PART OF THE JOURNEY OF THE CONTAINER FROM THE PLACE OF SOURCE TO THE PLACE OF DESTINATION, WHICH IS VESSEL. THE ASSESSEE MADE PAYMENT FOR CARRIAGE OF GOO DS FROM THE CUSTOMERS TRAILERS UP TO THE VESSEL IN CASE OF EXPORT AND VICE VERSA IN CASE OF IMPORT OF GOODS. THIS PAYMENT CANNOT BE CHARACTERIZED AS ANYTHING OTHER THAN FOR THE CARRIAGE OF GOODS. WHEN WE VIEW EXPLANATION III (C) BELOW SECTION 194C(2) IT BECOMES APPARENT THAT THE PAYMENT MADE BY THE ASSESSEE TO NSICT IS COVERED WITHIN THIS PROVISION AND THE ASSESSEE RIGHTLY DEDUCTED TAX AT SOURCE U/S.194C OF THE ACT. .....COMING BACK TO THE FACTS OF THE PRESENT CASE WE FIND THAT THE PAYMENTS MADE TO NS ICT ARE STRAIGHTWAY COVERED UNDER EXPLANATION III (C) BELOW SECTION 194C(2). THIS BEING A SPECIFIC PROVISION ENCOMPASSING THE PAYMENT OF CARRIAGE, THE PROVISIONS OF SECTION 194J, WHICH ARE GENERAL IN THE CONTEXT OF NOT SPECIFICALLY DEFINING THE MEANING OF `TECHNICAL SERVICES, CANNOT BE APPLIED. ITA/ 5520 & 21 /MUM/201 3 , - AY. 05 - 06 - MITSUI OSK LINES 7 24.WE, THEREFORE, HOLD THAT THE PAYMENTS MADE BY THE ASSESSEE TO NSCIT ARE COVERED U/S 194C AND THERE IS NO SCOPE FOR APPLYING THE PROVISIONS OF SECTION 194J. THE NATURAL COROLLARY IS THAT THE ASSESSEE RIGHTLY MADE DEDUCTION OF TAX AT SOURCE AT THE APPLICABLE RATE. WE FIND THAT THE FAA HAD FOLLOW E D THE DECISION OF THE TRIBUNAL DELIVERED IN THE CASE OF MERCHANT SHIPPING SERVICES PVT. LTD. (SUPRA) , IN OUR OPINION HIS ORDER DOES NOT SUFFER FROM ANY LEGAL INFIRMIT Y. THEREFORE , FOLLOWING THE DECISIONS RELIED UPON BY AR AND THE FAA WE DECIDE THE EFFECTIVE GROUND OF APPEAL AGAIN S T THE AO. ITA NO.5521/MUM/13 ( 20 05 - 06) AS STATED EARLIER THE FACTS AND CIRCUMSTANCES OF THE CASE AND YEAR ARE IDENTICAL TO THE FACTS FO R EARL IER YEAR EXCEPT FOR THE AMOUNT OF PENALTY AND INTEREST LEVIED BY THE AO.FOLLOWING OUR ORDER FOR THE EARLIER YEAR WE DECIDE THE EFFECTIVE GROUND OF APPEAL AGAINST THE AO. AS A RESULT,APPEAL S FILED BY THE AO FOR BOTH THE AY .S. STAND DISMISSED. . . . ORDER PRONOUNCED IN THE OPEN COURT ON 1 7 TH ,JUNE,2015. 17 , 2015 SD/ - SD/ - ( /JOGINDER SINGH) ( / RAJENDRA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / MUMBAI, /DATE: 1 7 .6.2015 . . . JV . SR.PS. / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT / 2. RESPONDENT / 3. THE CONCERNED CIT(A)/ , 4. THE CONCERNED CIT / 5. DR H BENCH, ITAT, MUMBAI / , , . . . 6. GUARD FILE/ //TRUE COPY// / BY ORDER, / DY./ASST. REGISTRAR , / ITAT, MUMBAI.