TaxTMI 
TaxTMI 
TaxTMI 
2017 (2) TMI 71
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....t aside the matter to the file of the learned ITO(TDS)-2(2), Mumbai being Assessing Officer (hereinafter called "the AO") having passed orders u/s 201(1)/201(1A) of the Income-tax Act,1961 (Hereinafter called "the Act") . The other two are cross appeals, one filed by the assessee being ITA No. 6030/Mum/2014 and another filed by the Revenue being ITA No. 5950/Mum/2014 are directed against the order passed by the ld. CIT(A) -14, Mumbai dated 21.7.2014 arising from the order dated 28-03-2013 passed by the A.O. u/s 201(1)/201(1A) of the Act. 2. First, we shall take up the appeal filed by the assessee in ITA No. 6029/Mum/2014 for the assessment year 2008-09 wherein the grounds of appeal raised by the assessee in the memo of appeal filed with the Income Tax Appellate Tribunal, Mumbai (hereinafter called "the tribunal") read as under:- "1. The learned CIT (Appeals) erred in holding that contract to DBM Geotechnics Construction Pvt. Ltd. has not been given for simple rock excavation work but is given for Marine Geo Technical Investigation for rock excavation in Mithi River. Therefore, it is covered by the provisions of section 194J and not as per the provisions of section 194C for deduct....
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....rectness of the facts pleaded by the appellant, the AO shall accordingly take a decision in this regard. If the contract to DBM Geotechnics Construction Private Ltd. has been given for rock excavation work, the AO shall not treat the appellant to be in default and shall accordingly delete the demand raised. However, if as observed by the AO, the contract is for marine geo-technical investigation for the purposes of rock excavation in Mithi river, the AO's decision in this regard shall be upheld. In that case, however, the AO shall give relief to the appellant in respect of the tax already paid by DBM Geotechnics Construction Private Ltd. if any, on its receipts from the appellant, in view of the decision of the Hon'ble Apex Court in the case of Hindustan Coca Cola Beverage (P) Ltd. vs. CIT [2007] 293 ITR 226. The AO is therefore directed accordingly." Thus, the matter was set aside by learned CIT(A) in the first round of litigation to the file of the A.O. for de-novo determination of the issue in accordance with directions of the learned CIT(A) , and the A.O. in second round of litigation gave an opportunity to the assessee to provide the following information vide letter ....
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....C'. On further examination of the tender document, it is seen in Chapter VII (e) Schedule B at page no. 82 onwards of tender documents (enclosed as Annex. '0' to this order) speaks about item of work to be carried out and rate for the same work. In this Schedule at item no. 7 on page nO.83 is the list of laboratory test and number of such tests required to be conducted to carry out excavation of rocks by the contractor. The same are listed out as under: Laboratory Tests: 1) Moisture Content 2) Specific Gravity 3) Consistency Limits. 4) Gravel & Fine Sieve analysis 5) Hydro Meter analysis 6) Consolidation 7) Direct Shear Test 8) Triaxial (UU) 9) UDS all about tests. Rock Samples: 10) Specific Gravity 11) Water absorption 12) Porosity 13) Crushing Strength 14) Tensile Test 15) Modulus of Elasticity & Poission's ratio 16) Chemical analysis of soil to determine Chloride & Sulphate content and 17) Chemical analysis of groundwater to determine chlorine and sulphate content and PH. From the above list of laboratory test and rock examination, it is crystal clear that the contract was not just a simple work contract, but was for providing highly techni....
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....: " In order to undertake work systematically ,a proper investigation of the rock was undertaken. It is further submitted that contract for excavation of rock from Mithi River , M/s DBM Geotechnics Construction Pvt. Ltd. is also charging Work Contract Tax(WCT) as per the Maharashtra Value Added Tax Act. Accordingly it is a contract for excavating rock, hence the provisions of section 194C is applicable and not 194J. In view of the above, the finding of the AO that provisions of section 194J is applicable is not correct as the appellant has already deducted TDS as per the provisions of section 194C. We rely on the recent decision of the Hon. Gujarat High court in the case of Essar Oil Ltd. V. ITO-262 ITR 63(Guj)." The learned CIT(A) confirmed the order of the A.O. vide appellate orders dated 16.07.2014 in second round of litigation by observing as under:- "I have considered the facts of the case, submission of the appellant, order u/s 201(1) and 201(1A) r.w.s 250 of the I.T. Act, 1961 and the order of my Ld. Predecessor. My Ld. Predecessor has set aside this issue to the file of the A.O. to verify the correctness of the fact and accordingly take a decision holding inter-alia as....
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....with C. D. * Item No. 7: Laboratory tests (i) Moisture content. (ii) Specific gravity. (iii) Consistency Limits [L.L.P.L.S.L.] (iv) Gravel and fine sieve analysis. (v) Hydro meter analysis. (vi) Consolidation. (vii) Direct Shear test. (viii) Triaxial(UU). (ix) UDS all above test. ROCK Samples. (x) Specific gravity. (xi) Water absorption. (xii) Porosity, (xiii) Crushing strength. (xiv) Tensile Test. (xv) Modulus of elasticity and Pission's Ratio. (xvi) Chemical analysis of soil to determine chloride and sulphare content. (xvii) Chemical analysis of ground water to determine chloride and sulphate content and P. H. 4.5 Thus, from the above, it is clear that the contract to DBM is not given for simple rock excavation work but is given for 'Marine Geo Technical Investigation' for rock excavation in Mithi river. Therefore, respectfully following the decision of the Ld. Predecessor, the action of the A.O. is upheld." 4.6 The reliance of the Ld. A. R. on the decision of Essar Oil (Supra) cannot come to his rescue. In that case, the assesse had entered into 3 contracts In the instant case, there is a single contract. On analysis of the sa....
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.... the tender documents running from pages 39 to 145 in the paper book filed with the tribunal. We have observed that the tender was floated by the assessee for marine geotechnical investigation for rock excavation in Mithi river approach channel (2.14 Km) situated at sea side of Mahim causeway . M/s DBM Geotechnics Construction Pvt. Ltd. was the successful bidder in the tender. We have observed that the tender was not floated for excavation of rocks in Mithi river rather the tender was for marine geotechnical investigation for rock excavation in Mithi river and the work was mainly towards rendering of technical services involving marine geotechnical investigation for rock excavation which were technical in nature which are covered u/s 194J of the Act for deduction of tax at source. The authorities below have rightly concluded that these services are technical services which are covered u/s 194J of the Act for deduction of tax at source and not u/s 194C of the Act for deduction of tax at source . We have also gone through the various items of work reflected in tender documents as contained in Chapter VIII(e), schedule - B which are placed on record in paper book /page 139-142 and als....
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....r (iv) twenty thousand rupees, in the case of sum referred to in clause (d) :] [Provided further that an individual or a Hindu undivided family, whose total sales, gross receipts or turnover from the business or profession carried on by him exceed the monetary limits specified under clause (a) or clause (b) of section 44AB during the financial year immediately preceding the financial year in which such sum by way of fees for professional services or technical services is credited or paid, shall be liable to deduct income-tax under this section :] [Provided also that no individual or a Hindu undivided family referred to in the second proviso shall be liable to deduct income-tax on the sum by way of fees for professional services in case such sum is credited or paid exclusively for personal purposes of such individual or any member of Hindu undivided family.] (2) [***] (3) [***] Explanation.-For the purposes of this section,- (a) "professional services" means services rendered by a person in the course of carrying on legal, medical, engineering or architectural profession or the profession of accountancy or technical consultancy or interior decoration or advertising or suc....
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....nue . This contention of the assessee needs verification by the authorities below and we are inclined to set aside this issue to the file of the AO for verification and if the contention of the assesee are found to be correct, the AO shall grant relief keeping in view ratio of decision of Hon'ble Supreme Court in the case of Hindustan Coca-Cola Beverages Private Limited (supra) 293 ITR 226(SC). The assessee is directed to appear before the AO and file necessary evidences to support its contentions, as per our above direction . Needless to say that proper and adequate opportunity of being heard shall be provided by the AO in accordance with principles of natural justice in accordance with law. This appeal is partly allowed for statistical purposes.We order accordingly. Now, we shall take up assessee's appeal in ITA No. 6030/Mum/2014 for assessment year 2011-12. 9. The assessee has raised the following grounds of appeal in memo of appeal filed with the tribunal:- "1. The learned CIT (Appeals) erred in holding that contract to M/s. DBM Geotechnics Construction Pvt. Ltd. has not been given for simple rock excavation work but is given for Marine Geo Technical Investigation for rock ....
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....l. 12. The ld. Counsel for the assessee has produced additional evidences before the tribunal with the request for admission of the additional evidences vide paper book page 221-516 . The learned counsel submitted that these additional evidences goes to the root of the matter as inadvertently the assessee has submitted the wrong tender documents before the authorities below for which the work was undertaken by M/s DBM Geotechnics Construction Pvt. Ltd. The correct tender documents are for the construction of retaining wall along the bank of Mithi river from channel 3500.0m to channel 5883.0m towards LBS Marg including Service road and construction of retaining wall along the bank of Mithi river from channel 2600.0m to channel 5883.0m towards BKC side including service road for which total payment of Rs. 32,47,68,465/- was made by the assessee during the assessment year 2011-12 and since the order framed by the A.O. and confirmed by the ld. CIT (A) was on the evaluation of the wrong tender document viz. tender for marine geotechnical investigation for rock excavation in Mithi river approach channel (2.14 Km) situated at sea side of Mahim causeway submitted by the assessee inadverte....
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....to channel 5883.0m towards BKC side including service road and not towards the earlier tender i.e. marine geotechnical investigation for rock excavation in Mithi river approach channel (2.14 Km) situated at sea side of Mahim causeway which was stated to be completed in the previous year relevant to the assessment year 2008-09. These new tenders are now placed as additional evidences before the tribunal (page 221-516/pb) which in our considered view goes to the root of matter and in the interest of substantial justice these additional evidences need to be admitted as we have also observed that the authorities below erred in passing the orders by relying on the earlier tender viz. tender for marine geotechnical investigation for rock excavation in Mithi river approach channel (2.14 Km) situated at sea side of Mahim causeway which was a small order stated to be completed in the previous year relevant to the assessment year 2008-09. However, these additional evidences placed in paper book page 221-516 needs verification by the A.O. and accordingly we set aside this matter to the file of the A.O. for redetermination of the issue on merits after evaluation of the tender documents and co-....
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....racts (AMC). Accordingly, the demands of tax u/s 201(1) and of interest u/s 201(1A) raised by the A.O. in respect of the A.Ys under consideration are deleted." 17. Aggrieved by the appellate orders dated 21.07.2014 passed by the ld. CIT(A), the Revenue has filed appeal before the tribunal. 18. At the outset, both the parties fairly conceded that this issue is squarely covered in favour of the assessee by the decision of the tribunal in assessee's own case in ITA No. 496 to 502/Mum/2013 for the assessment years 2008-09 and 2009-10 vide orders dated 10-04-2015 wherein the tribunal has held as under:- "The second issue relate to A. Yrs 2008-09 and 2009-10 wherein the AO has applied the provisions of Sec. 194J whereas the assessee has deducted tax u/s. 194C of the Act. We find that the payments have been made by the assessee only in respect of annual maintenance contract which relates to minor repairs, replacement of some spare parts, oiling and greasing of the machineries. In our understanding of the fact, these services do not require any technical expertise and therefore cannot be categorized under the head "technical services". We, therefore, decline to interfere with the findin....