TaxTMI 
TaxTMI 
2017 (3) TMI 963
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....ng a demand of Rs. 90,598/- being short fall of TDS observing that the appellant is required to deduct tax at source in terms of section 194J of the Act as against tax deducted u/s. 194C of the Act on payments made to Mangal Anand Healthcare Ltd of Rs. 26,88,335. 2) The Learned Commissioner of Income tax (Appeals) -14, Mumbai on the facts and in the circumstances of the case and in law erred in observing that this contracts cannot be the contracts in routine or normal manner but for which technical service has been rendered and provisions of section 194 r.w.s. (1)(vii) of explanation -2 are attracted." 2. Similarly in remaining three appeals, i.e. for AYs 2007-08, 2008-09 and 2009-10 also, the assessee has taken identical grounds for agitating the action of lower authorities in holding that assessee ought to have deducted tax at source u/s 194J and not u/s 194C as has been deducted by the assessee with respect to following payments:- Name of the party Nature of work A.Y. 2006-07 A.Y. 2007-08 A.Y. 2008-09 A.Y. 1009-10 Mangak Anand Health Care Ltd For providing Sonograph X-ray machines owned by them to the hospital owned by the appellant including supply of operating manpow....
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....asrampuria Synthetic Ltd 20 SOT 248 (ITAT, Delhi) Gujarat State Electricity Corporation Ltd vs ITO 82 TTJ 456 (ITAT, Ahmedabad) ITO vs Fino Fintech Foundation (ITAT,Mumbai ITA Nos 595 & 5952/Mum/2014 order dated 22-06-2016 CIT vs M/s Delhi Transco Ltd (Delhi HC) order dated 06-08-2015 4. On the basis of aforesaid judgements, Ld. Counsel vehemently argued that the aforesaid judgements made by the assessee would fall in the definition of 'work' as defined u/s 194C and would not fall within the scope of section 194J. 5. Per contra, Ld. DR vehemently supported the orders of the lower authorities and submitted that the activities performed by the payees were in the nature of technical services rendered by them and would, therefore, attract provisions of section 194J. Thus, assessee ought to have deducted tax u/s 194J. Therefore, requested for confirming the order of Ld. CIT(A). 6. We have gone through the orders passed by the lower authorities and evidences produced before us and also perused the judgements cited by both the parties. We have examined the nature of payments made by the assessee and the activities performed by the payees with the help of work orders issued to them by....
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....Gharpure Engineering & Construction (P) Ltd and Ramky Infrastructure Ltd also, perusal of their bills, work orders and agreements clearly indicate that assessee assigned them contract work on turnkey basis for carrying out variety of jobs of civil construction, etc. None of the jobs carried out by these persons would fall in the scope of section 194J. The activities performed by these parties would clearly fall within the definition of 'work' as stated in section 194C. Our view is supported by the judgement of Hon'ble Punjab & Haryana High Court in the case of PCIT vs Senior Manager, Finance, Bharat Heavy Electricals Ltd (supra), wherein similar agreements and contracts were analysed by the Hon'ble High Court and it was held that such case would fall within the definition of 'work' as envisaged in section 194C and would not fall u/s 194J. Relevant portion of the judgement is reproduced below:- "9. Mr. Putney, learned counsel appearing on behalf of the appellant firstly sought to demonstrate that the contract fal ls within the ambit of section 194J. He further sought to establ ish that the contract does not fal l under Section 194C. It must be noted here that if a contract does not....
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....vices were not engaged per se for the benefit of respondent. They were in fact engaged by the contractor itself for its own benefit for executing the contract as required by the terms and conditions thereof. 11 The Special Conditions of Contract are also relevant. They also enumerate the list of major tools and plants to be provided by the contractor, at its own cost. There is no reference to the contract being or one of providing technical services. There is a detailed reference in clause 40 which again enumerates the equipment that is to be supplied. There is no similar clause in respect of the deployment of technical personnel. There is a similar schedule for the deployment of manpower as the one under the General Conditions of Contract. Clause 46 of the special conditions contains detailed provisions regarding the testing precommissioning commissioning and post commissioning in respect of the equipment to be supplied. Mr. Putney had relied upon clause 46.13 which we will refer to later while dealing with this submissions. 12. The contract read as a whole, therefore, is for the purposes set out in clause I thereof itself, namely, erecting, commissioning testing and trial ope....