DCIT (TDS 2(1), MUMBAI v. KODAK INDIA P.TLD, MUMBAI

ITA 4812/MUM/2013 | 2007-2008
Pronouncement Date: 01-11-2019 | Result: Partly Allowed

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Appeal Details

RSA Number 481219914 RSA 2013
Assessee PAN AAACK2172J
Bench Mumbai
Appeal Number ITA 4812/MUM/2013
Duration Of Justice 6 year(s) 4 month(s) 10 day(s)
Appellant DCIT (TDS 2(1), MUMBAI
Respondent KODAK INDIA P.TLD, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 01-11-2019
Appeal Filed By Department
Order Result Partly Allowed
Bench Allotted A
Tribunal Order Date 01-11-2019
Date Of Final Hearing 06-04-2015
Next Hearing Date 06-04-2015
First Hearing Date 06-04-2015
Assessment Year 2007-2008
Appeal Filed On 21-06-2013
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL H BENCH MUMBAI BEFORE SHRI SHAMIM YAHYA ACCOUNTANT MEMBER & SHRI PAWAN SINGH JUDICIAL MEMBER ./ I.T.A. NO.4812 & 4813/MUM/2013 ( / ASSESSMENT YEAR: 2007-08 ( / ASSESSMENT YEAR: 2008-09 DCIT (TDS) 2(1) R. NO. 702 7 TH FLOOR SMT K.G. MITTAL AYURVEDIC HOSPITAL BLDG CHARNI RD MUMBAI / VS. KODAK INDIA P. LTD. 3RD FLOOR KALPATRU SYNERGY VAKOLA SANTACRUZ (E) MUMBAI ./ ./ PAN/GIR NO. : AAACK2172J ( / APPELLANT ) .. ( / RESPONDENT ) ./ I.T.A. NO. 5065 & 5066/MUM/2013 ( / ASSESSMENT YEAR: 200708 ( / ASSESSMENT YEAR: 200809 KODAK INDIA P. LTD. C/O. KALYANIWALLA & MISTRY ARMY & NAVY BLDG 3 RD FLOOR 148 M.G. RD FORT MUMBAI 400 001 / VS. DCIT (TDS) 2(1) R. NO. 702 7 TH FLOOR SMT K.G. MITTAL AYURVEDIC HOSPITAL BLDG CHARNI RD MUMBAI 400 002 ./ ./ PAN/GIR NO. : AAACK2172J ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : S/SH. P.J. PARDIWALA & HARMUZD JAMSHEDJI AR / RESPONDENT BY : SH. MANOJ KUMAR SINGH DR / DATE OF HEARING 05/08/2019 !'# / DATE OF PRONOUNCEMENT 01 /11 /2019 - 2 - / O R D E R PER SHRI SHAMIM YAHYA- AM: THESE ARE CROSS APPEALS BY THE REVENUE AS WELL AS ASSESSEE ARISING OUT OF LEARNED COMMISSIONER OF INC OME TAX (APPEALS) ORDER FOR ASSESSMENT YEARS 2007-08 AND 20 08-09 RESPECTIVELY. 2. SINCE THE ISSUES ARE COMMON AND CONNECTED AND TH E APPEALS WERE HEARD TO THAT THESE ARE BEING CONSOLID ATED AND DISPOSED OF BY THIS COMMON ORDER. 3. ONE COMMON ISSUE RAISED IN ASSESSEES APPEALS RE LATE TO THE ORDER OF THE AUTHORITIES BELOW THAT THE PAYMENT MADE TO MATRIX INDIA ON BEHALF OF MS. R.K. KAIF REQUIRED WI THHOLDING UNDER SECTION 194J. 4. UPON HEARING BOTH THE COUNSEL AND PERUSING THE R ECORDS IT TRANSPIRES THAT THIS ISSUE STANDS COVERED IN FAV OUR OF THE ASSESSEE BY THE DECISION OF THIS TRIBUNAL IN ASSESS EES OWN CASE FOR ASSESSMENT YEAR 200910 ITA NO. 9080/M/2010 VI DE ORDER DATED 20/2/2013. THE TRIBUNAL BY AN ELABORATE ORDER HAS CONCLUDED THAT THE TDS OFFICER WAS INCORRECT IN HOL DING THAT TAX WAS REQUIRED TO BE DEDUCTED AT 11.33%. THE TRIBUNAL CONCLUDED THAT THE IMPUGNED PAYMENTS MADE BY THE AS SESSEE TO MATRIX INDIA ON BEHALF OF MS. KATARINA KAIF DO N OT ATTRACT THE PROVISIONS OF SECTION 19 4J. ACCORDINGLY THE GROUND RAISED WAS - 3 - ALLOWED. WE MAY REFER TO THE CONCLUDING PORTION IN THE SAID ORDER AS UNDER:- 18. IN THE LIGHT OF THE ABOVE LEGAL SCOPE WE NEED TO EXAMINE IF THE SERVICES THE MODELING RENDERED BY MS. KATRINA KAIF IN THIS CASE CONSTITUTES PROFESSIONAL SERVICE AND THE FEE PAID TO HER FOR MODELING WITH THE PURPO SE OF MARKETING OF THE CAMERA PRODUCTS OF THE ASSESSEE CONSTITUTES FPS NOTWITHSTANDING THE (ACT THAT SHE IS OTHERWISE AN ACTOR ENGAGED IN THE PRODUCTION OF A CINEMATOGRAPHIC FILM. THE ANSWER FOR THIS ENQUIRY I S FOUND PARTLY FROM THE DECISION OF THIS TRIBUNAL GIVEN IN THE CASE OF EMS (SUPRA) UNDISPUTEDLY MS. KATRINA KAIF HAS REC EIVED THE SAID FEE NOT IN CONNECTION WITH PRODUCTION OF A CINEMATOGRAPHIC FILM AND THE SAME RECEIVED ADMITTED LY FOR MODELING. SHE HAS NOT RECEIVED THE SUM FOR ACTING IN A AUTOGRAPHIC FILM. RECEIPTS FOR ALL MODELING AND ACT ING SKILLS OF AN INDIVIDUAL DO NOT ATTRACT THE SAID SECTION 19 4-J UNLESS THEY ARE PART OF THE PRODUCTION OF A CINEMA TOGRAPHIC FILM. IT IS THE CASE OF REVENUE THAT MODELING IS AL SO 'ACTING' AND MS. KATRINA KAIF IS AN ACTOR AND THEREFORE COVE RED BY THE SAID RULE. BUT THE FACTS IS THAT ALL ACTORS ARE NOT COVERED BY THE SAID RULE AND AROSE ACTORS WHO SERVICES IN PRODUCTION OF A CINEMATOGRAPHIC FILM ALONG ARE ONLY COVERED. 19. IN THIS REGARD WE HAVE EXAMINED THE MEANING OF MODELING AND FT HAS MULTIPLE MEANING AND ONE NEARER TO THE ONE UNDER CONSIDERATION READS AS PER WWW.FREEDICTIONARV.COM 'A PERSON EMPLOYED TO DISPLA Y ITS MERCHANDISE SUCH OR COSMETICS.' IN THIS CASE MS K ATRINA KAIF IS EMPLOYED BY THE ASSESSEE TO DISPLAY ITS MERCHANDISE SUCH AS CAMERA. IN THE ORIGINAL SENSE O F THE MODELING THE SAME MAY BE A PROFESSION AND THE RECE IPTS EARNED BY SUCH MODELS MAY BE PROFESSIONAL RECEIPTS. BUT THE FACT IS THAT MODELING IS NOT A DEFINED OR NOTIF IED PROFESSION EITHER IN THE INCOME TAX ACT 1961 OR IN THE NOTIFICATIONS IN FACT THERE ARE MANY SUCH UNNOTIF IED PROFESSIONS AND SUCH ONES CANNOT BE BROUGHT UNDER T HE PROVISIONS OF SECTION 194J OF THE ACT. IN THE INSTA NT ADMITTEDLY THE SERVICES RENDERED HAVE NOTHING TO D O WITH THE PRODUCTION OF A CINEMATOGRAPHIC FILM. FURTHER BEFORE PARTING WITH THE ORDER IT IS PERTINENT TO MENTION THAT A - 4 - PERSON CAN HAVE MANY SKILLS I.E ACTING SKILLS IN FI LMS MODELING SKILLS FOR DISPLAY OF MERCHANDISE SINGING SKILLS ETC. AND SUCH PERSON CAN MAKE EARNING OUT OF SUCH S KILLS. IT IS NOT THAT TOTAL EARNING OF THAT PERSON IN LIEU OF SERVICES RENDERED MUST ATTRACT THE PROVISIONS OF SECTION 194 J OF THE ACT. THE EXPRESSIONS SERVICES RENDERED USED IN TH E SAID EXPLANATION ASSUME SIGNIFICANCE AND THEREFORE THE TAXABLE RECEIPTS U/S 1943 OF THE ACT ARE SERVICES-SPECIFIC AND NOT PERSON SPECIFIC. IN THE INSTANT CASE THE PAYMENTS ARE PAYABLE FOR THE 'SERVICES OF' MODELING .AND IT IS U NCONNECTED .WITH THE PRODUCTION OF CINEMATOGRAPHIC FILM. WHILE 'MODELING' IS AIMED AT DISPLAY OF MERCHANDISE THE 'ACTING' IS DEFINED AS TO ACT IN PLAY OR FILM WWW.FREEDICTION ATY.COM) I.E. TO PORTRAY A ROLE AUTHORED BY A STORY-WRITER W ITH DIFFERENT PURPOSES AND OBJECTS AND CERTAINLY NOT TO DISPLACE THE MERCHANDIZE TO BOOST THE SALES OF A MANUFACTURE R OR A TRADER OF THE PRODUCT OR SERVICES. THEREFORE THE I MPUGNED PAYMENTS MADE BY THE ASSESSEE TO MATRIX INDIA ON BE HALF OF MS KATRINA KAIF DO NOT ATTRACT THE PROVISIONS OF SECTION 194J OF THE ACT. ACCORDINGLY THE GROUNDS RAISED AR E ALLOWED. RESPECTFULLY FOLLOWING THE AFORESAID DECISION WE D ECIDE THIS ISSUE IN FAVOUR OF THE ASSESSEE. 5. ONE COMMON ISSUE RAISED IN REVENUES APPEAL IS T HAT LEARNED CIT(A) ERRED IN GIVING RELIEF TO THE ASSESS EE BY HOLDING THAT TDS IS NOT DEDUCTIBLE FROM PAYMENTS MADE TO CU STOM HOUSE AGENTS ON ACCOUNT OF REIMBURSEMENT OF CLEARI NG AND FORWARDING. 6. BRIEF FACTS OF THE CASE ARE THAT DURING THE PREV IOUS YEARS RELEVANT TO ASSESSMENT YEARS UNDER CONSIDERATION T HE APPELLANT HAD MADE PAYMENTS TO CUSTOM HOUSE AGENTS (CHAS). THE APPELLANT IS MAKING TWO TYPES OF PAYMENTS TO CH AS I.E. I) CLEARING CHARGES AND II) REIMBURSEMENT OF THE EXPEN DITURE - 5 - INCURRED BY CHAS ON BEHALF OF THE APPELLANT ON ACCO UNT OF TRANSPORTATION CHARGES. CRANE/FORKLIFT HIRE CHARGES STAMP DUTY/ADMIN CHARGES. FREIGHT CHARGES AND HANDLING/ST ORAGE CHARGES. THE APPELLANT HAD DEDUCTED TAX AT SOURCE U NDER SECTION 194H OF THE ACT IN RESPECT OF PAYMENTS TO C HAS TOWARDS CLEARING CHARGES TREATING THE SAME TO BE IN THE NAT URE OF COMMISSION. HOWEVER THE APPELLANT DID NOT DEDUCT A NY TAX AT SOURCE IN RESPECT OF REIMBURSEMENT OF EXPENDITURE I NCURRED BY THE CHAS ON BEHALF OF THE APPELLANT. THE AO HELD TH AT THE APPELLANT SHOULD HAVE DEDUCTED TAX UNDER SECTION 19 4C IN RESPECT OF REIMBURSEMENT OF EXPENDITURE AS WELL. FU RTHERMORE IN ASSESSMENT YEAR 2008-09 THE AO NOTED THAT THE T AX DEDUCTED IN RESPECT OF CLEARING CHARGES WAS ALSO SH ORT. THEREFORE THE AO THE APPELLANT TO BE AN ASSESSEE I N DEFAULT AND COMPUTED SHORT DEDUCTION OF TAX AND INTEREST AS UNDER:- SHORT DEDUCTION IN RESPECT OF CLEARING CHARGES LIABILITY OF DEDUCTION IN RESPECT OF REIMBURSEM ENTS TO CHAS INTEREST UNDER SECTION 201(1A) TOTAL AY 2007-08 36 22 548 61 02 000 57 37 483 1 54 62 031 AY 2007-08 ---- 29 03 255 13 64 530 42 67 785 7. UPON ASSESSEES APPEAL LEARNED CIT(A) REFERRED TO THE ORDER OF LEARNED CIT A IN EARLIER YEAR AND HELD AS UNDER:- 6.4 ''FROM THE ABOVE IT CAN BE SEEN THAT MY LD. P REDECESSOR HAS HELD THAT NO DEDUCTION OF TAX AT SOURCE IS REQU IRED IN RESPECT OF REIMBURSEMENT OF EXPENDITURE TO CHAS. I AGREE WI TH THE SAME AND DEMAND OF TAX OF RS.61 Q2 OGGA- (IN AY 2007-08 ) AND - 6 - RS.2S 03 2 55/- (IN AY 2008-09) ALONG WITH THE CORR ESPONDING INTEREST UNDER SECTION 2Q1(1A) IS HEREBY DELETED. 6.5 THE AO HAS ALSO RAISED DEMAND OF TAX AND INTERE ST IN RESPECT OF CLEARING CHARGES PAID BY THE APPELLANT O N ACCOUNT OF SHORT DEDUCTION IN AY 2007-08. SUCH DEMAND HAS BEEN RAISED BY THE AO BY APPLYING THE PROVISIONS OF SECTION 19 4C OF THE ACT. THE APPELLANT HAS SUBMITTED A CHART AS ABOVE CLARIF YING THE FIGURES OF TAX DEDUCTION AT SOURCE IN THIS REGARD A ND HAS CLAIMED THAT THE AO HAS NOT TAKEN THE CORRECT FIGURES. HOWE VER IT IS SEEN THAT THERE ARE FOUR PARTIES WHO HAVE WORKED AS CHAS OF THE APPELLANT AND IN AY 2008-09 THE APPELLANT HAS DEDU CTED TAX AT SOURCE AT A UNIFORM RATE OF 5.66% UNDER THE PROVISI ONS OF SECTION 194H. HOWEVER IN AY 2007-08 THE TAX HAS BEEN DEDU CTED IN RESPECT OF THE FIRST TWO PARTIES UNDER SECTION 194H WHEREAS THE LAX HAS BEEN DEDUCTED UNDER SECTION 194C OF THE ACT IN RESPECT OF THE LATER TWO PARTIES THIS ASPECT HAS NOT BEEN E XPLAINED BY THE APPELLANT AS TO WHY IN RESPECT OF THE LATER TWO PARTIES I.E. DHL EXPRESS (I) PVT. LTD AND INTERNATIONAL CLEARING & SHIPPING TWO DIFFERENT SECTIONS AND TWO DIFFERENT RATES HAVE BEEN APPLIED FOR TAX DEDUCTION AT SOURCE IN AY 2007-08 AND AY 20 0809. THEREFORE NO FURTHER RELIEF CAN BE GRANTED TO THE A PPELLANT AT THIS STAGE : HOWEVER THE AO SHALL BE FREE TO LOOK INTO THIS AS PECT AND RE-COMPUTE THE DEMAND OF TAX AND INTEREST IF ANY I N VIEW OF THE DECISION OF MY LD. PREDECESSOR IN AY 2009-10. AGAINST THIS ORDER REVENUE IS IN APPEAL BEFORE US. 8. ASSESSEE FOR AY 07-08 HAS RAISED A CROSS APPEAL ON THIS ISSUE THAT LD CIT (A) SHOULD HAVE DELETED THE ENTIR E DISALLOWANCE. 9. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. WE FIND THAT ITAT ASSESSEES OWN CASE IN ITA NO. 56 8 FOR ASSESSMENT YEAR 2009 10 VIDE ORDER DATED 21/1/15 HAS DEALT WITH THE ISSUE AS UNDER: - 7 - 24. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WE LL AS RELEVANT MATERIAL ON RECORD. THERE IS NO DISPUTE TH AT THE ASSESSEE PAID THIS AMOUNT TO THE AGENT FOR MAKING T HE PAYMENT TO THIRD PARTIES FOR VARIOUS SERVICES AVAIL ED BY THE ASSESSEE. IT IS ALSO NOT DISPUTED THAT IF THE PAYME NT IS DIRECTLY MADE BY THE ASSESSEE TO THE THIRD PARTY IN RESPECT OF THE SERVICES PROVIDED TO THE ASSESSEE THE SAME ATTRACTS THE TDS UNDER THE PROVISIONS OF CHAPTER XVII OF THE INCOME TAX ACT. T HE ASSESSING OFFICER HAS RECORDED THAT THE PAYMENT WAS MADE IN R ESPECT OF TRANSPORTATION CHARGES CRANE HIRING CHARGES ADMIN ISTRATION CHARGES HANDLING CHARGES TO THE AIRPORT AUTHORITY OF INDIA ETC. THE ASSESSING OFFICER HAS ALSO OBSERVED THAT EACH O F THESE INDIVIDUAL PAYMENTS ATTRACTS THE TDS UNDER THE DIFF ERENT PROVISIONS OF CHAPTER XVII. THEREFORE IT IS PERTIN ENT TO NOTE THAT THE AGENT HAS MADE THE PAYMENT TO THE THIRD PARTY F OR AND ON BEHALF OF THE ASSESSEE THEREFORE IT MAKES NO DIFF ERENCE IF THE PAYMENT IS DIRECTLY MADE BY THE ASSESSEE TO THE THI RD PARTY OR IT IS MADE THROUGH THE 'WENT OF THE ASSESSEE IF THE PA YMENT OTHERWISE ATTRACTS THE TDS AS PER PROVISIONS OF CHA PTER XVII OF INCOME TAX ACT. IT IS NOT THE REIMBURSEMENT OF COST OF COST OF AGENT FOR RENDERING SERVICES TO THE ASSESSEE BUT IT IS THE PAYMENT MADE TO THE THIRD PARTY THROUGH THE AGENT FOR THE S ERVICES PROVIDED BY THE THIRD PARTY TO THE ASSESSEE. ONCE T HE PAYMENT IS MADE THROUGH THE AGENT TO THE THIRD PARTY AGAINST T HE SERVICES PROVIDED BY THE THIRD PARTY THE ASSESSEE IS LIABLE TO DEDUCT TAX ON SUCH PAYMENT OR TO ENSURE THE TDS THROUGH THE AG ENT. THERE IS NO DENIAL OF THE FACT THAT THESE PAYMENTS WERE N OT SUBJECTED TO TDS EITHER BY THE ASSESSEE OR BY THE AGENT. FAILURE TO DEDUCT TAX FOR SUCH PAYMENT AT ANY STAGE EITHER BY DIE AGENT O R BY THE ASSESSEE WOULD ATTRACT THE PROVISIONS OF SECTION 20 1(L) AND 201(1A). IF THIS MODUS OPERANDI IS ALLOWED THEN IN EACH AND EVERY PAYMENT WHICH OTHERWISE ATTRACTS THE TDS CAN BE GIV EN A COLOUR OF REIMBURSEMENT OF MAKING THE PAYMENT THROUGH INTE RMEDIATORY AND CONSEQUENTLY CIRCUMVENT THE PROVISIONS OF TDS. THE REAL FACT IS THAT THE PAYMENT IS MADE FOR AND ON BEHALF OF TH E ASSESSEE BY THE AGENT AND THEREFORE THE SAME WOULD HE CONSIDE RED AS PAYMENT MADE BY THE ASSESSEE TO THE THIRD PARTY FOR THE PURPOSE OF TDS PROVISIONS UNDER CHAPTER XVII OF THE ACT. THE DECISION RELIED UPON BY THE LD. AUTHORISED REPRESEN TATIVE IN CASE OF CIT V/S SIEMENS AKTIONGESELLSCHAFT (SUPR A) AS WELL AS S.S. & CO. OCTROI CONTRACTORS VS. STATE OF PUNJAB & ORS. (SUPRA) DO NOT APPLY TO THE FACTS OF THE PRESE NT CASE WHEN IT IS NOT A REAL REIMBURSEMENT OF THE EXPENSES TO THE - 8 - AGENT BUT IS A PAYMENT TO THE THIRD PARTY THROUGH T HE AGENT. ACCORDINGLY IN VIEW OF THE ABOVE DISCUSSION AND FAC TS AND CIRCUMSTANCES OF THE CASE WE SET ASIDE THE ORDER O F CIT(A) AND RESTORE THE ORDER OF ASSESSING OFFICER ON THIS ISSUE. 10. IN THIS REGARD IT IS THE SUBMISSION OF THE LEAR NED COUNSEL OF THE ASSESSEE THAT THE SAID ORDER IS ERRONEOUS. W ITHOUT PREJUDICE IT HAS BEEN CONTENDED THAT ASSESSEE CANNO T BE CONSIDERED TO BE IN DEFAULT WITH REGARD TO THOSE CL EARING HOUSE AGENTS WHO ARE ASSESSEES ON RECORD AND HAVE FILED RETURN OF INCOME UNDER SECTION 139 AND WHO HAVE TAKEN INTO AC COUNT THE SUM PAID BY KODAK AND HAVE ALSO PAID THE TAX ON THE INCOME DECLARED BY IT. IT HAS BEEN SUBMITTED THAT THE PROV ISO BELOW SECTION 201 (1) INSERTED AS AN AMENDMENT BY THE FIN ANCE ACT 2012 WITH EFFECT FROM 1 ST JULY 2 012 IS RETROSPECTIVE IN NATURE. RELIANCE IN THIS REGARD IS PLACED ON ACIT V/S BHAR TI AIRTEL 42 ITR TRIB 469 MAHINDRA NAVISTAR AUTOMATICS LTD V/S DCIT 159 ITD 123 GUJARAT PIPAVAV PORT LTD VERSUS DCIT 149 I TD 23. IT HAS BEEN SUBMITTED THAT THIS ISSUE WAS NOT BEFORE I TAT IN ASSESSMENT YEAR 200910. HENCE IT IS CLAIMED THAT T O THIS EXTENT ITATS EARLIER ORDER CANNOT BE SAID TO HAVE C OVERED THIS ISSUE UPON CAREFUL CONSIDERATION WE FIND THAT THE AFORESAID CO ORDINATE BENCH ORDER IN ASSESSEES OWN CASE ON THE SAME ISSUE ON SIMILAR FACTS HAS TO BE FOLLOWED ON THE DOCTRINE OF STARE DECISIS. HOWEVER THE WITHOUT PREJUDICE SUBMISSION OF THE ASSESSEE IS COGENT. HOWEVER THIS ASPECT REQUIRES FA CTUAL VERIFICATION. ACCORDINGLY WE DIRECT THE ASSESSING O FFICER TO - 9 - EXAMINE THIS ASPECT OF THE ASSESSEE SUBMISSION AND DECIDE AS PER LAW AFTER FACTUAL VERIFICATION. 10. ONE COMMON ISSUE RAISED IN REVENUES APPEAL IS THAT LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ER RED IN GIVING RELIEF TO THE ASSESSEE BY HOLDING THAT TDS I S NOT DEDUCTIBLE ON SUPPLY OF CAMERAS MANUFACTURED BY HIC AL MAGNETIC PRIVATE LIMITED BY TREATING THE SAME AS CO NTRACT FOR SALE WITHOUT PROPERLY APPRECIATING THE FACTUAL AND LEGAL MATRIX OF THE CASE AS CLEARLY BROUGHT OUT BY THE ASSESSING OFFICER TREATING THE SAME AS WORKS CONTRACT. 11. IT TRANSPIRES THAT THIS ISSUE IS COVERED AGAINS T THE ASSESSEE BY THE DECISION OF ITAT IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 200910 IN ITA NO. 568/M/2011 WHERE IN THE TRIBUNAL HAS DECIDED THE ISSUE AGAINST THE ASSESSEE . THE TRIBUNAL IN THE SAID ORDER HAD ELABORATELY DEALT WI TH THE ISSUE AND HAS CONCLUDED THAT ORDER OF LEARNED COMMISSIONE R OF INCOME TAX (APPEALS) ON THAT ISSUE WAS SET ASIDE AN D THE ORDER OF THE ASSESSING OFFICER WAS RESTORED. WE MAY REFER TO THE SAID ORDER AS UNDER:- 18. THE RECITAL OF THE TRIPARTITE AGREEMENT READS AS UNDER:- A) KODAK HAS SUPPLIED CERTAIN TOOLS & MOULDS MORE PARTICULARLY DESCRIBED IN ANNEXURE A HERETO (HEREIN AFTER QUIPMENTS) TO THE SUPPLIER FOR CARRYING OUT JOB W ORK FOR CAMERA AS PER THE REQUIREMENTS OF THE KODAK. - 10 - B) KODAK AND HICAL HAVE ENTERED INTO AN AGREEMENT WHEREBY HICAL WILL SUPPLY TO KODAK KB-10 CAMERAS AS PER THE SPECIFICATIONS OF KODAK. C) HICAL HAS UNDERTAKEN TO SUPPLY TO KODAK KB10 CAM ERAS AS PER REQUIREMENTS OF KODAK. D) SUPPLIER HAS AGREED TO USE THE TOOLS AND MOULDS OWNED BY KODAK FOR THE PURPOSE OF SUPPLY OF CAMERA PARTS TO HICAL. 19. THUS AS PER THE ARRANGEMENT BETWEEN THE PARTIE S THE ASSESSEE SUPPLIED TOOL/MOULDS TO THE SUPPLIER FOR C ARRYING OUT JOB WORK FOR CAMERA PARTS AS PER REQUIREMENTS O F THE ASSESSEE. THESE CAMERA PARIS WERE SUPPLIED TO THE H ICAL MAGNETIC PVT. LTD. FOR ASSEMBLING OF CAMERA. IT IS CLEAR THAT THE JOB WORK FOR CAMERA PARTS USED AS A RAW MATERIA L FOR ASSEMBLING OF THE CAMERA BY HICAL MAGNETIC PVT. LTD . IS ARRANGED BY THE ASSESSEE UNDER THE TRIPARTITE AGREE MENT. FURTHER THE ASSESSEE IS PROVIDING THE WORKING CAPIT AL FUND TO THE HICAL MAGNETIC PVT. LTD FOR THE PURPOSE OF ALL COST INCLUDING LABOR AND RAW MATERIAL WHICH IS SUPPLIED UNDER THE TRIPARTITE AGREEMENT. THEREFORE THE NOMENCLATU RE OF THE AGREEMENT BECOMES IRRELEVANT WHEN THE INTENTION OF THE PARTIES PRESENTS A DIFFERENT PICTURE AS PER THE VAR IOUS TERMS AND CONDITIONS OF THE AGREEMENT. THE CJT(A] HAS ASS UMED A WRONG FACT BY RECORDING THE TRIPARTITE AGREEMENT AS - AN AGREEMENT FOR TOOLS AND MOULDS BUT IT WAS ACTU ALLY AN AGREEMENT FOR JOB WORK OF CAMERA PARTS BY SUPPLIER FOR USE OF ASSEMBLING THE CAMERA BY HICAL MAGNETIC PVT. LTD . THEREFORE IT WAS NOT AN AGREEMENT FOR TOOLS AND MO ULDS BUT IS AN AGREEMENT FOR SUPPLY OF CAMERA PARTS BY VARIO US SUPPLIERS TO HICAL MAGNETIC JM. LTD. THE CAMERA PAR TS ARE MANUFACTURED AS PER THE TOOLS AND MOULDS PROVIDED BY THE ASSESSES THUS THE RAW MATERIAL IS SUPPLIED TO THE HICAL MAGNETIC PVT LTD. BY THE ASSESSEE THROUGH THE SUPPL IERS UNDER THE TRIPARTITE AGREEMENT. THE ASSESSEE HAS PR OVIDED THE WORKING CAPITAL TO HICAL MAGNETIC PVT. LTD. FOR PURCHASE OF RAW MATERIAL /CAMERA PARTS FROM SUPPLIERS AND A LSO FOR LABOUR COST. THIS ARRANGEMENT SHOWS THAT THE RAW M ATERIAL IS PROVIDED BY THE ASSESSES TO HICAL MAGNETIC PVT. LTD. THROUGH THESE SUPPLIERS AND THE PAYMENT IS MADE B Y PROVIDING WORKING CAPITAL BY THE ASSESSEE TO HICAL MAGNETIC PVT. LTD WITHOUT ANY CHARGE OF INTEREST. HICAL - 11 - MAGNETIC PVT. LTD. IS DOING ONLY THE ASSEMBLING OF THE CAMERAS AS PER THE SPECIFICATIONS PROVIDED BY THE A SSESSEE BY USING THE RAW MATERIAL PROVIDED UNDER THE TRIPAR TITE AGREEMENT. 20. THIS ARRANGEMENT UNDER THE TWO AGREEMENTS IS NO THING BUT A CONTRACT UNDER WHICH THE ACTIVITY OF HICAL MA GNETIC PVT. LTD. DO NOT HAVE FINANCIAL RISK AND WORKING CA PITAL RISK AS IT WAS ALL PROVIDED BY THE ASSESSEE. EVEN THE PROCUREMENT OF THE RAW MATERIAL IS ALSO ARRANGED BY THE ASSESSEE AS PER THE TRIPARTITE AGREEMENT THUS IT I S NOTHING BUT A JOB WORK CONTRACT UNDER THESE TWO AGREEMENTS. FURTHER THE ASSESSEE IS PAYING THE ENTIRE COST IN A DVANCE BEING WORKING CAPITAL AND COMPENSATION WITH THE MAR GIN ON COST OF RAW MATERIAL AND LABOR AT THE RATE OF RS. 8 .04 PER CAMERA TO HICAL WHICH IS NOTHING HUT THE JOB WORK C HARGES. THE PRICE ARRANGEMENT AS AGREED BETWEEN THE PARTIES CLEARLY SHOWS THAT IT IS A JOB WORK OF ASSEMBLING O F CAMERAS BY HICAL MAGNETIC PVT. LTD THE HICAL MAGNETIC PVT. LTD. IN FACT RECEIVING ONLY THE IABOR CHARGES AND MARK UP OF RS. 8.04 PER CAMERA WHICH IS SUBJECTED TO TDS BEING JOB WORK CHARGES PAID BY ASSESSES. THEREFORE IT IS NOT THE ENTIRE PAYMENT TO THE HICAL MAGNETIC PVT. LTD. BUT ONLY THE LABOR CHARGES OF RS. 20.84 AND MARGIN OF RS. 5.04 TOTAL AMOUNTING TO RS. 20.8H PER CAMERA TOWARDS THE ASSEM BLING JOB IS SUBJECTED TO TDS. ACCORDINGLY WE SET ASIDE THE IMPUGNED ORDER OF CJT[A) ON THIS ISSUE AND RESTORE THE ORDER OF ASSESSING OFFICER TO THE EXTENT OF APPLICA BILITY OF SECTION 194C ONLY ON THE PAYMENT OF RS. 2Q.88 PER C AMERA. THE DECISION RELIED UPON BY THE CIT(A) IN THE CASE OF CJT VS GLENMARK PHARMACCUTICALS (SUPRA) IS NOT RELEVANT ON THE FACTS OF THIS ISSUE WHEN THE ARRANGEMENT IS FOUND T O BE WORK CONTRACT. 12. IN THIS REGARD LEARNED COUNSEL OF THE ASSESSEE HAS VEHEMENTLY ARGUED THAT THE SAID DECISION OF THE ITA T WAS RENDERED ON AN ERRONEOUS RECORDING OF FACTS AND ERR ONEOUS INFERENCES DRAWN FROM SUCH FACTS. - 12 - 13. HOWEVER WE NOTE THAT THE SAID ORDER OF THE ITAT HAS ALREADY BEEN CHALLENGED BY THE ASSESSEE BEFORE THE HONBLE JURISDICTIONAL HIGH COURT. THE JURISDICTIONAL HIGH COURT HAS NOT REVERSED THE SAID DECISION OF THE ITAT. WHEN IT WAS POINTED OUT BY THE BENCH THAT IF THE LEARNED COUNSEL OF THE ASS ESSEE IS URGING US TO TAKE A CONTRARY VIEW THAN THAT EXPRESS ED BY THE ITAT IN ASSESSEES OWN CASE THE MATTER WOULD NEED T O BE REFERRED TO A SPECIAL BENCH THE LEARNED COUNSEL OF THE ASSESSEE SUBMITTED THAT HE WOULD NOT BE REQUESTING FOR A SPE CIAL BENCH REFERENCE. ACCORDINGLY RESPECTFULLY FOLLOWING THE DECISION OF ITAT IN ASSESSEES OWN CASE WE SET ASIDE THE ORDER OF LEARNED COMMISSION OF INCOME TAX APPEALS AND RESTORE THE OR DER OF ASSESSING OFFICER. 14. ANOTHER ISSUE RAISED IN REVENUES APPEAL IS THA T LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN G IVING RELIEF TO THE ASSESSEE BY HOLDING THAT TDS IS NOT DEDUCTIB LE ON SUPPLY OF BATTERIES MANUFACTURED BY POWER CELL BATTERIES I NDIA LTD. BY TREATING THE SAME AS CONTRACT FOR SALE. 15. IT TRANSPIRES THAT THIS ISSUE STANDS COVERED IN FAVOUR OF THE ASSESSEE BY THE AFORESAID TRIBUNAL ORDER FOR AS SESSMENT YEAR 200910 WHEREIN THE TRIBUNAL HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE BY DEALING WITH THE SAME AT PARAGRAPHS 7 AND 8 OF THE SAID ORDER. THE TRIBUNAL AGREED WITH THE LEARNED CIT(A) THAT THE AGREEMENT IN THIS REGARD WAS NOT JO B WORK AGREEMENT BUT IT WAS SIMPLY AN AGREEMENT FOR PURCHA SE OF A SPECIFIC BATTERY WITH THE NAME OF THE ASSESSEE PRIN TED ON THE - 13 - CELL. THE TRIBUNAL HAD FOLLOWED THE DECISION OF HON BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. GL ENMARK PHARMACEUTICALS LTD. 324 ITR 199. RESPECTFULLY FOLL OWING THE PRECEDENT AS ABOVE WE UPHOLD THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IN THIS REGARD AND DECIDE THE ISSUE AGAINST THE REVENUE. 16. IN THE RESULT THESE APPEALS ARE PARTLY ALLOWED . THIS ORDER PRONOUNCED IN OPEN COURT ON 04/11/2019 SD/ SD/ (PAWAN SINGH) ( SHAMIM YAHYA ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI DATED 04/11/2019 SH (ON TOUR) / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. &'( ) / THE CIT(A) 4. ) ( ) / CONCERNED CIT 5. -. //'( '(# & / DR ITAT MUMBAI 6. .34 5 / GUARD FILE. / BY ORDER / //TRUE COPY// / ( ASST. REGISTRAR) $% / ITAT MUMBAI