TaxTMI 
TaxTMI 
2016 (10) TMI 551
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.... and disposed-off by way of this common order for the sake of convenience. 2. The brief facts of the case are that the assessee is a company which is engaged in the business of manufacturing ferro alloys and generation of electricity. A survey u/s 133A of the Income Tax Act, 1961 (hereinafter called as 'the Act') was conducted in the business premises of the assessee on 10.2.2010. During the course of survey, it was noticed that the assessee has paid open access charges of Rs. 2.12 crores and Rs. 1.11 crores respectively for the assessment years 2009-10 & 2010-11. When questioned about the nature of said expenditure, it was replied that open access charges has been paid to M/s. Power Grid Corporation of India Ltd. towards transmi....
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....on 194J of the Act. Since, the assessee failed to deduct TDS on open access charges, held assessee as an assessee in default u/s 201(1) & 201(1A) of the Act and levied tax and interest for failure to deduct TDS. 3. Aggrieved by the assessment order, the assessee preferred an appeal before the CIT(A). Before the CIT(A), the assessee reiterated the submissions made before the A.O. The assessee further submitted that it has entered into a power purchased agreement with M/s. Reliance Energy Trading Ltd. and transmitted power produced in its plant through transmission lines owned by M/s. Power Grid Corporation of India Ltd. to various parts of country for which it has paid open access charges towards usage of transmission lines through M/s. R....
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....n the assessee and M/s. Reliance Energy Trading Ltd. The CIT(A) further observed that since it is a sale of energy, the question of applicability of the provisions of section 194J of the Act does not arise. With these observations, directed the A.O. to delete the demand raised u/s 201(1) & 201(1A) of the Act. Aggrieved by the CIT(A) order, the revenue is in appeal before us. 5. The Ld. D.R. submitted that the CIT(A) is erred in concluding that transaction between the assessee and M/s Power Grid Corporation Limited is purchase and sale, instead of royalty as defined u/s 9(1)(vi) of the Act. The D.R. further submitted that use of transmission lines owned by Electricity Transmission companies for transmission of power is coming within the d....
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....on of electricity from its plants to various parts of India is not coming within the definition of technical fees as defined u/s 194J of the Act. The assessee further submitted that it has used transmission lines owned by M/s. Power Grid Corporation of India Ltd. and paid charges as fixed by Electricity Regulatory Commission and such agreement cannot be construed as use of any patent, trade mark, license, design, secret formula or process or trade mark of similar property as defined under explanation 2, clause (iva) of section 9(1)(vi) of the Act. 7. The question that needs to answered is whether on facts and circumstances of the case, open access charges paid by the assessee towards transmission of electricity from its plants to various....
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....than transmitting certain quantum of power from one place to another place by paying charges fixed by KERC. There was neither transfer of any technology nor any service attributable to a technical service offered by the KPTCL and accepted by the assessee. Therefore, application of section 194J of the Act to the facts of this case by the revenue is misconceived. 8. In the present case on record, we find that the assessee has used transmission lines owned by M/s. Power Grid Corporation of India Ltd. for transmitting power from its plant to various parts of India. The assessee has paid open access charges through M/s. Reliance Energy Trading Ltd. for use of transmission lines. There is nothing on record to show that the assessee has used an....