TaxTMI 
TaxTMI 
2014 (12) TMI 94
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....SLDC charges to RRVPN were not for technical services liable for making TDS u/s 194J of the I.T. Act as such provision of section 40(a)(ia) are not applicable. (iii) deleting the addition of Rs. 1,73,07,800/- made on account of front end fees paid to HUDCO for raising the loan holding it to be revenue expenditure." 2. The first ground of appeal is against deleting addition of Rs. 1,09,018/- made on account of depositing the PF/ESI payment beyond the prescribed time despite the fact that as per section 36(1)(va) employees contribution should have been deposited in time as prescribed in the relevant law. Section 43B permits delayed payment, if paid before filing the ROI as per section 139(1) in case of employer's contribution not in the case of employees' contribution. In this case, the learned Assessing Officer observed that the assessee company is engaged in distribution and sale of electricity. The assessee company e-filed its return of income on 27/09/2008 declaring total loss of Rs. 1,43,75,48,737/-. This case was scrutinized U/s 143(3) of the Income Tax Act, 1961 (hereinafter referred as the Act). The learned Assessing Officer observed that as per Annexure C-3 of tax audi....
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.... of Deputy Chief Engineer and as per the decision of Hon'ble Apex Court in the case of CIT Vs. Bharti Cellular Ltd. and others, 220 CTR 258 (Delhi) and as per the decision of learned CIT(A) in the case of the assessee company it can be clearly concluded that human intervention is certainly involved in the transmission services and hence the power transmission service provided by RVPN to JVVNL is a technical service as decided by the Hon'ble Apex Court. From the nature of job carried out by the transmission and wheeling & SLDC, it can be clearly envisaged that ii will be a very smaller and lighter term to say that the human presence is required whereas without complete involvement and technical knowledge the jobs performed for above works by the above agencies cannot be even imagined. It is incorrect on the part of the assessee the transmission of the electricity takes place automatically as the electricity is supplied, controlled, increase/decrease of loan, stopping, thereof is at all not possible without complete involvement of high technocrats. It is also incorrect on the part of the assessee to compare such a sensitive issue of transmission of high voltage electricity with a mea....
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.... charges was only a reimbursement of actual expenses and therefore, provisions of Section 194J of the Act or for that matter Section 190C of the Act has not applicable in the present case. The learned Assessing Officer relied upon the decision of Hon'ble Supreme Court in the case of CIT Vs. Bharti Cellular Ltd., 330 ITR 239. This decision was rendered in the context of applicability of TDS provision on services of inter connection/port access facility. Wherein it has held that cellular provider had rendered technical services and had to deduct tax at source or not, would depend on whether the charges were for technical services or not. This involved determination of the fact whether any human intervention was involved, which could not be determined without technical assistance. Therefore, it directed that technical person be examined to decide this issue. In the present case, the issue was of transmission services and not of services of interconnection/port access facility. Therefore, this decision is not applicable. The A.O. also recoded statement of Chief Engineer Shri Arun Kumar Sharma to examine the issue of human interface in the transmission of the electricity by RVPNL to....
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....ond proviso has retrospective effect as has been held in the following case laws:- (i) Bharti Auto Products Vs. CIT (2013) 92 DTR 345/145 ITD 1 (Rajkot) (SB) (Trib) (ii) Rajeev Kumar Agarwal Vs. ACIT (2014) 149 ITD 363 (Agra) (Trib.). (iii) ITO Vs. Jaideep Kumar Sharma (2014) 34 ITR (Trib) 565 (Delhi) dated 25/07/2014. (iv) DCIT Vs. Ananda Marakala (2014) 150 ITD 323 (Bang.) dated 13/09/2013. Therefore, he prayed to confirm the order of the learned CIT(A). 10. We have heard the rival contention of both the parties and perused the material available on the record. The issue is identical to A.Y. 2006-07 and the Coordinate Bench had decided this issue in favour of the assessee and held that provisions of Section 40(a)(ia) of the Act is not applicable on the present fact of the case in ITA No. 132/JP/2009 order dated 30/4/2009, which is reproduced as under:- "9. Considering the submission of the parties on the issues as to what is the nature of payment of wheeling/transmission/SLDC charges on the basis of documents on records and the facts explained and the nature of such payments as well as facts on records whether the same is liable for deduction of tax at source....
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....ssee vide letter dated 06/12/2010. After considering the assessee's reply and various case laws cited by the assessee, the Assessing Officer held as under:- "I have gone through the submission of the assessee, which is not found satisfactory. The assessee has made payment of Rs. 17307800/- to HUDCO for raising loan of Rs. 300 crores for improvement of transmission network and infrastructure. The loans so raised are for capital purpose. Further, the assessee himself not debited the said amount in P&L account rather spread over the said payment in five years. If the assessee company is claiming these expense as revenue expenditure then the total amount should have been claimed one time rather than spreading it over in a time period of five years. This act signifies that the assessee itself is not sure of the nature of these expenses whether of capital or of revenue nature. This is reduced in computation rather than debiting in the P&L account. Thus, the assessee itself is treating the said amount as capital expenditure. Claim of capital expenditure cannot be allowed U/s 37(1) as well as U/s 36(1)(iii) of the Income Tax Act, 1961. Accordingly, the payments so made are of a capital ....