AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2017 (8) TMI 1458
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....ution Company Limited, a public sector undertaking. It is involved in distribution of electricity throughout the State of West Bengal, barring the metropolis of Kolkata and certain other urban pockets. Three Assessment years, 2006-07, 2007-08 and 2008-09 are involved in this appeal in which the assessee sought deduction in respect of wheeling charges, power factor rebate, unscheduled interchanging charges, transmission charges, power interruption charges and certain other charges paid to Regional Load Despatch Centre. Claims for deduction were disallowed under these heads primarily on the ground that these charges constituted payments to contractors and entailed tax deduction at source under Section 194C of the Income Tax Act, 1961. This stand of the Revenue authorities is reflected in the assessment orders of 2008-09 and 2007-08. We find from the assessment order for 2006-07, however, the Revenue treated such charges as fees for technical service and applied the provisions of Section 194J of the 1961 Act, which also postulates tax deduction at source. The second count on which the Assessing Officer disallowed deduction claims was on account of payment of license fee to the West Be....
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....ee. The transmission charges simply constitute a fee for availing of the transmission utility to be used by open asset concept for distribution of electricity, licensees and consumers. In our view, the wheeling charges and transmission charges are neither contractual payments nor fee for technical services u/s.194C or 194J of the Act as contended by revenue because there is no human intervention or human interface and, therefore, this cannot be contractual payments or fee for technical services. Therefore, we are of the view that there is nothing on record to support the contentions of the revenue that the wheeling charges and transmission charges assumed the character of contractual payments and fee for technical services as noted by AO. This view of ours is supported by the decision of Hon'ble Bombay High Court in the case of CIT Vs. Maharastra State Electricity Distribution Co. Ltd. (2015) 375 ITR 23(Bom). We find that this issue is squarely covered by this decision in favour of assessee. Therefore, on these two payments, in view of our reasoning, we confirm the order of CIT(A). This common issue of revenue's appeals is dismissed." (Quoted verbatim). 4. On power factor rebate a....
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.... bills. This cannot be subject matter of TDS under any of the provisions of the Act whether Sec.194C or 194J of the Act. Accordingly, CIT(A) has rightly deleted the disallowance made by AO by invoking the provisions of section 40(a)(ia) of the Act. We confirm the order of CIT(A) and this common issue of revenue's appeals is dismissed." (Quoted verbatim). 5. The Tribunal also repelled the Revenue's submissions as regards nature and character of unscheduled interchange charge and various payments made to the Regional Load Despatch Centre, inter-alia holding:- "7. In respect to items no.3 i.e. Unscheduled Interchange (UI). We find that the tariffs for power purchased from different Central Sector Power Stations are determined by the Central Electricity Regulatory Commission(CERC). Availability based Tariff (ABT) has been introduced with effect from 01.04.2003 in Eastern Region for purchase of power from Central Sector Power Station. In the availability Based Tariff (ABT) there are three parts.(i) Capacity charge (ii) Energy charge(iii) Un Scheduled Interchange(UI) charge. In view of the above, we find that the UI charges do not fall within the purview of fee for technical services ....
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....ies and obligations of RVPN vis-àvis the applicant, it is not possible to accept the argument that for maintaining proper and regular transmission of electrical energy, no rendering of technical services is involved. It is not a mere case of RVPN maintaining its system with the help of its professional and technical personnel. It is also a case of such personnel ensuring regular and consistent transmission of electrical energy at the grid voltage at the distribution point of the applicant. The fact that the contract between the parties is backed by the statutory obligation of either or both of them, cannot alter the nature of the services rendered. The argument on behalf of the applicant that in ensuring due and proper transmission of electrical energy from the generation point to the distribution point of the applicant, the services of technical personnel are not needed cannot be accepted. Section 194J of the Act has only indicated that for the purpose of that section, fees for technical services would be as defined in section 9(1)(vii) of the Act. On considering that definition and what is involved in the proper transmission of the electrical energy as involved in this c....
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....sion net work belonging to the KPTCL in accordance with the provisions of the Electricity Act subject to payment of charges applicable and determined by KERC. The KPTCL was willing to provide its transmission network for the purpose of carrying electricity to its users subject to payment of transmission and other charges as determined by KERC. There is neither an offer nor an acceptance of any 'technical service' inter se between the parties, Admittedly, KPTCL is a State owned Company and the only power transmitting agency. It has installed and developed its own infrastructure. The assessee is also a State owned electricity distribution company. The only service which the assessee has availed from the KPTCL is 'transmission of power' on payment of charges fixed by KERC. No material is placed by the Revenue before this court to substantiate its contention that the assessee had availed of any technical services. In our considered view, the assessee has done nothing more than transmitting certain quantum of power from one place to the other for a price fixed by KERC. The assessee was oblivious to the technical expertise which the KPTCL may possess. There was neither transfer of any te....