RAJASTHAN KNOLEDGE CORPORATION LIMITED, Jaipur V. ITO, Jaipur

ITA 896/JPR/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5511 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 1 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-01-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 26-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P BHATEJA CIT DHK
• Assessee Lawyers: P D BAID
• Keywords: Opportunity of being heard; Principle of natural justice
• Section: 201(1)

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH VH-VKJ-EHUK] YS[KK LNL; ,OA JH YFYR DQEKJ] U;KF; D LNL; DS LE{K BEFORE: SHRI T.R.MEENA, AM & SHRI LALIET KUMAR, JM VK;DJ VIHY LA -@ ITA NO. 896/JP/2014 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2012-13 RAJASTHAN KNOWLEDGE CORPORATION LIMITED, 7-A, JHALANA INSTITUTIONAL AREA, JAIPUR. CUKE VS. INCOME TAX OFFICER, TDS-2, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO. JPRR05102G VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI R.S. SINGHVI (CA) & SHRI P.D. BAID (CA) JKTLO DH VKSJ LS@ REVENUE BY : SHRI O.P. BHATEJA (ADDL.CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 27/11/2015. MN?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 27/01/2016. VKNS'K@ ORDER PER T.R. MEENA, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 22/10/2014 OF THE LEARNED C.I.T.(A)-III, JAIPUR FOR A.Y. 2012-13. THE EFFECTIVE GROUNDS OF APPEAL ARE AS UNDER:- 1(I) THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE , THE ORDER PASSED BY THE LEARNED INCOME TAX OFFICER, TDS-2, JAIP UR 2 ITA NO. 896/JP/2014 RAJASTHAN KNOWLEDGE CORP. LTD. VS. ITO TDS (HEREINAFTER REFERRED AS 'ASSESSING OFFICER') AND COMMISSIONER OF INCOME TAX (APPEALS)-III, JAIPUR IS BAD IN LAW AS WELL AS IN FACTS, FOR THE GROUNDS CONTAINED HEREINAFTER AND NEEDS TO BE QUASHED. II) THAT THE LEARNED ASSESSING OFFICER HAS NOT FOLLO WED PRINCIPAL OF NATURAL JUSTICE AND HAS PASSED A MECHANICAL ORDE R AND CIT (APPEALS)-III IN CONFIRMING THE SAME, WITHOUT CONSIDERING THE SUBMISSIONS/ EVIDENCES PRODUCED BY THE APPELLANT. III) THAT LEARNED ASSESSING OFFICER AND COMMISSIONE R OF INCOME TAX (APPEALS)-III, JAIPUR HAS NOT CONSIDERED THE FIN DINGS AND DETAILED ORDER GIVEN BY LEARNED CIT (APPEAL, ALWA R) IN APPEAL NO. 1083/JPR/11-12, 1081/JPR/11-12 AND 1082/JPR/11-12 RELATING TO ASSESSMENT YEAR 2009- 10 , 2010-11 AND 2011-12 RESPECTIVELY, PASSED ON CONSIDE RING THE TRANSACTIONS BETWEEN APPELLANT AND ITGK AS NOT COVERED BY THE PROVISIONS OF SECTION 194(J) OF INCO ME-TAX ACT, 1961 AND FAVORABLY DECIDING ALL THE ISSUES. 2. THAT THE LEARNED ASSESSING OFFICER AND COMMISSION ER OF INCOME TAX (APPEALS)-III, JAIPUR HAS ERRED IN LAW AS WELL IN THE FACTS OF THE CASE THAT PAYMENTS BY APPELLANT AR E IN THE NATURE OF PAYMENT FOR TECHNICAL SERVICES AND APPELL ANT IS UNDER OBLIGATION TO DEDUCT TDS UNDER SECTION 194J OF THE INCOME TAX ACT, 1961, WHEREAS IT HAS BEEN SUBMITTED THAT IT IS ONLY ARRANGEMENT FOR SHARING OF FEES/REVENUE REC EIVED FROM THE LEARNERS AND THEREFORE, THE FINDINGS OF LE ARNED ASSESSING OFFICER NEED TO BE QUASHED AND LIABILITY TO BE DELETED. 3(I) THAT THE LEARNED ASSESSING OFFICER AND COMMISSI ONER OF INCOME TAX (APPEALS)-III, JAIPUR HAS FURTHER ERRED I N LAW AS WELL AS IN FACTS IN HOLDING THAT THE APPELLANT IS LI ABLE TO 3 ITA NO. 896/JP/2014 RAJASTHAN KNOWLEDGE CORP. LTD. VS. ITO TDS DEDUCT TAX U/ S 194J OF THE INCOME- TAX ACT, 1961 F ROM THE REMITTANCES MADE BY THE APPELLANT TO ITGK FOR ITS S HARE IN RS-CIT COURSE FEES AND ALSO FOR OTHER COURSES, THE APPELLANT IS NOT LIABLE FOR DEDUCTION OF TAX AT SOU RCE, REMITTANCE BEING IN THE NATURE OF SHARING OF FEES H ENCE THE ORDER MAY BE QUASHED AND LIABILITY BE DELETED. (II) THAT DETAILED WRITTEN/ORAL SUBMISSION MADE DURIN G THE COURSE OF HEARING INCLUDING CITATION OF VARIOUS RUL INGS WERE NOT CONSIDERED PROPERLY AND HENCE THE ORDER PASSED BY ASSESSING OFFICE NEEDS TO BE QUASHED AND RELIEF GRA NTED. 4. THAT THE LEARNED ASSESSING OFFICER AND COMMISSION ER OF INCOME TAX (APPEALS)-III, JAIPUR HAS ERRED AND HAS WR ONGLY HELD THAT APPELLANT HAS NOT DEDUCTED AT SOURCES ON AMOUNT PAID AGGREGATING TO RS.1,60,17,471/- BEING 'CENTERS SHARE' IN COURSE FEES. IN FACT THIS REMITTANCE WAS ALSO FO R FEE FOR 'OTHER COURSES' REMITTED TO ITGK ONLY AND IS OF THE SAME NATURE AS OTHER REMITTANCE AND HENCE FINDING NEEDS TO BE DELETED. 5(I) WITHOUT PREJUDICE TO ABOVE, THAT THE LEARNED ASSESSING OFFICER AND COMMISSIONER OF INCOME TAX (APPEALS)-III , JAIPUR HAS NOT CONSIDERED THE VARIOUS JUDGMENTS OF THE HON'BLE HIGH COURTS AND ALSO THE RATIO OF HON'BLE S UPREME COURT IN THE CASE OF HINDUSTAN COCO-COLA BEVERAGES PRIVATE LIMITED V CIT REPORTED AT (2007) 163 TAXMAN- 355 CITE D BY THE APPELLANT AND ACCORDINGLY THE APPELLANT IS NOT UNDER ANY OBLIGATION TO DEDUCT TDS AND HENCE ORDER UNDER APPEA L NEEDS TO QUASHED AND NECESSARY RELIEF GRANTED. HOWEV ER, THE ASSESSING OFFICER HAS WRONGLY MENTIONED THAT FUL L PARTICULARS/ DETAILS IN SUPPORT OF ASSESSEE'S CLAIM IN THIS CONNECTION WERE NOT PROVIDED BY APPELLANT, WHEREAS NO SUCH DETAILS/PAPERS IN THIS CONNECTION WERE CALLED F OR. 4 ITA NO. 896/JP/2014 RAJASTHAN KNOWLEDGE CORP. LTD. VS. ITO TDS (II) THE CIT (APPEALS)-III HAS ALSO ERRED IN GIVING CERTAIN FINDINGS, WHICH ARE NOT RELEVANT TO APPELLANT'S CAS E AND WITHOUT GIVING AN OPPORTUNITY TO APPELLANT TO DISTIN GUISH ITS STAND. (III) FURTHER THE LEARNED CIT (APPEALS)-III HAS ERRE D IN NOT GIVING ANY FINDING IN RESPECT OF GROUND (GROUND NO. 5) AS CONTAINED IN GROUNDS OF APPEAL FILED BEFORE CIT (APP EALS)- III AND WHICH HAS NOW BEEN REFERRED IN GROUND 5 (I) ABOVE AND HENCE THE ORDER ALSO NEEDS TO BE DELETED ON THI S GROUND. 6. THAT THE APPELLANT RESERVES THE RIGHT TO ADD, AL TER, OR AMEND ALL OR ANY PART OF THE GROUNDS OF APPEAL BEFO RE OR AT THE TIME OF HEARING OF THE APPEAL. 2. ALL THE GROUNDS ARE REVOLVING AROUND THE PAYMENT S MADE BY THE APPELLANT TO ITGK FOR ITS SHARE IN RS-CIT COURSE FEE S AND LIABLE TO DEDUCT TDS U/S 194J OF THE INCOME TAX ACT, 1961 (IN S HORT THE ACT). THE ITO (TDS)-2, JAIPUR HAS OBSERVED THAT THE ASSESSE E HAD MADE FOLLOWING PAYMENTS UNDER VARIOUS HEADS AS UNDER:- HEAD PARTICULARS F.Y. 2011-12 SHARE IN RS-CIT COURSE FEES ITGKS SHARE IN RS-CIT COURSE FEES 15,30,61,420/- VARDHAMAN MAHAVEER OPEN UNIVERSITY SHARE IN RS-CIT EXAM 1,12,14,000/- SHARE IN COURSE FEES CENTERS SHARE IN COURSE FEE 1,60,17,471/- AS PER HIS OBSERVATION, HE HAS NOT DEDUCTED TDS ON TOTAL PAYMENT OF RS. 18,02,92,891/- U/S 194J OF THE ACT @ 10%. HE GAV E REASONABLE 5 ITA NO. 896/JP/2014 RAJASTHAN KNOWLEDGE CORP. LTD. VS. ITO TDS OPPORTUNITY OF BEING HEARD, WHICH WAS CONSIDERED BY H IM. THE REPLY OF THE ASSESSEE HAS BEEN REPRODUCED ON PAGE 2 TO 6 OF THE ASSESSMENT ORDER. THE ASSESSING OFFICER HAS HELD THAT THE ASSES SEE HAS RUN IT LITERACY COURSES FOR IT EDUCATION AND THE IT ENABLED EDUCATION WITH THE BASIC TEACHING, LEARNING PROCESS AND ITS MANAGEMENT NAMELY RS-CIT. THE ASSESSEE WAS CARRYING OUT THESE ACTIVITIES THROUG H VARIOUS SUPPORTING AGENCIES/CENTRES LIKE DLC, PSA & ITGKS. H E FURTHER CONSIDERED THE WORD TECHNICAL WITH REFERENCE TO FEE S FOR TECHNICAL SERVICES AND HELD THAT PAYMENT MADE TO ITGK BY THE A SSESSEE FALLS UNDER THE CATEGORY OF TECHNICAL SERVICE AND IS LIAB LE TO BE DEDUCTED TDS U/S 194J OF THE ACT. THE PAYMENT MADE TO ITGK WAS CLAI MED AS SHARING OF INCOME FOR COURSE FEES NOT EXPENDITURE. THE ASSES SEE COMPANY FOR THE PURPOSE OF ITS CONVENIENCE, HAD CATEGORIZED THE SAID FEES SHARED AS MARKETING CLAIM AND INFRASTRUCTURE CLAIM. AFTER CON SIDERING THE CBDTS CIRCULAR NO. 275/201/95-IT(B) DATED 29/01/1997 AND T HE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF HINDUSTAN COCA COLA BEVERAGES (P) LTD. VS. CIT 293 ITR 226 (SC) HAS HELD LIABLE TO BE DEDUCTED TDS U/S 194J. ACCORDINGLY, HE CREATED DEMAND U/S 201(1) /201(1A) AS UNDER:- 6 ITA NO. 896/JP/2014 RAJASTHAN KNOWLEDGE CORP. LTD. VS. ITO TDS HEAD PARTICULARS PAYMENT AMOUNT RATE OF TDS U/S 194J @% SHORT DEDUCTION U/S 201(1) INTEREST U/S 201(1A) TOTAL DEMAND SHARE IN RS- CIT COURSE FEES ITGKS SHARE IN RS-CIT COURSE FEES 153061420 10 15306142 2544753 17850895 SHARE IN COURSE FEES CENTRES SHARE 16017471 10 1601747 216035 1817782 TOTAL 1 ,69,07,889 27,60,788 1,96,68,677 3. BEING AGGRIEVED BY THE ORDER OF THE ASSESSING OF FICER, THE ASSESSEE CARRIED THE MATTER BEFORE THE LD CIT(A), WH O HAD CONFIRMED THE ORDER OF THE LD ASSESSING OFFICER BY OBSERVING AS UNDER:- 4.3 I HAVE CAREFULLY CONSIDERED THE FINDINGS OF THE AO AS ALSO THE SUBMISSION OF THE APPELLANT. THE UNDISPUTED FACT S ARE THAT M/S RKCL HAS BEEN INCORPORATED WITH THE MAIN OBJECTIVE TO DEVELOP A NEW EDUCATIONAL FRAMEWORK TO IMPLEMENT, SUPERVISE AND REGULATE THE IT EDUCATION I N THE STATE OF RAJASTHAN BY PROMOTING IT ENABLED EDUCATION PROGRAMMES MAINLY FOR THE EMPLOYEES OF GOVT. OF RAJASTHAN AS ALSO FOR PEOPLE OF RAJASTHAN. IT IS AL SO FACT THAT FOR SUCH MANDATE M/S RKCL HAS INVOLVED MKCL(MAHARASHTRA KNOWLEDGE CORPORATION LTD.), VMOU, DLCS, PSAS AND ITGKS. M/S MKCL WAS THE TECHNOLOGY PROVIDER, PSAS WERE APPOINTED TO IMPLEMENT THE RKCL 7 ITA NO. 896/JP/2014 RAJASTHAN KNOWLEDGE CORP. LTD. VS. ITO TDS PROGRAMMES AND TO APPOINT ITGKS. DLCS WERE APPOINTE D FOR INTER RELATED OTHER PROCEDURAL ACTIVITIES AND V MOU WAS APPOINTED FOR CONDUCTING OF EXAMS. IT IS ALSO FACT THAT M/S RKCL FOR COMPLETION OF SUCH TASK HAS ASSIGNED VARIO US SPECIFIC WORKS TO DIFFERENT AGENCIES AS MENTIONED AB OVE AND FOR SUCH ASSIGNED WORKS, NECESSARY AGREEMENTS HA VE ALSO BE ASSIGNED. FOR SUCH ASSIGNED WORK M/S RKCL H AS MADE PAYMENT TO THESE AGENCIES. IT IS ALSO FACT THA T WHILE MAKING PAYMENT TO PSAS, DLCS AND MKCLS TDS HAS BE EN DEDUCTED. HOWEVER, IN RESPECT OF PAYMENT MADE TO ITGK S AND VMOUS NO TDS HAS BEEN DEDUCTED. AS REGARDS VMOU AS PER A.O. THE INCOME OF VMOU BEING A UNIVERSITY W AS EXEMPT U/S 10(23)(C)(II)(AB) AND THEREFORE TDS WAS NO T TO BE DEDUCTED. THE A.O.S CASE IS THAT ALL THESE AGENC IES WERE ENTRUSTED WITH THE WORK OF IMPARTING OF COMPUTER TRAI NING ETC. AND FOR SUCH WORK ALL THESE AGENCIES WERE PAID F OR THEIR SERVICES AND THEREFORE TDS WAS TO BE DEDUCTED. THE A.O . ALSO NOTED THAT AS PER DEFINITION OF TECHNICAL SERV ICES IN EXPLANATION 2 TO SEC. 9 L(VII), ANY SERVICES IN CON SIDERATION OF ANY MANAGERIAL, TECHNICAL OR CONSULTANCY SERVICE S WAS COVERED IN THE DEFINITION OF TECHNICAL SERVICES AND THAT THE SERVICES RENDERED BY ITGKS WERE COVERED UNDER THIS DEFINITION. ACCORDINGLY AS PER A.O. THE PAYMENT MADE/INDIRECTLY RECEIVED FROM M/S RKCL BY THE ITGKS WAS LIABLE FOR TDS AND ACCORDINGLY THE A.O. DETERMINED THE TDS LIABILITY U/S 201(1 )/201(1A) OF IT ACT. ON THE OTHE R HAND 8 ITA NO. 896/JP/2014 RAJASTHAN KNOWLEDGE CORP. LTD. VS. ITO TDS THE APPELLANT CASE IS THAT FOR APPLICABILITY OF APP LICATION 194J ONE PERSON SHOULD BE PAYING A PARTICULAR AMOUN T TO ANOTHER PERSON FOR RENDERING OF ANY SERVICES AND TH AT IN THE PRESENT CASE M/S RKCL AND ITGK HAVE NOT MADE OR RECEIVED ANY PAYMENT AND IN FACT THEY HAVE SHARED T HE COURSE FEES AS PER THE AGREED TERMS AND CONDITIONS. AS PER THE APPELLANT, M/S ITGK, RKCL AND VMOU WERE THREE INDEPENDENT COLLABORATOR PARTNERS IN THIS PROJECT A ND EACH OF THESE THREE COLLABORATORS WERE PERFORMING THEIR O WN RESPONSIBILITIES FOR COMPLETING EDUCATION TO THE LE ARNERS AND THAT THEY WERE SHARING THE FEES AS PER THEIR AGREED TERMS AND CONDITIONS. IT IS ALSO STATED THAT BOTH M/S ITGK AND VMOU HAVE NOT ISSUED ANY BILLS OR INVOICES ON THE R KCL AND THAT ACCORDINGLY IT CANNOT SAID THAT ANY PAYMENT WAS MADE BY M/S RKCL TO ITGKS FOR RENDERING OF ANY TECHNICAL SERVICES. THE APPELLANT HAS ALSO PLACED RELIANCE ON VARIOUS CASE LAWS INCLUDING DECISION OF CIT(A), ALWAR IN APPE LLANT OWN CASE. HOWEVER, ON CAREFUL CONSIDERATION OF ALL TH ESE RELEVANT FACTS, I FIND MERIT IN THE FINDINGS OF THE A.O. THAT SUCH PAYMENTS WERE ON ACCOUNT OF PROFESSIONAL/TECHNI CAL SERVICES AND TDS WAS TO BE DEDUCTED U/S 194J OF IT ACT . IT MAY BE NOTED THAT THE WHOLE OF THE INITIATIVE FOR IM PARTING OF SUCH IT ENABLED EDUCATION TO THE EMPLOYEES OF GOV T. OF RAJASTHAN AND OTHER PEOPLE HAVE BEEN TAKEN BY M/S R KCL I.E. APPELLANT AT THE INSTANCE OF GOVT. OF RAJASTHA N AND UNDOUBTEDLY M/S RKCL WAS THE DOMINANT PLAYER IN SUCH 9 ITA NO. 896/JP/2014 RAJASTHAN KNOWLEDGE CORP. LTD. VS. ITO TDS VENTURE. IT MAY ALSO BE NOTED THAT FOR M/S RKCL IT WAS NEVER A BUSINESS MODEL AND IN FACT THE OBJECTIVE WAS TO PROMOTE THE IT ENABLED EDUCATIONAL PRAGRAMME AND ACCORDINGLY M/S RKCL ASSIGNED DIFFERENT WORK TO DIFF ERENT AGENCIES I.E DLC, PSA, ITGK, VMOU ETC. M/S RKCL DEVELOPED DIFFERENT SUPPORT SYSTEM AND INVOLVED VAR IOUS AGENCIES WHO WERE ASSIGNED SPECIFIC WORK AND THESE AGENCIES INCLUDING M/S ITGK WERE TO DELIVER SUCH WORK/SERVICES AS PER THE REQUIREMENT OF M/S RKCL FOR WHICH PAYMENT WAS MADE TO THESE AGENCIES. ALL THESE AGENCI ES HAVE CARRIED OUT THEIR WORK WHICH WERE IN THE NATURE O F MANAGERIAL AND TECHNICAL SERVICES AS PER THE DIRECT IONS OF M/S RKCL, THEREFORE THE RELATION BETWEEN M/S RKCL AN D OTHER DIFFERENT AGENCIES INCLUDING ITGKS WERE NEVER OF PRINCIPAL TO PRINCIPAL BASIS AND IN FACT THE RELATI ON AND TRANSACTIONS BETWEEN THESE AGENCIES WERE OF PRINCIPA L TO AGENT BASIS AND THEREFORE ON PAYMENTS MADE TO THESE AGENCIES, TDS WAS TO BE DEDUCTED. IT IS ALSO FACT THA T ON THE SIMILAR WORK ASSIGNED TO PSAS, DLCS AND MKCL, THE APPELLANT HAS DEDUCTED TDS ON THE PAYMENTS. AS REGAR DS THE CONTENTION OF THE APPELLANT THAT NO PAYMENT WAS MADE BY M/S RKCL TO M/S ITGK, IT MAY BE NOTED THAT SUCH CONTENTION CANNOT SAID TO BE CORRECT IN AS MUCH AS IT WAS ONLY FOR THE PROCEDURAL PURPOSE AND ADMINISTRATIVE CONVENIENCE THAT THE AGGREGATE AMOUNT FROM THE LEAR NERS WAS FIRST COLLECTED BY M/S ITGK AND THEN THE WHOLE AM OUNT 10 ITA NO. 896/JP/2014 RAJASTHAN KNOWLEDGE CORP. LTD. VS. ITO TDS WAS REMITTED TO M/S RKCL. SUBSEQUENTLY M/S RKCL KEPT RS. 850/- AND REMAINING AMOUNT OF RS. 1450/- PER LEARNE R WAS REMITTED/PAID TO THE ITGKS. THE PAYMENT OF RS. 1450/ - PER LEARNER TO THE ITGKS WAS FOR RENDERING OF TECHNICAL SERVICES AS PER PROVISIONS OF SEC. 194J OF IT ACT AND ON AGGR EGATE OF SUCH PAYMENT TDS WAS TO BE DEDUCTED. THE APPELLANT HA S MAINLY RELIED ON THE DECISION OF CIT VS. NUT LTD. [20 09], 318 ITR 89. THE ANOTHER DECISION IN THE CASE OF CIT VS. CARRIER LAUNCHER INDIA LTD. WAS DECIDED RELYING ON T HE DECISION IN THE CASE OF CIT VS. NIIT LTD. EVEN THE WO RTHY CIT(A), ALWAR HAS DECIDED THE ISSUE RELYING ON THE DE CISION IN THE CASE OF CIT VS. NIIT LTD. (SUPRA). HOWEVER, AS MENTIONED BY THE A.O. THE FACTS IN THE CASE OF CIT V S. NIIT LTD. WERE DIFFERENT WITH THE FACTS OF THE APPELLANT C ASE AND THE BASIC AND VITAL DIFFERENCE IN THE FACTS OF THE APPELLANT CASE WAS THAT IN THE APPELLANT CASE THE APPELLANT IS THE DOMINANT PLAYER AND OTHER AGENCIES HAVE RENDERED TH E SERVICES AS PER THE REQUIREMENT OF ASSESSEE COMPANY . MOREOVER, IN THE CASE OF NIIT LTD., THE NIIT WAS AN EX ISTING BUSINESS BRAND FOR COMPUTER EDUCATION AND THIS WAS A LWAYS A BUSINESS MODEL AND ANYBODY COULD HAVE TAKEN THIS BUSINESS MODEL AS PER NORMAL TERMS AND CONDITIONS. HOWEVER, IN THE CASE OF THE APPELLANT THERE WAS NEVER ANY SUCH BUSINESS MODEL OR THE EXISTING BRAND AND THE A PPELLANT HAS TAKEN THE SERVICES OF OTHER AGENCIES FOR FULFIL LING THE OBJECTIVE OF COMPUTER EDUCATION IN THE STATE OF RAJ ASTHAN 11 ITA NO. 896/JP/2014 RAJASTHAN KNOWLEDGE CORP. LTD. VS. ITO TDS AS PER THE MANDATE GIVEN BY GOVT. OF RAJASTHAN. IT MAY BE MENTIONED THAT IN THE CASE OF NIIT THEIR COMPUTER PROGRAMMES UNDER THE BRAND NAME NIIT WAS JUST LIKE A SALEABLE PRODUCT AND ANY INTERESTED PARTY COULD PUR CHASE THE SAME WITH CERTAIN CONDITIONS. BUT IN THE APPELLA NT CASE NO SUCH BUSINESS BRAND OR SALEABLE PRODUCT WAS IN EXISTENCE. IN FACT THE OBJECTIVE AND MANDATE IN THE CASE OF THE APPELLANT WAS TO ENHANCE AND IMPROVE THE IT ENABL ED EDUCATION IN THE STATE OF RAJASTHAN AND FOR ACHIEVE MENT OF SUCH OBJECT THE APPELLANT HAS TAKEN PROFESSIONAL AN D TECHNICAL SERVICES OF OTHER AGENCIES INCLUDING ITGK S FOR WHICH PAYMENTS WERE MADE. THEREFORE, THE FACTS OF THE CASE OF NIIT ALTOGETHER DIFFERENT WITH THE FACTS OF T HE APPELLANT CASE. IN THIS BACKGROUND, IT CANNOT SAID THAT THE THREE COLLABORATORS NAMELY M/S RKCL, ITGK AND VMOU H AVE INDEPENDENTLY CARRIED OUT THEIR BUSINESS RESPONSIBI LITIES AND SHARED THE FEES AS PER THE AGREED TERMS. THE FACTS R EMAINS THAT M/S ITGKS HAVE PERFORMED THE ASSIGNED RESPONSIBILITIES AS PER THE DIRECTIONS AND OVERALL CONTROL OF M/S RKCL WHICH WERE IN THE NATURE OF TECHNICAL SERVIC ES AND ON THE PAYMENT MADE ON ACCOUNT OF SUCH SERVICES TDS WAS TO BE DEDUCTED U/S 194J OF IT ACT. IN VIEW OF THE SE FACTS THE A.O. HAS RIGHTLY RAISED DEMAND U/S 201(1)/201(1A) OF IT ACT AMOUNTING TO RS. 19668677/ -. THE GROUNDS OF APPEAL ARE ACCORDINGLY DISMISSED. 12 ITA NO. 896/JP/2014 RAJASTHAN KNOWLEDGE CORP. LTD. VS. ITO TDS 4. NOW THE ASSESSEE IS APPEAL BEFORE US. THE LD AR OF THE ASSESSEE HAS REITERATED THE ARGUMENTS MADE BEFORE THE LD CIT( A) AND ALSO ARGUED THAT THE APPELLANT HAS NOT LIABLE TO DEDUCT ANY TAX AT SOURCE ON THE PAYMENT MADE TO ITGK/VMOU. THIS PAYMENT IS NOT C OVERED U/S 194J OF THE ACT BUT IT AN ARRANGEMENT OF SHARING OF THE COURSE FEES COLLECTED FROM LEARNERS. THESE PAYMENTS ARE ALSO NOT COVERED FEES FOR TECHNICAL SERVICES AS ENUMERATED IN SECTION 194J. H E FURTHER EXPLAINED THE MAIN OBJECT OF THE COMPANY, COURSE CONDUCTED WIT H THE HELP OF VARIOUS AGENCIES AND COLLABORATIONS. THE MAIN AGENCI ES ARE INFORMATION TECHNOLOGY GYAN KENDRA (ITGK), PROGRAM SUPPORTING AG ENCY (PSA), MAHARASTRA KNOWLEDGE CORPORATION LTD. (MKCL) AND DIS TRICT LEAD CENTRE (DLC). THE PSA HAS A RELEVANT EXPERTISE/EXPERIENCE C ARRYING OUT CERTAIN ACTIVITIES ON BEHALF OF THE ASSESSEE. THE ASSESSEE SHALL PAY RS. 100 PER CONFIRMED LEARNER. VARIOUS TECHNOLOGIES AND SERVICE S ARE PROVIDED BY MKCL AS PER AGREEMENT. THESE ACTIVITIES WERE CARRIED OUT BY DLC. THE CERTIFICATION HAS BEEN GIVEN BY THE VARDHAMAN, MAHA VEER OPEN UNIVERSITY, KOTA. THE LEARNER IS REQUIRED TO DEPOSIT ENTIRE COURSE FEES @ RS. 2300 FOR RS-CIT WITH THE CONCERNED ITGK, WHO RECEI VED THE SUM ON BEHALF OF THE STAKEHOLDERS AND ALSO ISSUED A RECEIP T FOR THE SAME. THE 13 ITA NO. 896/JP/2014 RAJASTHAN KNOWLEDGE CORP. LTD. VS. ITO TDS ENTIRE RECEIPT FROM THE LEARNER BY ITGK WAS DEPOSITED IN THE ACCOUNT OF THE ASSESSEE FOR THE PURPOSE OF CENTRALIZE COLLECTI ON AND ONWARD DISTRIBUTION OF REVENUE SHARED OUT OF THE COURSE FE ES AS PER COLLABORATION BETWEEN THEM. RS. 2300/- IS SHARED BET WEEN VARIOUS AGENCIES AS UNDER:- S.NO. STAKEHOLDER REVENUE SHARE (I) ITGK RS. 1450/- (II) RKCL RS. 750/- (III) VMOU RS. 100/- TOTAL RS. 2300/- HE HAS FURTHER DRAWN OUR ATTENTION ON ASSESSEES CA SE DECIDED BY THIS BENCH IN ITA NO. 38 TO 40/JP/2013 FOR A.Y. 2009-10 TO 2011-12 VIDE ORDER DATED 13/2/2015 WHEREIN IDENTICAL ISSUE HAS BE EN CONSIDERED BY THE HONBLE BENCH AND DECIDED THE APPEAL IN FAVOUR OF THE ASSESSEE. THEREFORE, HE PRAYED TO REVERSE THE ORDER OF THE LD CIT(A). 5. AT THE OUTSET, THE LD DR HAS VEHEMENTLY SUPPORTE D THE ORDER OF THE LOWER AUTHORITIES AND PRAYED TO UPHOLD THE ORDER OF THE LD CIT(A). 6. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. THE ID ENTICAL ISSUE HAS BEEN DECIDED BY THE COORDINATE BENCH IN ASSESSEES OWN CASE FOR A.Y. 14 ITA NO. 896/JP/2014 RAJASTHAN KNOWLEDGE CORP. LTD. VS. ITO TDS 2009-10 TO 2011-12 VIDE ORDER DATED 13/2/2015. THE O PERATIVE PORTION OF THE COORDINATE BENCHS ORDER IS REPRODUCED AS UN DER:- 6. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. THE CO NTENTS OF THE AGREEMENTS REFERRED TO BY THE ASSESSEE, PLAC ED ON THE RECORD, HAVE NOT BEEN DISPUTED BY THE DEPARTMEN T. THUS, THE UNCONTROVERTED FACT WHICH EMERGES FROM THE RECORD IS TO THE EFFECT THAT THE PAYMENTS IN QUESTI ON WERE NOT MADE BY ASSESSEE QUA ANY SERVICE OF PROFESSIONA L OR TECHNICAL NATURE RENDERED TO THE PAYEE. ALL THE ABO VE ENTITIES BY A VALID COLLABORATION, FORMED A BUSINES S MODULE ON THE REVENUE SHARING BASIS FOR IMPARTING COMPUTER EDUCATION TO RAJASTHAN GOVT. EMPLOYEES AND OTHERS. THE SERVICES IF ANY WERE PROVIDED TO THE STUDENTS AND TH E PAYEE IN QUESTION. THE NATURE OF INTERNAL DISTRIBUTION OF REVENUE BASED ON THE MUTUAL AGREEMENTS CANT BE HELD TO BE RENDERING OF PROFESSIONAL OR TECHNICAL SERVICES BY ANY STRETCH OF IMAGINATION. WE FIND MERIT IN THE ERUDIT E CONTENTIONS OF LD. COUNSEL FOR THE ASSESSEE. OUR VI EW IS REINFORCED BY HONBLE DELHI HIGH COURT JUDGMENT IN THE CASE OF CAREER LAUNCHERS, THE ACT OF SHARING OF REVENUE IN A MULTI ENTITY BUSINESS MODEL CANNOT BE HELD AS CONTR ACT PAYMENTS AND TAKING THE LOGIC FURTHER THEY CANNOT B E HELD AS PAYMENTS ON ACCOUNT OF RENDERING OF ANY PROFESSI ONAL OR TECHNICAL SERVICES AS CONTEMPLATED BY SECTION 194J OF THE 15 ITA NO. 896/JP/2014 RAJASTHAN KNOWLEDGE CORP. LTD. VS. ITO TDS ACT. IN VIEW THEREFORE, WE FIND NO INFIRMITY IN THE I MPUGNED ORDERS OF THE LEARNED CIT(A), WHICH ARE UPHELD. BY RESPECTFULLY FOLLOWING THE ORDER OF THE COORDINAT E BENCH IN ASSESSEES OWN CASE, WE REVERSE THE ORDER OF THE LD CIT(A) AND AL LOW THE ASSESSEES APPEAL. 7. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 27/01/2016. SD/- SD/- YFYR DQEKJ VH-VKJ-EHUK (LALIET KUMAR) (T.R. MEENA) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 27 TH JANUARY, 2016 RANJAN* VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- RAJASTHAN KNOWLEDGE CORPORATION LIMITED, JAIPUR. 2. IZR;FKHZ @ THE RESPONDENT- THE INCOME TAX OFFICER, TDS-2, JAIPUR . 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO.896/JP/2014) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR