TaxTMI Login
AI OCR ✕Convert scanned orders, printed notices, PDFs and images into clean, searchable, editable text within seconds. Starting at 2 Credits/page
Try Now →Just a moment...
AI OCR ✕Convert scanned orders, printed notices, PDFs and images into clean, searchable, editable text within seconds. Starting at 2 Credits/page
Try Now →
Press 'Enter' to add multiple search terms. Rules for Better Search
Use comma for multiple locations.
---------------- For section wise search only -----------------
Accuracy Level ~ 90%
of 
Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of Press 'Enter' after typing page number.
Issues: (i) Whether tax was deductible at source under section 194J of the Income-tax Act, 1961 on transmission charges paid to the transmission utility; (ii) Whether tax was deductible at source under section 194J of the Income-tax Act, 1961 on SLDC charges paid to the State Load Dispatch Centre.
Issue (i): Whether tax was deductible at source under section 194J of the Income-tax Act, 1961 on transmission charges paid to the transmission utility.
Analysis: The charges for transmission were treated as payments for use of the transmission network and not as consideration for managerial, technical or consultancy services. The reasoning adopted from earlier Tribunal authority was that section 194J applies only where technical knowledge or skill is made available to the payer, and not where a facility is merely provided through technical systems or infrastructure. Transmission of electricity through the grid was held to be comparable to use of a standard facility, and not the rendering of technical services to the payer.
Conclusion: No tax was deductible at source on transmission charges under section 194J, and the assessee succeeded on this issue.
Issue (ii): Whether tax was deductible at source under section 194J of the Income-tax Act, 1961 on SLDC charges paid to the State Load Dispatch Centre.
Analysis: The SLDC charges were examined in the light of the statutory functions under the Electricity Act, 2003 and the character of the payments. The charges were found to be reimbursement of actual expenses for the statutory grid-control mechanism, and the fact that some human element was involved in the SLDC's functioning did not mean that technical services were rendered to the payer. Applying the earlier Tribunal view, the payment was not held to attract the definition of fees for technical services for purposes of section 194J.
Conclusion: No tax was deductible at source on SLDC charges under section 194J, and the assessee succeeded on this issue.
Final Conclusion: The dispute on transmission charges was decided in favour of the assessee, and the dispute on SLDC charges was also decided in favour of the assessee, with the result that the TDS demand did not survive on either category of payment.
Ratio Decidendi: Section 194J is attracted only where technical, managerial, or consultancy services are rendered to the payer by making technical knowledge or skill available, and it does not apply to mere use of a technical facility or reimbursement of actual expenses.
TaxTMI 
TaxTMI 
