ITO (TDS) 2(3), MUMBAI V. MANDKE FOUNDATION, MUMBAI

ITA 5776/MUM/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 1795 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 2 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-12-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 12-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NEIL PHILIP
• Section: 133A; 194C; 201(1)

Judgement Text

B IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER ./ I.T.A. NO. 5776 /MUM/2014 ( / ASSESSMENT YEAR : 2011-12) INCOME TAX OFFICER ( TDS)- 2(3), ROOM NO. 708, 7 TH FLOOR, SMT. K.G. MITTAL AYURVEDIC HOSPITAL BUILDING, CHARNI ROAD, MUMBAI 400 002. / V. MANDKE FOUNDATION, (KOKILABEN DHIRUBHAI AMBANI HOSPITAL), PLOT NO. 1, SURVEY NO. 141, RAO ACHUTRAO PATVARDHAN MARG, FOUR BUNGALOWS, ANDHERI (WEST), MUMBAI -400053. ./ PAN : AAATM4557G ( / APPELLANT ) .. ( / RESPONDENT ) REVENUE BY SHRI NEIL PHILIP ASSESSEE BY : SHRI AMIT KHATIWALA / DATE OF HEARING : 03-11-2016 / DATE OF PRONOUNCEMENT : 06-12-2016 / O R D E R PER RAMIT KOCHAR, ACCOUNTANT MEMBER THIS APPEAL, FILED BY THE REVENUE, BEING ITA NO. 5 776/MUM/2014, IS DIRECTED AGAINST THE APPELLATE ORDER DATED 4 TH JULY, 2014 PASSED BY LEARNED COMMISSIONER OF INCOME TAX (APPEALS)- 14, MUMBAI (H EREINAFTER CALLED THE CIT(A)), FOR THE ASSESSMENT YEAR 2011-12, THE APPE LLATE PROCEEDINGS BEFORE THE LEARNED CIT(A) ARISING FROM THE ORDER DATED 25 TH MARCH, 2013 PASSED BY THE LEARNED ASSESSING OFFICER (HEREINAFTER CALLED THE AO) U/S 201(1)/201(1A) OF THE INCOME-TAX ACT,1961 (HEREINAFTER CALLED THE ACT). ITA 5776/MUM/2014 2 2. THE GROUNDS OF APPEAL RAISED BY THE REVENUE IN T HE MEMO OF APPEAL FILED WITH THE INCOME-TAX APPELLATE TRIBUNAL, MUMBA I (HEREINAFTER CALLED THE TRIBUNAL) READ AS UNDER:- (I) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) ERRED IN DELETING THE DEMAND RAISED U/S.20 1(1)/201(1A) OF THE ACT IN RESPECT OF PAYMENTS MADE TO M/S. PRAVIN ELECTRI CALS PVT. LTD.' HOLDING THAT THE AGREEMENT OF THE ASSESSEE WITH M/S. PRAVIN ELECTRICALS PVT. LTD. IS NOT IN THE NATURE OF PROFESSIONAL OR TE CHNICAL SERVICES WITHOUT APPRECIATING THE FACT THAT WORK ASSIGNED TO THE SAI D PARTY COMPRISES OF SUPPLY AND INSTALLATION OF HT AND LT ELE CTRICAL INSTALLATION EQUIPMENTS, SUPPLY LAYING AND TERMINATION OF HT AND LT ELECTRICAL CABLES, ETC. WHICH REQUIRES THE SERVICES OF TECHNICAL LY QUALIFIED PERSON, THEREBY FALLING WITHIN THE PURVIEW OF SECTION 194J O F THE I. T. ACT. (II) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD.CIT(A) ERRED IN DELETING THE DEMAND RAISED U/S.20 1(1)/201(1A) OF THE ACT IN RESPECT OF PAYMENTS MADE TO M/S. BRANDTHERAPIST ' HOLDING THAT EXPENSES INCURRED IN RESPECT OF ADVERTISEMENT ARE IN T HE NATURE OF 'WORK CONTRACT' AND FALL UNDER THE PROVISIONS OF SECTI ON 194C OF THE ACT WITHOUT APPRECIATING THAT THE SERVICES RENDERED BY M/S. BRANDTHERAPIST' ARE FOR PRODUCTION/DESIGNING OF ART WORK WHICH IS UNDOUBTEDLY PROFESSIONAL AS WELL AS TECHNICAL IN NAT URE AND HENCE, SQUARELY COVERED BY SECTION 194J OF THE I. T. ACT'. (III) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) ERRED IN DELETING THE DEMAND RAISED U/S.20 1(1)/201(1A) OF THE ACT IN RESPECT OF PAYMENTS MADE TO 'M/S. ABSOTHERM FACI LITY MANAGEMENT PVT. LTD'., FAILING TO APPRECIATE THAT SERVI CES RENDERED BY THE SAID COMPANY FOR EFFECTIVE AND SMOOTH WORKING OF T HE HOSPITAL ARE TECHNICAL IN NATURE AND PROFESSIONAL SERVICES COVERE D BY SECTION 194J OF THE I. T. ACT'. (IV) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD.CIT(A) ERRED IN DELETING THE DEMAND RAISED U/S.20 1(1)/201(1A) OF THE ACT IN RESPECT OF PAYMENTS MADE TO M/S. BLUE STAR LTD. HOLDING THAT SERVICES RENDERED BY THE SAID COMPANY FALLS UNDER TH E PROVISIONS OF SECTION 194C OF THE ACT WITHOUT APPRECIATING THAT THE SER VICES RENDERED BY THE SAID COMPANY ARE HIGHLY TECHNICAL AND PROFES SIONAL SERVICES IN THE NATURE OF COMPREHENSIVE ANNUAL MAINTENANCE OF HV AC, COLD ROOMS, UVC EMITTERS AND SUCH SPECIALIZED SERVICES CA NNOT BE ACCOMPLISHED WITHOUT INVOLVEMENT OF PROFESSIONAL CA LIBER AND MERIT FALLING WITHIN THE AMBIT OF SECTION 194J OF THE I. T. ACT. (V) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) ERRED IN DELETING THE DEMAND RAISED U/S.20 1(1)/201(1A) OF THE ITA 5776/MUM/2014 3 ACT IN RESPECT OF PAYMENTS MADE TO M/S. LIFT SCHINDLER INDIA PVT. LTD.' HOLDING THAT THE SERVICES RENDERED BY THE SAID COMPAN Y ARE SIMILAR TO THE SERVICES IN RESPECT OF ELECTRICAL INSTALLATION AND AMC THEREOF , HENCE FALL UNDER THE PROVISIONS OF SECTION 194C OF THE ACT, FAILING TO APPRECIATE THAT THE SAID COMPANY HAS PROVIDED SERVICES FOR COMPRE HENSIVE ANNUAL MAINTENANCE OF THE LIFTS/ELEVATORS ALONG WITH THE LOBBY VISION (CCTV) SERVICES FOR SECURITY AND THE SPECIALIZED ELEVATORS/L IFTS OF THE COMPANY ARE MAINTAINED AND MONITORED BY THE TECHNICALLY SKILL ED PERSONNEL OF THE COMPANY PROVIDING TECHNICAL AND PROFESSIONAL SER VICES, THEREFORE, TDS OUGHT TO HAVE BEEN DEDUCTED U/S 194J OF THE ACT AS A GAINST SECTION 194C OF THE ACT. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS A LEADING HOSPITAL ENGAGED IN THE ACTIVITY OF PROVIDING HEALTHCARE SER VICES AND DOING MEDICAL RESEARCH. THE HOSPITAL IS MANAGED BY MANDKE FOUNDAT ION. IN THE CASE OF MANDKE FOUNDATION, A SURVEY ACTION U/S 133A OF THE ACT WAS CONDUCTED AT THE PREMISES OF THE ASSESSEE AT PLOT NO. 1, SURVEY NO.141, RAOACHUTARAO PATVARDHAN MARG, FOUR BUNGALOW, ANDHERI(WEST),MUMBA I-400058 ON 4 TH OCTOBER, 2010 WITH RESPECT TO THE VERIFICATION OF P ROPER TDS COMPLIANCE BY THE ASSESSEE-DEDUCTOR. DURING THE COURSE OF PROCEED INGS U/S. 201/201(1A) OF THE ACT, THE ASSESSEE WAS ASKED TO FURNISH COPIES O F LEDGER ACCOUNTS AND BILLS/INVOICES OF THE PARTIES MENTIONED IN THE NOTI CE. THE ASSESSEE WAS ALSO ASKED AS TO WHY THE ASSESSEE SHOULD NOT BE TREATED AS THE ASSESSEE-IN-DEFAULT AS THE ASSESSEE HAD DEDUCTED TAX AT SOURCE @ 2% INS TEAD OF 10% ON THE PAYMENTS MADE TO THE SAID PARTIES WHILE THE SERVICE S RENDERED BY THE SAID PARTIES WERE PROFESSIONAL/TECHNICAL SERVICES IN NAT URE. THE ASSESSEE IN REPLY THEREOF MADE SUBMISSIONS ENCLOSING THE LEDGER ACCOU NTS AND SAMPLE BILLS OF THE SPECIFIC PARTIES WHEREIN IT WAS CONTENDED THAT THE ASSESSEE HAS RIGHTLY DEDUCTED TAX AT SOURCE FROM VARIOUS PAYMENTS MADE. THE ASSESSEE SUBMITTED THAT THE PAYMENTS MADE TO THE PARTIES WERE COVERED UNDER THE SEGMENT OF SUPPLY OF MATERIAL/WORKS CONTRACTS U/S 194C OF THE ACT WHEREIN THESE PARTIES SUPPLIED MATERIAL AND/OR HAD EXECUTED WORKS CONTRAC T AND HENCE TDS @ 2% IS APPLICABLE . IT WAS ALSO SUBMITTED THAT IN CASE OF SUPPLY OF MATERIAL, NO TDS WAS REQUIRED TO BE DEDUCTED. THE ASSESSEE RELIED U PON THE CBDT CIRCULARS ITA 5776/MUM/2014 4 NO. 681 DATED 8-3-1994 AND 795 DATED 8.8.1995. IT WAS ALSO SUBMITTED THAT SOME OF THE CONTRACTS WERE ALSO COVERED UNDER THE W ORKS CONTRACT UNDER WHICH WORKS CONTRACT TAX HAVE BEEN PAID TO THE GOVE RNMENT . IT WAS SUBMITTED BY THE ASSESSEE BEFORE THE AO THAT CIRCUL AR REFERRED TO ABOVE HAD SPECIFICALLY MENTIONED 'WORKS CONTRACTS' WOULD FALL UNDER THE CATEGORY WHEREIN TAX IS REQUIRED TO BE DEDUCTED AT SOURCE @ 2% WITHIN AMBIT OF SECTION 194C OF THE ACT. THE A.O. AFTER CONSIDERING THE SUBMISSION OF THE A SSESSEE OBSERVED THAT DURING THE YEAR UNDER CONSIDERATION, PAYMENTS OF RS . 32,72,436/- HAVE BEEN MADE BY THE ASSESSEE TO M/S PRAVIN ELECTRICALS P. LTD. TOWARDS INSTALLATION OF TRANSFORMER AND MAIN LT LINES FOR SUPPLY OF ELECTRI CITY TO THE HOSPITAL AND TAX WAS DEDUCTED AT SOURCE U/S 194C OF THE ACT @ 2%. TH E SAID COMPANY IS ENGAGED IN THE ACTIVITY RANGING FROM HT AND LT ELEC TRICAL INSTALLATION WORK, SUPPLY AND INSTALLATION OF HT AND LT ELECTRICAL EQU IPMENTS, SUPPLY LAYING AND TERMINATION OF HT AND LT CABLES, LIGHTING, EARTHING , LIGHTING PROTECT SUN SYSTEM, TELEPHONE, TV AND FIRE ALARM SYSTEMS, FABRI CATION AND INSTALLATION OF CABLE THREAD ETC. AND THESE SERVICES COULD BE PROVI DED BY A TECHNICALLY QUALIFIED PERSONS ONLY. IT WAS OBSERVED BY THE AO T HAT AS PER WORK ORDER ,THE SCOPE OF WORK ASSIGNED TO M/S. PRAVIN ELECTRICALS P VT. LTD. BY THE ASSESSEE COMPRISES OF SUPPLY, INSTALLATION, TESTING AND COMM ISSIONING OF ELECTRICAL WORKS WHICH INCLUDED UNLOADING, STORING, SHIFTING, INSTALLATION, TESTING AND COMMISSIONING OF 2500 KVA CAPACITY 11/0.415, INDOOR TYPE STEP DOWN COPPER WOUND CASE RESIN DRY TYPE DELTS/STAR TRANSFORMER (P ERCENTAGE IMPEDANCE SHALL BE STRICTLY 7.25%) COMPLETE AS PER SPECIFICAT IONS INCLUDING BIDIRECTIONAL ROLLERS, DIAGRAM & RATING PLATES WITH CONTROL WIRIN G UPTO HT PANEL, LIFTING LUGS, ETC AS PER SPECIFICATIONS AND ACCESSORIES AS REQUIRED. - PROVIDING LIGHTING PROTECTION SYSTEMS. ITA 5776/MUM/2014 5 - UNLOADING, STORING, SHIFTING, HANDLING, INSTALLAT ION, TESTING AND COMMISSIONS OF EXTERNAL/ LANDSCAPE LIGHT FIXTURES W ITH TABULAR 50MM DIA GI STRAIGHT POLE OF OVERALL LENGTH 3.7 METERS ( 3 METERS ABOVE GROUND) WITH BAS PLATE AND FOLLOWING ACCESSORIES. - UNLOADING, STORING, SHIFTING, HANDLING, INSTALLIN G, TESTING AND COMMISSIONING OF 'GARDEN LIGHT'/BOLLARD LIGHT FIXTU RE LOUVERED 'TYPE SIMILAR TO 'PHILIPS FGC LOO' IN THE COLOUR AS APPRO VED BY ARCHITECT WITH 9 W PL - 9 LAMP COMPLETE (FOR LANDSCAPE LIGHTING) ( SUPPLY OF LIGHTING FIXTURE WITH. LAMPS BY CLIENT) OR EQUIVALENT. THE A.O. THUS OBSERVED THAT SERVICES RENDERED BY M/ S PRAVIN ELECTRICALS PVT. LTD. ARE TECHNICAL IN NATURE. FURTHER, THE A.O. OBSERVED THAT A AMOUNT OF EXPENDI TURE RS. 1,16,96,440/- WERE CLAIMED TO HAVE BEEN INCURRED BY THE ASSESSEE WITH RESPECT TO ADVERTISING CHARGES PAID TO M/S BRANDTHERAPIST AND TAX WAS DEDUCTED AT SOURCE U/S. 194C OF THE ACT @ 2%. IN THIS REGARD, O N EXAMINATION OF THE COPY OF BILL/INVOICE NO. 20090012070017 DATED 29.06.2009 AND THE COPY OF THE RELEVANT SERVICE ENTRY OF THE ASSESSEE, IT WAS OBS ERVED BY THE AO THAT THE SERVICE RENDERED BY THE PARTY IS PRODUCTION/DESIGNI NG OF ARTWORK AND THE PARTY M/S BRANDTHERAPIST IS A DIVISION OF FAMOUS PR OFESSIONAL AGENCY, M/S. MUDRA COMMUNICATIONS PVT. LTD., WHICH IS ENGAGED IN THE PROFESSIONAL SERVICES FOR ADVERTISING. THE A.O. OBSERVED THAT TH E PROFESSIONAL/TECHNICAL SERVICES RELATED TO OR IN THE COURSE OF ADVERTISING ARE COVERED BY SECTION 194J OF THE ACT AND NOT BY SECTION 194C OF THE ACT AND I N THE INSTANT CASE, THE SERVICES RENDERED BY THE PARTY ARE FOR PRODUCTION/D ESIGNING OF ARTWORK WHICH IS PROFESSIONAL AS WELL AS TECHNICAL IN NATURE AND IN THE COURSE OF/FOR ADVERTISING. HENCE IT WAS HELD BY THE AO THAT THE P ROVISIONS OF SECTION 194J OF THE ACT ARE SQUARELY ATTRACTED. FURTHER IT WAS OBSERVED BY THE AO THAT THE ASSESSEE HAS BOOKED EXPENSES OF RS. 7,82,101/- FOR SERVICES AVAILED FROM M/S ABSOTH ERM FACILITY MANAGEMENT P. LTD. FOR SERVICES OF ROUTINE, NORMAL MAINTENANCE NATURE RENDERED BY ABOVE ITA 5776/MUM/2014 6 CONCERN WHICH INCLUDES PROVIDING FACILITY MANAGER, SHIFT SUPERVISOR ETC., AND THE TAX WAS DEDUCTED AT SOURCE @ 2% U/S 194C OF THE ACT. THE A.O. EXAMINED THE BILLS/INVOICES SUBMITTED BY THE ASSESSEE AND NO TICED THAT THE CONCERN HAS ISSUED THE BILLS/INVOICES FOR THE OPERATION & MAINT ENANCE SERVICES PROVIDED AT THE HOSPITAL AND SUPPLY OF FACILITY MANAGER, TECHNI CAL ASSISTANCE, SHIFT SUPERVISOR, ELECTRICIAN, ETC. FOR THE EFFECTIVE AND SMOOTH WORKING OF THE HOSPITAL WERE FOUND TO BE TECHNICAL IN NATURE AND P ROFESSIONAL SERVICES COVERED UNDER SECTION 194J OF THE ACT. FURTHER , THE AO OBSERVED THAT THE ASSESSEE HAD BOO KED EXPENSES OF RS. 25,33,985/- FOR THE ANNUAL MAINTENANCE AND INSTALLA TION OF CAMC FOR WALK IN COLD ROOMS AND UVC EMITTERS BY M/S. BLUE STAR LTD. AND TAX WAS DEDUCTED AT SOURCE @ 2% ONLY. THE A.O. ON PERUSAL OF THE BILL/I NVOICE ETC. OBSERVED THAT M/S BLUE STAR LTD. HAS RENDERED HIGHLY TECHNICAL AN D PROFESSIONAL SERVICES IN THE NATURE OF COMPREHENSIVE ANNUAL MAINTENANCE OF H VAC, COLD ROOMS, UVC EMITTERS. THE SERVICES RENDERED WERE IN RESPECT OF HIGH EFFICIENCY' AND SPECIALIZED ELECTRICAL EQUIPMENT FOR COOLING OF THE PREMISES AND SUCH SPECIALIZED SERVICES CANNOT BE ACCOMPLISHED WITHOUT INVOLVEMENT OF PROFESSIONAL CALIBER AND MERIT, HENCE, THE PAYMENTS /EXPENSES HAD TO BE SUBJECTED TO TDS UNDER SECTION 194J OF THE ACT. SIMILARLY WITH RESPECT TO PAYMENT MADE BY THE ASSES SEE TO M/S LIFT SCHINDLER INDIA P LTD., IT WAS OBSERVED BY THE AO THAT THE SA ID CONCERN PROVIDED SERVICES OF RS.29,68,915/- TO THE ASSESSEE DURING T HE YEAR UNDER CONSIDERATION , ON WHICH THE ASSESSEE HAS DEDUCTED TAX AT SOURCE @ 2% U/S 194C OF THE ACT TREATING THE SAID PAYMENTS AS WORK/ CONTRACT. THE NATURE OF SERVICES RENDERED BY THE PARTY WERE MENTIONED AS MA INTENANCE OF LIFT AND AMC FOR LOBBY VISION WITH ONE MONITOR AND CABLE. TH E A.O. OBSERVED THAT M/S LIFT SCHINDLER INDIA P LTD. IS A WELL ESTABLISH ED WORLD RENOWNED COMPANY IN THE FIELD OF ERECTION/INSTALLATION OF SPECIALIZE D ELEVATORS AND LIFTS AND THE ITA 5776/MUM/2014 7 SAID COMPANY HAD PROVIDED SERVICES FOR COMPREHENSIV E ANNUAL MAINTENANCE OF THE LIFTS/ELEVATORS ALONG WITH THE LOBBY VISION (CCTV) SERVICES FOR SECURITY OF THE HOSPITAL. THE SERVICES RENDERED WERE FOR THE PR EVENTIVE MAINTENANCE & UPKEEP OF THE SPECIALIZED ELEVATORS, ENSURING WORKI NG OF THE ALARM SYSTEM, SECURITY MEASURES TO PREVENT SUDDEN BREAKDOWN AND O VERALL INSPECTION OF THE MACHINERY. THE SPECIALIZED ELEVATORS /LIFTS OF THE ASSESSEE WERE MAINTAINED AND MONITORED BY THE TECHNICALLY SKILLED PERSONNEL OF THE SAID COMPANY PROVIDING TECHNICAL AND PROFESSIONAL SERVICES, HENC E, THE AO OBSERVED THAT DEDUCTION OF TAX AT SOURCE UNDER SECTION 194C OF T HE ACT IS CONTRARY TO THE PROVISIONS OF LAW WHICH HAS SPECIFIC SECTION 194J F OR THE DEDUCTION OF TAX AT SOURCE FROM PAYMENTS FOR PROFESSIONAL/TECHNICAL SER VICES. THE A.O. ACCORDINGLY HELD THAT THE PAYMENTS MADE TO THE ABOV E MENTIONED PARTIES CANNOT BE TERMED AS CONTRACT OF WORK AND IT HAS BEE N PROVED THAT THE SAID PAYMENTS WERE IN THE NATURE OF TECHNICAL OR PROFESS IONAL SERVICES AS TECHNICAL ELEMENT IN THE SERVICES IS PREDOMINANT IN THESE SER VICES, HENCE, THE ASSESSEE SHOULD HAVE DEDUCTED TAX AT SOURCE U/S 194J OF THE ACT INSTEAD OF 194C OF THE ACT ON THESE TRANSACTIONS. IN VIEW OF THIS, TH E A.O. TREATED THE ASSESSEE AS ASSESSEE-IN-DEFAULT U/S 201(1) OF THE ACT AND TH E TDS LIABILITY WAS DETERMINED AT RS. 17,08,967/- U/S 201 OF THE ACT WH ILE INTEREST LIABILITY U/S 201(1A) OF THE ACT WAS COMPUTED AT RS. 6,15,227/- , THUS IN AGGREGATE DEMAND AGAINST U/S 201/201(1A) OF THE ACT WERE COMP UTED TO THE TUNE OF RS. 23,24,194/- AGAINST THE ASSESSEE VIDE ORDERS DATED 25.03.2013 PASSED BY THE AO U/S 201/201(1A) OF THE ACT, THE DETAILS OF WHIC H ARE AS UNDER:- S NO. PAYMENT MADE TO LIABILITY U/S 201(1) LIABILITY U/S 201(1A) TOTAL DEMAND 1 M/S PRAVIN ELECTRICALS 2,63,085 94,711 3,57,796 2 M/S BRANDTHERAPIST 9,43,715 3,39,737 12,83,452 3 M/S ABSOTHERM 62,568 22,524 85,092 4 M/S BLUE STAR 2,02,723 72,980 2,75,703 5 M/S LIFT SCHINDLER 2,36,876 85,275 3,22,151 TOTAL 17,08,967 6,15,227 23,24,194 ITA 5776/MUM/2014 8 4. AGGRIEVED BY THE ORDERS DATED 25.03.2013 PASSED BY THE AO U/S 201/201(1A) OF THE ACT , THE ASSESSEE FILED FIRST A PPEAL BEFORE THE LD. CIT(A). 5. THE LD. CIT(A) CONSIDERED THE SUBMISSIONS OF THE ASSESSEE AND ALLOWED THE CLAIM OF THE ASSESSEE BY FOLLOWING HIS PREDECES SORS ORDER IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2010-11 , WHICH IS REPRODUCED HEREUNDER:- PRAVIN ELECTRICALS PVT. LTD. IN VIEW OF ABOVE DISCUSSION THEREFORE AND RESPECTF ULLY FOLLOWING THE ABOVE TWO DECISIONS OF HONBLE TRIBUNAL, I HOLD THAT THE EXPENDITURE ON ACCOUNT OF ELECTRICAL INSTALLATIONS AND ANNUAL MAINTENANCE CONTRACTS (AMC) THEREOF IS NOT IN THE N ATURE OF PROFESSIONAL OR TECHNICAL SERVICES AS CONSTRUED UND ER THE PROVISIONS OF SECTION 194J OF THE ACT AND HENCE PRO VISIONS OF SECTION 194J OF THE ACT ARE NOT APPLICABLE. THE APP ELLANT HAS CORRECTLY DEDUCTED TDS UNDER SECTION 194C OF THE AC T IN RESPECT OF THESE PAYMENTS. THEREFORE, THERE WAS NO ADDITIONAL LIABILITY OF TDS IN REGARD TO THESE PAYMENTS. THEREFORE, THERE WILL ALSO NOT BE ANY LIABILITY OF INTEREST U/S 201 (IA) OF THE ACT. BRANDTHERAPIST I HAVE CONSIDERED THE ABOVE SUBMISSIONS OF THE APP ELLANT AND AGREE WITH THE SAME. THE ADVERTISEMENT CONTRACTS DI RECTLY FALL UNDER THE PROVISIONS OF SECTION 194C FOR THE PURPOS ES OF TAX DEDUCTION AT SOURCE. IT HAS TO BE NOTED THAT IN THE PROCESS OF RENDERING THESE SERVICES, NEITHER ANY TECHNICAL INF ORMATION IS PROVIDED BY THE VENDOR; NOR ANY TECHNICAL KNOWLEDGE , DESIGN ETC IS IMPARTED WHILE PERFORMING SUCH ACTIVITIES, HENCE, C IRCULAR NO. 681 DATED 08.03.1994 AND CIRCULAR NO. 715 DATED 08.08.1 995 ISSUED BY THE CBDT, BOTH, WILL APPLY TO THE PAYMENTS UNDER CONSIDERATION. IN VIEW OF ABOVE DISCUSSION THEREFORE, I HOLD THAT THE EXPENSES IN RESPECT OF ADVERTISEMENT INCURRED BY THE APPELLANT ARE IN THE NATURE OF PAYMENTS TOWARDS A 'WORK CONTRACT' AND TH E TAX DEDUCTION AT SOURCE IN RESPECT THEREOF HAS BEEN COR RECTLY MADE UNDER SECTION 194C OF THE ACT. ABSORTHERM FACILITY MANAGEMENT PVT. LTD. ITA 5776/MUM/2014 9 I HAVE CONSIDERED THE ABOVE SUBMISSIONS OF THE APP ELLANT AND AGREE WITH THE SAME. I AGREE THAT THE SERVICES REND ERED BY M/S ABSORTHERM FOR OPERATION AND MAINTENANCE, INCLUDING THE PROVIS ION OF FACILITY MANAGER, SHIFT SUPERVISOR AND TECHNICAL ASSISTANT WHICH INCLUDE SUPPLY OF PERSONNEL OF DIFFERENT LEVELS ARE IN THE NATURE OF A 'WORKS CONTRACT'. HENCE, THE SAME SHALL FALL UNDER THE PROVISIONS OF SECTION 194C FOR THE PURPOSES OF TAX DEDUCTION AT S OURCE. IT HAS TO BE NOTED THAT IN THE PROCESS OF RENDERING THESE SER VICES, NEITHER ANY TECHNICAL INFORMATION IS PROVIDED BY THE VENDOR ; NOR ANY TECHNICAL KNOWLEDGE, DESIGN ETC IS IMPORTED WHILE P ERFORMING SUCH ACTIVITIES. THUS, SAME PROVISIONS TAX DEDUCTION WIL L APPLY TO THE PAYMENTS UNDER CONSIDERATION, AS ARE APPLICABLE TO THE SERVICES IN RESPECT OF ELECTRICAL INSTALLATIONS AND AMC THEREOF (AS DISCUSSED ABOVE IN GROUND NO. 1 ). HENCE, CIRCULAR NO. 681 DO TED 08. 03.1994 AND CIRCULAR NO. 715 DATED 08.08.1995 ISSUED BY THE CBDT, BOTH, WILL APPLY TO THE PAYMENTS UNDER CONSIDERATION. IN VIEW OF ABOVE DISCUSSION THEREFORE, I HOLD THAT THE EXPENSES IN RESPECT OF OPERATION AND MAINTENANCE,INCLUDING THE PROVISION OF FACILITY MANAGER, SHIFT SUPERVISOR AND TECHNICAL AS SISTANCE INCURRED BY THE APPELLANT ARE IN THE NATURE OF PAYMENTS TOWA RDS A 'WORK CONTRACT' AND THE TAX DEDUCTION AT SOURCE IN RESPEC T THEREOF HAS BEEN CORRECTLY MADE UNDER SECTION 194C OF THE ACT. BLUE STAR LTD. I HAVE CONSIDERED THE ABOVE SUBMISSIONS OF THE APP ELLANT AND AGREE WITH THE SAME. THE NATURE OF SERVICES, RENDE RED BY M/S BLUE STAR LTD IN RESPECT OF HVAC WORK ARE SIMILAR TO SERVICES IN RESPECT OF ELECTRICAL INSTALLATIONS AND AMC THEREOF (AS DISCUSSED ABOVE IN GROUND NO. 1). HENCE, THE SAME SHALL FALL UNDER THE PROVISIONS OF SECTION 194C FOR THE PURPOSES OF TAX DEDUCTION AT SOURCE. IT HAS TO BE NOTED THAT IN THE PROCESS OF R ENDERING THESE SERVICES, NEITHER ANY TECHNICAL INFORMATION IS PROV IDED BY THE VENDOR; NOR ANY TECHNICAL KNOWLEDGE, DESIGN ETC IS IMPARTED WHILE PERFORMING SUCH ACTIVITIES. HENCE, CIRCULAR NO. 681 DOTED 08. 03.1994 AND CIRCULAR NO. 715 DATED 08.08.1995 ISSUE D BY THE CBDT, BOTH, WILL APPLY TO THE PAYMENTS UNDER CONSID ERATION. IN VIEW OF ABOVE DISCUSSION THEREFORE, I HOLD THAT THE EXPENSES IN RESPECT OF SUPPLY, INSTALLATION, MAINTENANCE, TESTI NG AND COMMISSIONING OF HVAC WORK INCURRED BY THE APPELLAN T ARE IN THE ITA 5776/MUM/2014 10 NATURE OF PAYMENTS TOWARDS A 'WORK CONTRACT' AND TH E TAX DEDUCTION AT SOURCE IN RESPECT THEREOF HAS BEEN COR RECTLY MADE UNDER SECTION 194C OF THE ACT. LIFT SCHINDLER I HAVE CONSIDERED THE ABOVE SUBMISSIONS OF THE APPE LLANT AND AGREE WITH THE SAME. THE NATURE OF SERVICES RENDERE D BY LIFT SCHINDLER INDIA PVT. LTD. ARE SIMILAR TO THE SERVIC ES IN RESPECT OF ELECTRICAL INSTALLATIONS AND AMC THEREOF (AS DISCUS SED ABOVE IN GROUND NO 1). HENCE, THE SAME SHALL FALL UNDER THE PROVISIONS OF SECTION 194C FOR THE PURPOSES OF TAX DEDUCTION AT S OURCE. IT HAS TO BE NOTED THAT IN THE PROCESS OF RENDERING THESE SER VICES, NEITHER ANY TECHNICAL INFORMATION IS PROVIDED BY THE VENDOR ; NOR ANY TECHNICAL KNOWLEDGE, DESIGN ETC IS IMPARTED WHILE P ERFORMING SUCH ACTIVITIES. HENCE CIRCULAR NO. 681 DOTED 08. 03.199 4 AND CIRCULAR NO. 715 DATED 08.08.1995 ISSUED BY THE CBDT, BOTH, WILL APPLY TO THE PAYMENTS UNDER CONSIDERATION. IN VIEW OF ABOVE DISCUSSION THEREFORE, I HOLD THAT THE EXPENSES IN RESPECT OF INSTALLATION, MAINTENANCE, TESTING AND COMMISSIONING OF HVAC WORK INCURRED BY THE APPELLANT ARE IN THE NATU RE OF PAYMENTS TOWARDS A 'WORK CONTRACT AND THE TAX DEDUC TION AT SOURCE IN RESPECT THEREOF HAS BEEN CORRECTLY MADE U NDER SECTION 194C OF THE ACT. THUS, THE APPEAL OF THE ASSESSEE WAS ALLOWED BY THE LD. CIT(A) VIDE HIS APPELLATE ORDERS DATED 4 TH JULY, 2014. 6.AGGRIEVED BY THE APPELLATE ORDERS DATED 04-07-201 4 PASSED BY THE LD. CIT(A), THE REVENUE IS IN APPEAL BEFORE THE TRIBUNA L. 7. THE LD. D.R. RELIED ON THE ORDER OF THE A.O. WHI LE THE LD. COUNSEL FOR THE ASSESSEE RELIED ON THE ORDER OF THE LD. CIT(A). ITA 5776/MUM/2014 11 8. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND ALS O PERUSED THE MATERIAL AVAILABLE ON RECORD. WE HAVE OBSERVED THAT THE ASSE SSEE HAS MADE THE FOLLOWING PAYMENTS TO THE PARTIES:- SR NO. PAYMENT MADE TO AMOUNT PAID 1 PRAVIN ELECTRICALS PVT. LTD 32,72,436 2 BRANDTHERAPIST 1,16,96,440 3 ABSORTHERM FACILITY MGT. P. LTD. 7,82,101 4 BLUE STAR LTD. 25,33,985 5 LIFT SCHINDLER INDIA PRIVATE LIMITED 29,68,915 WE HAVE OBSERVED THAT SIMILAR PAYMENTS WERE MADE FO R THE PRECEDING YEAR WHEREBY THE LD. CIT(A) ALLOWED THE APPEAL OF THE AS SESSEE BY HOLDING AS UNDER:- PRAVIN ELECTRICALS PVT. LTD. IN VIEW OF ABOVE DISCUSSION THEREFORE AND RESPECTF ULLY FOLLOWING THE ABOVE TWO DECISIONS OF HONBLE TRIBUNAL, I HOLD THAT THE EXPENDITURE ON ACCOUNT OF ELECTRICAL INSTALLATIONS AND ANNUAL MAINTENANCE CONTRACTS (AMC) THEREOF IS NOT IN THE N ATURE OF PROFESSIONAL OR TECHNICAL SERVICES AS CONSTRUED UND ER THE PROVISIONS OF SECTION 194J OF THE ACT AND HENCE PRO VISIONS OF SECTION 194J OF THE ACT ARE NOT APPLICABLE. THE APP ELLANT HAS CORRECTLY DEDUCTED TDS UNDER SECTION 194C OF THE AC T IN RESPECT OF THESE PAYMENTS. THEREFORE, THERE WAS NO ADDITIONAL LIABILITY OF TDS IN REGARD TO THESE PAYMENTS. THEREFORE, THERE WILL ALSO NOT BE ANY LIABILITY OF INTEREST U/S 201 (IA) OF THE ACT. BRANDTHERAPIST I HAVE CONSIDERED THE ABOVE SUBMISSIONS OF THE APP ELLANT AND AGREE WITH THE SAME. THE ADVERTISEMENT CONTRACTS DI RECTLY FALL UNDER THE PROVISIONS OF SECTION 194C FOR THE PURPOS ES OF TAX DEDUCTION AT SOURCE. IT HAS TO BE NOTED THAT IN THE PROCESS OF RENDERING THESE SERVICES, NEITHER ANY TECHNICAL INF ORMATION IS PROVIDED BY THE VENDOR; NOR ANY TECHNICAL KNOWLEDGE , DESIGN ETC IS IMPARTED WHILE PERFORMING SUCH ACTIVITIES, HENCE, C IRCULAR NO. 681 ITA 5776/MUM/2014 12 DATED 08.03.1994 AND CIRCULAR NO. 715 DATED 08.08.1 995 ISSUED BY THE CBDT, BOTH, WILL APPLY TO THE PAYMENTS UNDER CONSIDERATION. IN VIEW OF ABOVE DISCUSSION THEREFORE, I HOLD THAT THE EXPENSES IN RESPECT OF ADVERTISEMENT INCURRED BY THE APPELLANT ARE IN THE NATURE OF PAYMENTS TOWARDS A 'WORK CONTRACT' AND TH E TAX DEDUCTION AT SOURCE IN RESPECT THEREOF HAS BEEN COR RECTLY MADE UNDER SECTION 194C OF THE ACT. ABSORTHERM FACILITY MANAGEMENT PVT. LTD. I HAVE CONSIDERED THE ABOVE SUBMISSIONS OF THE APP ELLANT AND AGREE WITH THE SAME. I AGREE THAT THE SERVICES REND ERED BY M/S ABSORTHERM FOR OPERATION AND MAINTENANCE, INCLUDING THE PROVIS ION OF FACILITY MANAGER, SHIFT SUPERVISOR AND TECHNICAL ASSISTANT WHICH INCLUDE SUPPLY OF PERSONNEL OF DIFFERENT LEVELS ARE IN THE NATURE OF A 'WORKS CONTRACT'. HENCE, THE SAME SHALL FALL UNDER THE PROVISIONS OF SECTION 194C FOR THE PURPOSES OF TAX DEDUCTION AT S OURCE. IT HAS TO BE NOTED THAT IN THE PROCESS OF RENDERING THESE SER VICES, NEITHER ANY TECHNICAL INFORMATION IS PROVIDED BY THE VENDOR ; NOR ANY TECHNICAL KNOWLEDGE, DESIGN ETC IS IMPORTED WHILE P ERFORMING SUCH ACTIVITIES. THUS, SAME PROVISIONS TAX DEDUCTION WIL L APPLY TO THE PAYMENTS UNDER CONSIDERATION, AS ARE APPLICABLE TO THE SERVICES IN RESPECT OF ELECTRICAL INSTALLATIONS AND AMC THEREOF (AS DISCUSSED ABOVE IN GROUND NO. 1 ). HENCE, CIRCULAR NO. 681 DO TED 08. 03.1994 AND CIRCULAR NO. 715 DATED 08.08.1995 ISSUED BY THE CBDT, BOTH, WILL APPLY TO THE PAYMENTS UNDER CONSIDERATION. IN VIEW OF ABOVE DISCUSSION THEREFORE, I HOLD THAT THE EXPENSES IN RESPECT OF OPERATION AND MAINTENANCE,INCLUDING THE PROVISION OF FACILITY MANAGER, SHIFT SUPERVISOR AND TECHNICAL AS SISTANCE INCURRED BY THE APPELLANT ARE IN THE NATURE OF PAYMENTS TOWA RDS A 'WORK CONTRACT' AND THE TAX DEDUCTION AT SOURCE IN RESPEC T THEREOF HAS BEEN CORRECTLY MADE UNDER SECTION 194C OF THE ACT. BLUE STAR LTD. I HAVE CONSIDERED THE ABOVE SUBMISSIONS OF THE APP ELLANT AND AGREE WITH THE SAME. THE NATURE OF SERVICES, RENDE RED BY M/S BLUE STAR LTD IN RESPECT OF HVAC WORK ARE SIMILAR TO SERVICES IN RESPECT OF ELECTRICAL INSTALLATIONS AND AMC THEREOF (AS DISCUSSED ABOVE IN GROUND NO. 1). HENCE, THE SAME SHALL FALL UNDER THE ITA 5776/MUM/2014 13 PROVISIONS OF SECTION 194C FOR THE PURPOSES OF TAX DEDUCTION AT SOURCE. IT HAS TO BE NOTED THAT IN THE PROCESS OF R ENDERING THESE SERVICES, NEITHER ANY TECHNICAL INFORMATION IS PROV IDED BY THE VENDOR; NOR ANY TECHNICAL KNOWLEDGE, DESIGN ETC IS IMPARTED WHILE PERFORMING SUCH ACTIVITIES. HENCE, CIRCULAR NO. 681 DOTED 08. 03.1994 AND CIRCULAR NO. 715 DATED 08.08.1995 ISSUE D BY THE CBDT, BOTH, WILL APPLY TO THE PAYMENTS UNDER CONSID ERATION. IN VIEW OF ABOVE DISCUSSION THEREFORE, I HOLD THAT THE EXPENSES IN RESPECT OF SUPPLY, INSTALLATION, MAINTENANCE, TESTI NG AND COMMISSIONING OF HVAC WORK INCURRED BY THE APPELLAN T ARE IN THE NATURE OF PAYMENTS TOWARDS A 'WORK CONTRACT' AND TH E TAX DEDUCTION AT SOURCE IN RESPECT THEREOF HAS BEEN COR RECTLY MADE UNDER SECTION 194C OF THE ACT. LIFT SCHINDLER I HAVE CONSIDERED THE ABOVE SUBMISSIONS OF THE APPE LLANT AND AGREE WITH THE SAME. THE NATURE OF SERVICES RENDERE D BY LIFT SCHINDLER INDIA PVT. LTD. ARE SIMILAR TO THE SERVIC ES IN RESPECT OF ELECTRICAL INSTALLATIONS AND AMC THEREOF (AS DISCUS SED ABOVE IN GROUND NO 1). HENCE, THE SAME SHALL FALL UNDER THE PROVISIONS OF SECTION 194C FOR THE PURPOSES OF TAX DEDUCTION AT S OURCE. IT HAS TO BE NOTED THAT IN THE PROCESS OF RENDERING THESE SER VICES, NEITHER ANY TECHNICAL INFORMATION IS PROVIDED BY THE VENDOR ; NOR ANY TECHNICAL KNOWLEDGE, DESIGN ETC IS IMPARTED WHILE P ERFORMING SUCH ACTIVITIES. HENCE CIRCULAR NO. 681 DOTED 08. 03.199 4 AND CIRCULAR NO. 715 DATED 08.08.1995 ISSUED BY THE CBDT, BOTH, WILL APPLY TO THE PAYMENTS UNDER CONSIDERATION. IN VIEW OF ABOVE DISCUSSION THEREFORE, I HOLD THAT THE EXPENSES IN RESPECT OF INSTALLATION, MAINTENANCE, TESTING AND COMMISSIONING OF HVAC WORK INCURRED BY THE APPELLANT ARE IN THE NATU RE OF PAYMENTS TOWARDS A 'WORK CONTRACT AND THE TAX DEDUC TION AT SOURCE IN RESPECT THEREOF HAS BEEN CORRECTLY MADE U NDER SECTION 194C OF THE ACT. WE HAVE OBSERVED THAT THE ABOVE PAYMENTS MADE BY TH E ASSESSEE ARE NOT TOWARDS PROFESSIONAL/TECHNICAL SERVICES AVAILED BY THE ASSESSEE TO BE COVERED U/S 194J OF THE ACT AS PER MANDATE OF SECTION 194J OF THE ACT, BUT WERE ITA 5776/MUM/2014 14 MERELY CONTRACTUAL PAYMENTS FOR THE WORK DONE FOR T HE ASSESSEE INCLUDING SUPPLY OF LABOUR FOR CARRYING OUT WORK BY THESE VEN DORS AS DETAILED ABOVE AND HENCE THE ASSESSEE HAS RIGHTLY DEDUCTED TAX AT SOUR CE U/S 194C OF THE ACT. REFERENCE IS DRAWN TO DECISION OF THE HONBLE SUPRE ME COURT IN THE CASE OF ASSOCIATED CEMENT CO. LTD. V. CIT IN (1993) 201 ITR 435(SC), WHEREIN HONBLE APEX COURT HAS HELD THAT THERE IS NOTHING I N THE SECTION WHICH COULD MAKE THE COURT HOLD THAT THE CONTRACT TO CARRY OUT A WORK OR THE CONTRACT TO SUPPLY LABOUR TO CARRY OUT A WORK SHOULD BE CONFINE D TO 'WORKS CONTRACT'. THE HONBLE APEX COURT HELD THAT 'ANY WORK' MEANS ANY W ORK AND NOT A 'WORKS CONTRACT', WHICH HAS A SPECIAL CONNOTATION IN THE T AX LAW. INDEED, IN THE SUB- SECTION, THE 'WORK' REFERRED TO THEREIN EXPRESSLY I NCLUDES SUPPLY OF LABOUR TO CARRY OUT A WORK. IT IS A CLEAR INDICATION OF LEGIS LATURE THAT THE 'WORK' IN SUB- SECTION IS NOT INTENDED TO BE CONFINED TO OR RESTRI CTED TO 'WORKS CONTRACT'. WORK' ENVISAGED IN THE SUB-SECTION, THEREFORE, HAS A WIDE IMPORT AND COVERS 'ANY WORK' WHICH ONE OR THE OTHER OF THE ORGANIZATI ONS SPECIFIED IN THE SUB- SECTION CAN GET CARRIED OUT THROUGH A CONTRACTOR UN DER A CONTRACT AND FURTHER IT INCLUDES OBTAINING BY ANY OF SUCH ORGANIZATIONS SUPPLY OF LABOUR UNDER A CONTRACT WITH A CONTRACTOR FOR CARRYING OUT ITS WOR K WHICH, WOULD HAVE FALLEN OUTSIDE THE 'WORK', BUT FOR ITS SPECIFIC INCLUSION IN THE SUB-SECTION. IN VIEW OF OUR ABOVE DISCUSSION AND REASONING, WE D O NOT FIND ANY INFIRMITY IN THE WELL REASONED ORDER PASSED BY THE LD. CIT(A) WH ICH WE ARE NOT INCLINED TO INTERFERE , HENCE, WE HEREBY HOLD THAT THE PAYMENTS MADE BY THE ASSESSEE TO THE ABOVE VENDORS FOR THE ASSESSES WORK EXECUTED B Y THESE VENDORS WERE TOWARDS CONTRACTUAL PAYMENT FOR WORK DONE BY THESE VENDORS AS SPECIFIED IN THE PRECEDING PARAS , AND NOT TOWARDS FEE FOR ACQU IRING TECHNICAL SERVICES OR PROFESSIONAL SERVICES AS PER MANDATE OF SECTION 1 94J OF THE ACT, AND THE ASSESSEE HAS RIGHTLY DEDUCTED TAX AT SOURCE IN RESP ECT OF ABOVE PAYMENTS UNDER SECTION 194C OF THE ACT .WE ORDER ACCORDINGLY . ITA 5776/MUM/2014 15 9. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I N ITA NO. 5776/MUM/2014 FOR THE ASSESSMENT YEAR 2011-12 IS DI SMISSED. WE ORDER ACCORDINGLY. ORDER PRONOUNCED IN THE OPEN COURT ON 6 TH DECEMBER, 2016. # $% &' 06-12-2016 ( ) SD/- SD/- (JOGINDER SINGH) (RAMIT KOCHAR) JUDICIAL MEMBER ACCOUNTANT MEMBER $ MUMBAI ; & DATED 06-12-2016 [ .9../ R.K. R.K. R.K. R.K. , EX. SR. PS \ !'#$%&%# / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. : ( ) / THE CIT(A)- CONCERNED, MUMBAI 4. : / CIT- CONCERNED, MUMBAI 5. =>( 99?@ , ?@ , $ / DR, ITAT, MUMBAI B BENCH 6. (BC D / GUARD FILE. / BY ORDER, = 9 //TRUE COPY// / ( DY./ASSTT. REGISTRAR) , $ / ITAT, MUMBAI