ACIT (TDS), Noida v. M/s. Freescale Semiconductor India Pvt. Ltd., New Delhi

ITA 4882/DEL/2012 | misc
Pronouncement Date: 31-07-2013 | Result: Dismissed

Appeal Details

RSA Number 488220114 RSA 2012
Assessee PAN MRTFO0083G
Bench Delhi
Appeal Number ITA 4882/DEL/2012
Duration Of Justice 10 month(s) 17 day(s)
Appellant ACIT (TDS), Noida
Respondent M/s. Freescale Semiconductor India Pvt. Ltd., New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 31-07-2013
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 31-07-2013
Assessment Year misc
Appeal Filed On 13-09-2012
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B NEW DELHI) BEFORE SHRI U B S BEDI JUDICIAL MEMBER AND SHRI T. S. KAPOOR ACCUNTANT MEMBER ITA NOS.4880 4881 & 4882/ DEL/ 2012 (ASSESSMENT YEARS 2008-09 2009-10 & 2010-11) ACIT (TDS) VS. M/S. FREESCALE SEMICONDUCTOR NOIDA INDIA PVT. LTD. 502 5 TH FLOOR GAUTAM BUDH NAGAR OCEAN PLAZA ABDUL FAZAL ROAD BENGALI MARKET NEW DELHI PAN : MRTFO0083G (APPELLANT) (RESPONDENT) ASSESSEE BY: SHRI R R MORYA ADV. REVENUE BY: MRS. Y KAKKAR SR. DR ORDER PER U. B. S. BEDI JUDICIAL MEMBER : THESE THREE APPEALS OF THE REVENUE ARE DIRECTED AG AINST THE SEPARATE ORDERS PASSED BY LD. CIT(A) NOIDA ALL DATED 25.06.2 012 FOR THE ASSESSMENT YEARS 2008-09 2009-10 & 2010-11 WHEREI N THE FOLLOWING IDENTICAL GROUNDS HAVE BEEN RAISED: 1.1 THE CIT(A) HAS ERRED ON FACTS AND IN LAW IN CA NCELING THE ORDER DATED 31.06.2011 PASSED BY THE ACIT (TDS) NOIDA AN D IN DIRECTING THAT PROVISIONS CONTAINED IN SECTION 194C IS APPLIC ABLE ON THE PAYMENT MADE BY M/S. FREE SCALE SEMICONDUCTOR INDIA PVT. LTD. NOIDA FOR HIRING OF BUSES IGNORING THE FACT OF THE CASE THAT THE DEDUCTOR COMPANY IS LIABLE TO DEDUCT THE TAX U/S 19 4-I AT THE RATE OF 10% FOR HIRING OF BUSES IN VIEW OF AMENDMENT MADE U /S 194-I W.E.F. 01.06.2007. 1.2 IN DIRECTING SO LD. CIT(A) HAS FAILED TO APPRE CIATE THE FOLLOWING: I.T.A. NO.4880 4881 &4882/DEL/2012 2 I) SECTION 194-I(A) (INTRODUCED W.E.F. 01.06.2006) IS APPLICABLE AND THE BOARD CIRCULAR NO.558 (DATED 28. 03.1990) IS NOT APPLICABLE AS IT WAS ISSUED PRIOR TO THE INTROD UCTION OF SECTION 194-I. II) SUB CLAUSE (A) OF SECTION 194-I CLEARLY MENTION TEN PERCENT FOR THE USE OF ANY MACHINERY OF PLANT OR EQ UIPMENT AND SECTION 43(3) PROVIDES INCLUSION OF VEHICLE UNDER P LANT. THUS THE A.O. HAS APPLIED THE PROVISIONS OF SECTION 194- I READ WITH SECTION 43(3) OF THE I. T. ACT 1961. 2. AT THE VERY OUTSET LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT SIMILAR ISSUE AROSE BEFORE DELHI BENCH OF THE TRIBUNAL IN T HE CASE OF ACIT VS DELHI PUBLIC SCHOOL WHEREIN ON SIMILAR FACTS AND IDENTIC AL ISSUE THIS BENCH OF THE TRIBUNAL HAD UPHELD THE ORDER OF LD. CIT(A) FOR TH E ASSESSMENT YEARS 2008- 09 AND 2009-10 WHICH IS REPORTED IN (2013)24 ITR ( TRIB.) 531 (DEL.). SINCE THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE TH EREFORE ALL THE THREE APPEALS OF THE REVENUE MAY BE DISMISSED. 3. LD. D.R. COULD NOT CONTROVERT THIS FACTUAL ASPEC T THAT THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BUT SHE RELIED UPON THE GROUNDS RAISED BY THE DEPARTMENT IN ALL THE THREE APPEALS W ITH THE PLEA FOR SETTING ASIDE THE ORDERS OF LD. CIT(A) AND RESTORING THAT O F THE A.O. 4. WE HAVE HEARD BOTH THE SIDES AND CONSIDERED THE MATERIAL ON RECORD AND FIND THAT THE ISSUE RAISED IN THESE APPEALS IS SIMILAR TO THE ISSUE CONSIDERED AND DECIDED BY THIS BENCH IN THE CASE OF ACIT(TDS) VS. DELHI PUBLIC SCHOOL (SUPRA) AND THE HONBLE BENCH WHILE FOLLOWING VARIOUS OTHER DECISIONS ON THE ISSUE HAS DECIDED THIS ISSUE IN F AVOUR OF THE ASSESSEE BY CONCLUDING IN LAST THREE PARAGRAPHS AS UNDER: WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE THRO UGH THE MATERIAL PLACED ON RECORD. WE OBSERVE THAT ISSUE IS SQUARELY COVERED AGAINST THE REVENUE IN VARIOUS CASES DECIDED BY THE HONBLE INCOME-TAX APPELLATE TRI-BUNAL. THE FACTS AND CIRCUMSTANCE OF THE PRESENT CASES ARE SIMILAR TO THE FACTS AND CIRCUMSTANCES OF THE C ASE LAW IN THE CASE I.T.A. NO.4880 4881 &4882/DEL/2012 3 OF LOTUS VALLEY EDU-CATION SOCIETY V. ASST. CIT (TD S) [2012] 13 ITR (TRIB) 61 (DELHI) WHICH WAS DECIDED BY THE DELHI B ENCH IN ITA NOS. 3254 AND 3255 /DEL/2010. IT CONTENTS AT PAGE 66 OF THE SAID ORDER VIDE PARA 6 DEALS THE ISSUE AS UNDER: 'WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSION IN THE LIGHT OF MATERIAL PLACED BEFORE US. A CAREFUL CONSIDERATI ON OF THE ASSESSMENT ORDER WOULD REVEAL THAT THE ASSESSING OF FICER WHILE HOLDING THAT THE ASSESSEE IS LIABLE FOR DEDUCTION O F TAX AT SOURCE UNDER THE PROVISIONS OF SECTION 194-1 OF THE ACT HA S MAINLY RESTED HIS CASE ON THE GROUND THAT IS THE 'RENT' AS DEFINED IN EXPLANATION UNDER SECTION 194-1 AND THE ASSESSEE HA S PAID RENT IN RESPECT OF BUSES UTILISED BY HIM BEING IN THE NA TURE OF PLANT. IN OUR OPINION SIMPLY FOR THE REASON THAT 'RENT' B EING EXPLAINED UNDER EXPLANATION GIVEN UNDER SECTION 194-1 IN RESP ECT OF A PLANT WILL NOT MAKE THE RELEVANT PAYMENTS LIABLE FO R DEDUCTION UNDER SECTION 194-1. THE SUM AND SUBSTANCE OF THE T RANSACTION HAS TO BE SEEN AND IT HAS TO BE DECIDED THAT UNDER WHICH SECTION THE CASE OF THE ASSESSEE WOULD FALL. IF ONE GOES BY THE LOGIC ADOPTED BY THE ASSESSING OFFICER THEN THE SAME WIL L ALSO BE EQUALLY APPLICABLE IN RESPECT OF SECTION 194C WHERE ALSO UNDER EXPLANATION III TO SUB-SECTION (2) OF SECTION 194C THE 'WORK' HAS BEEN DEFINED OR EXPLAINED WHICH ACCORD-ING TO C LAUSE (C) THERETO INCLUDES 'CARRIAGE OF GOODS AND PASSENGERS BY ANY MODE OF TRANSPORTER OTHER THAN BY RAILWAYS'. ACCORD ING TO THE TRANSPORT CONTRACT ENTERED INTO BY THE ASSESSEE TH E ACTIVITY OF THE TRANSPORT CONTRACTOR WILL BE A SIMPLE ACTIVITY OF CARRIAGE OF PASSENGERS BY ANY MODE OF TRANSPORT OTHER THAN BY R AILWAYS. THE OBJECT OF THE ASSESSEE TO ENTERING INTO SUCH AG REEMENT WAS A SIMPLE ACTIVITY OF CAR-RYING ITS STUDENTS AND STA FF FROM THEIR HOMES TO THE SCHOOL AND SIMI-LARLY FROM SCHOOL TO T HEIR HOMES. THE ASSESSEE HAS NO RESPONSIBILITY WHATSOEVER REGAR DING THE BUSES TO BE UTILISED FOR THAT PURPOSE WHICH WAS THE SOLE RESPONSIBILITY OF THE TRANSPORT CONTRACTOR. THE TRA NSPORT CONTRACTOR ONLY WAS LIABLE TO KEEP AND MAINTAIN THE REQUIRED NUMBER OF BUSES FOR SUCH ACTIVITY AT THEIR OWN EXPE NSES WITH THE SPECIFIED STANDARDS. THEREFORE THE SAID CONTRACT I S PURELY IN THE NATURE OF SERVICES RENDERED BY THE TRANSPORT CONTR ACTOR TO THE ASSESSEE. THE ASSESSEE WAS NOT HAVING ANY RESPONSIB ILITY WHATSOEVER REGARDING THE TRANSPORT VEHICLES USED IN SUCH ACTIVITY. AS AGAINST THAT 'RENT' WHICH IS DEFINED IN EXPLANATION TO SECTION 194-1 INTER ALIA IS FOR THE USE OF 'PL ANT' WHICH I.T.A. NO.4880 4881 &4882/DEL/2012 4 ACCORDING TO THE ASSESSING OFFICER INCLUDES BUSES. HERE ACCORDING TO THE FACTS OF THE PRESENT CASE THE ASS ESSEE ITSELF HAS NOT UTILISED THE BUSES BEING PLANTS BUT THEY WERE U SED BY THE TRANSPORT CONTRACTOR FOR FULFILLING THE OBLIGATIONS SET OUT IN THE CONTRACT AGREE-MENT. THEREFORE THE PROVISIONS OF S ECTION 194-1 COULD NOT BE APPLIED TO THE FACTS OF THE PRESENT CA SE AND IT HAS TO BE HELD THAT THE ASSESSEE HAS RIGHTLY DEDUCTED T AX AT SOURCE UNDER THE PROVISIONS OF SECTION 194C OF THE ACT. GR OUND NOS. 2 AND 3 RAISED IN BOTH THE APPEALS ARE ALLOWED.' 6 THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASES BEING SIMILAR THEREFORE FOLLOWING THE ABOVE WE DO NOT SEE ANY I NFERMITY IN THE ORDER OF THE COM-MISSIONER OF INCOME-TAX (APPEALS). HENCE THE APPEALS FILED BY THE REVENUE ARE DISMISSED. 7 THE ORDER PRONOUNCED IN THE OPEN COURT ON MAY 24 2013. 5. SINCE NO DISTINGUISHING FEATURE HAS BEEN POINTED OUT OR NOTED IN THE DECISION RELIED UPON BY THE LD. COUNSEL FOR THE ASS ESSEE AND IN THE CASE IN HAND AND THE ISSUE IS THE SAME IN BOTH THESE CASES THEREFORE WE WHILE FOLLOWING THE EARLIER DECISION OF THIS BENCH OF THE TRIBUNAL IN THE CASE OF ACIT (TDS) VS. DELHI PUBLIC SCHOOL (SUPRA) UPHOLD THE ORDER OF LD. CIT(A) FOR ALL THE THREE ASSESSMENT YEARS AND DISMI SS THE APPEALS OF THE REVENUE. 6. AS A RESULT ALL THE THREE APPEALS OF THE REVENU E ARE DISMISSED. 7. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST JULY 2013. SD./- SD./- (T. S. KAPOOR) (U. B. S. BEDI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 31 ST JULY 2013 SP. COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A)-XXV NEW DELHI AR ITAT 5. CIT(ITAT) NEW DELHI NEW DELHI