TaxTMI 
TaxTMI 
2017 (1) TMI 249
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....ted 30.3.2011 under section 201(1) and 201(1A) of the Income Tax Act, 1961 (in short 'the Act'). 3. In this appeal, Revenue has raised the following Grounds of appeal :- "1. The Ld. CIT(A) has erred on the facts and in circumstances of the case and in law in deleting the addition of short deduction determined on account of TDS payment made to CWC, CFS BPT, AAI u/s. 194I and without properly appreciating the factual and legal matrix of the case as clearly brought out in order u/s. 201(1)/201(1A) of the Income-tax Act, 1961. 2. The Ld. CIT(A) has erred on the facts and in circumstances of the case and in law in not appreciating the fact that the definition of rent in explanation (1) to section 194I is very wide in its ambit and includes within its sweep, payment by whatever name called which is paid pursuant to any agreement or arrangement. 3. The Ld. CIT(A) has erred on the facts and in circumstances of the case and in law in deleting the addition on account of TDS payment towards survey fees made u/s. 194J and without properly appreciating the fact that the services require technical or professional knowledge and the payments were effected by the assessee to the respect....
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....lready been deleted by him and interest deletion is consequential to the quantum deletion for which further appeal has been recommended vide ground No.1 to 8." 4. Before we proceed to adjudicate the individual Grounds of appeal, the brief background can be summarized as follows. The respondent-assessee is a Partnership firm which is, inter-alia, engaged in the business of Customs House Agent (CHA) in accordance with the licensing conditions prescribed by the Customs Act, 1961. A survey action u/s 133A of the Act was carried out in the premises of assessee on 24.2.2011 in consequence of which orders u/s 201(1) and 201(1A) of the Act were passed by the Assessing Officer for the captioned Assessment Years. For Assessment Year 2008-09, Assessing Officer found the assessee as an 'assessee in default' for not having deducted tax at source under various sections prescribed in Chapter XVII-B of the Act. As a consequence, a demand of Rs. 94,24,617/- was determined u/s 201(1) r.w.s. 201(1A) of the Act. The assessee firm carried the matter in appeal before CIT(A) who has disagreed with the Assessing Officer and allowed the pleas of assessee on various issues against which Revenue is in app....
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.... within the meaning of Sec. 201(1) and 201(1A) of the Act. 6. Against the aforesaid, the only plea brought out by the ld. DR is that the meaning of expression 'rent' used in Sec. 194I of the Act is very wide and would include within its sweep payment by whatever name called, made in pursuance of any arrangement or agreement and, therefore, under the present circumstances the payment made by the assessee constituted 'rent' which was liable for deduction of tax at source u/s 194I of the Act. 7. On the other hand, the learned representative for the assessee pointed out that the Department had taken similar action in a multiple set of cases involving Customs House Agents and that in a few of such cases, Tribunal has already adjudicated the issue and upheld the stand of assessee that such payments are not liable for deduction of tax at source u/s 194I of the Act. In this context, our attention was drawn to the following decisions, wherein the stand of assessee has been upheld: i) CIT v. Cargo Linkers, (2008) 218 CTR (Del) 695 ii) Hah Logistics v. DCIT ITA No. 1864/Del/2011 iii) DCIT v. Jay Kay Freighters Pvt. Ltd., ITA No. 3407/Del/2011 iv) ITO v. M/s. Universal Traffi....
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....ilar to that considered by us while dealing with the payments made to CWC, CFS, BPT and AAI and, therefore, the conclusion drawn by CIT(A) to the effect that assessee cannot be construed as an 'assessee in default' within the meaning of Sec. 201(1) and 201(1A) of the Act is hereby upheld. Thus, in Ground of appeal no. 3 also Revenue fails. 11. The issue raised by the Revenue in Ground of appeal no. 4 relates to internet charges paid by the assessee on which no tax was deducted at source. The fact-position is that such payments have been made by the assessee-firm to concerns providing broadband facilities. As per the Assessing Officer, payments have been made for obtaining a technical service and, therefore, tax was liable to be deducted at source u/s 194J of the Act. Notably, Sec. 194J of the Act prescribes for deduction of tax at source on payments made for obtaining any managerial, technical or consultancy services, as also for services of technical or other personnel, which could be regarded as fees paid for technical services. The stand of assessee was that the broadband company did not provide any technical knowledge to the assessee and that the broadband service provider w....
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....rtation of cargo after the customs clearance. Assessee explained that it hired services of contractors for handling of the goods and in the course of providing such service, the contractors engaged the services of Cranes and Forklift operators. The assessee explained that it considered the services being provided by the contractors as a 'composite service' for handling of goods on which the requisite tax was deducted at source in terms of Sec. 194C of the Act. It was pointed out that there was no contract entered by the assessee for hiring of Forklifts and Cranes specifically so as to hold that assessee had made any payments towards rental of Forklifts and Cranes. The CIT(A) has accepted the plea of assessee by noticing that the payments in question were made by the assessee towards a 'composite contract' for handling of the goods and that it is the contractors who had in-turn hired the Cranes/Forklifts for their use. Thus, CIT(A) upheld the stand of assessee that such payments are subject to deduction of tax at source u/s 194C and not u/s 194I of the Act, as contended by the Assessing Officer. 14. Before us, the ld. DR has merely pointed out that the payments made by the assessee ....
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....sidering such payments as fees for technical or professional services. CIT(A) upheld the stand of assessee by concluding that such services do not involve rendering of any professional or technical services and that deduction of tax at source u/s 194C of the Act was correctly done by the assessee. Against such a decision, Revenue is in appeal before us. 18. Before us, ld. DR has reiterated the stand of the Assessing Officer that the services are in the nature of technical or professional services, which would require deduction of tax at source u/s 194J of the Act. In our considered opinion, the plea raised by Revenue is without any basis. Factually speaking, it emerges from record that the persons entrusted with the job of fumigation carry out spraying of chemicals, etc. to prevent attack of pests so that cargo/goods being handled by the assessee do not get damaged. Ostensibly, the payments made by assessee would, inter-alia, include cost of chemicals, pesticides, etc. Apart from bald assertions, Revenue has not been able to demonstrate the use of any technical information or skill which is required to perform such fumigation activities and, therefore, invoking of Sec. 194J of t....