TaxTMI 
TaxTMI 
2011 (12) TMI 546
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....fied in treating the fees paid for wheeling/transport charges as payment for technical services, leading to deduction of tax at source under section 194J of the Income-tax Act, 1961. 2. The facts of the case are that a survey was conducted in the business premises of the assessee situated at Rouse Avenue, New Delhi on 22.01.2009. It was found that the assessee has been carrying on the business of purchase and sale of electricity in bulk. This business requires transmission of electricity also. In respect of transportation charges, the assessee had deducted tax at source @ 2% u/s 194C of the Act. The AO was of the view that the assessee was required to deduct the tax at source @ 5% of the payment u/s 194J as it was providing technical servi....
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....s 201(1)/201(1A) is less than tax paid by deductee entities, then the AO (TDS) should charge interest u/s 201(1A) from due date of deduction up to date of filing of return by deductee companies/firms." 2.1 Aggrieved by this order, the assessee is in appeal before us. The ld. counsel submitted that the question to be decided is in regard to the applicability of section 194C or section 194J for deduction of tax at source from payment made for transportation charges (known as wheeling charges in the industry). It is his case that electricity is goods in so far as the assessee is concerned and, therefore, the wheeling charges could at best be said to be transportation of goods covered u/s 194C of the Act. A reference is made to the decision of....
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....ressions managerial services and consultancy services which necessarily involve a human element or, what is now days fashionably called, human interface. In the facts of the present appeals, the services rendered qua interconnection/Port access do not involve any human interface and, therefore, the same cannot be regarded as 'technical services' as contemplated under Section 194J of the said Act." 2.2 Our attention has also been drawn towards the decision in the case of Jaipur Vidyut Vitran Nigam Ltd. Vs. Dy. CIT, rendered by 'A' Bench of Jaipur Tribunal in ITA No. 132/JP/2009 for assessment year 2006-07, a copy of which has been placed in the paper book between page nos. 144 to 173. In paragraph no. 9.6, it has been mentioned that technic....
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.... transportation and he was required to state whether maintenance of sophisticated systems would involve competent manpower to handle the same. It was answered that it is a highly technical question which also involves legal implication. Therefore, the time was sought to send a written reply later on. The case of the ld. counsel is that at best the issue is complex and there is no clear answer whether wheeling charges are in the nature of transportation of goods or rendering of technical services. Since the assessee-company was dealing in electricity, it was taken that the electricity is goods and, therefore, transportation charges are covered u/s 194C. 2.4 In view of the aforesaid, it was argued that the demand raised may be deleted by not....