Hubli Electric Supply Company Limited, Hubli v. ITO, Hubli

ITA 897/BANG/2011 | 2007-2008
Pronouncement Date: 31-07-2012 | Result: Allowed

Appeal Details

RSA Number 89721114 RSA 2011
Assessee PAN AABCH3176J
Bench Bangalore
Appeal Number ITA 897/BANG/2011
Duration Of Justice 9 month(s) 13 day(s)
Appellant Hubli Electric Supply Company Limited, Hubli
Respondent ITO, Hubli
Appeal Type Income Tax Appeal
Pronouncement Date 31-07-2012
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 31-07-2012
Assessment Year 2007-2008
Appeal Filed On 17-10-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI N. BARATHVAJA SANKAR VICE PRESIDENT AND SHRI N.V. VASUDEVAN JUDICIAL MEMBER ITA NOS.896 TO 903/BANG/2011 ASSESSMENT YEARS : 2007-08 TO 2010-11 HUBLI ELECTRIC SUPPLY CORPORATE OFFICE P.B. ROAD NAVANAGAR HUBLI 580 020. PAN : AABCH 3176J VS. THE INCOME TAX OFFICER TDS HUBLI. APPELLANT RESPONDENT ITA NOS.904 TO 906/BANG/2011 & ITA NOS. 908 TO 913/BANG/2012 ASSESSMENT YEARS : 2007-08 TO 2009-10 THE INCOME TAX OFFICER TDS HUBLI. VS. HUBLI ELECTRIC SUPPLY COMPANY LTD. HUBLI 580 020. PAN : AABCH 3176J APPELLANT RESPONDENT ASSESSEE BY : SHRI BALRAM R. RAO ADVOCATE REVENUE BY : SHRI S.K. AMBASTHA CIT-I(DR) DATE OF HEARING : 23.07.2012 DATE OF PRONOUNCEMENT : 31.07.2012 ITA NOS.896 TO 903 & 904 TO 906/BANG/11 AND 908 913/BANG/12 PAGE 2 OF 18 O R D E R PER BENCH THE APPEALS ITA NOS. 896 TO 903/BANG/2011 ARE BY THE ASSESSEE AGAINST FOUR ORDERS ALL DATED 29.07.2011 OF THE CI T(APPEALS) NAVANAGAR HUBLI RELATING TO ASSESSMENT YEARS 2007-08 TO 2010- 11. THE IMPUGNED ORDERS OF THE CIT(APPEALS) WERE PASSED U/S. 201(1) OF THE ACT HOLDING THAT THE ASSESSEE WAS AN ASSESSEE IN DEFAULT IN RESPECT OF THE TAXES NOT DEDUCTED AT SOURCE WHILE MAKING CERTAIN PAYMENTS. THE CIT(APPEALS) ALSO CONFIRMED THE CONSEQUENT LIABILITY OF THE ASSESSEE FOR PAYMENT OF INTEREST ON TAXES NOT DEDUCTED AT SOURCE U/S. 201(1A) OF THE ACT. THUS IN ALL THERE ARE EIGHT APPEALS FILED BY THE ASSESSEE. 2. THE REVENUE HAS PREFERRED APPEALS BEING ITA NOS . 904 TO 906/BANG/11 AGAINST THE VERY SAME ORDERS OF THE CIT (APPEALS) FOR THE ASSESSMENT YEARS 2007-08 TO 2009-10. THE APPEAL ME MO FILED BY THE REVENUE SHOWS THAT REVENUE HAS FILED ONE APPEAL AGA INST THE ORDER U/S. 201(1) AND 201(1A) OF THE ACT. AT THE TIME OF HEAR ING THE BENCH POINTED OUT THAT SEPARATE APPEALS HAVE TO BE FILED AGAINST THE ORDER U/S. 201(1) AND 201(1A) OF THE ACT RESPECTIVELY. CONSEQUENTLY THE REVENUE FILED THE APPEALS BEING ITA NOS.908 TO 913/BANG/2012 AGAINST THE ORDERS OF THE CIT(A) IN RESPECT OF THE SOME OF THE PAYMENTS WHIC H THE CIT(A) HELD WERE NOT LIABLE TO TAX DEDUCTION AT SOURCE. THESE SIX A PPEALS PREFERRED BY THE REVENUE RELATE TO ASSESSMENT YEARS 2007-08 TO 2009- 10 HAVE BEEN FILED BEYOND THE TIME CONTEMPLATED U/S. 253 OF THE ACT. THIS DEFECT IN FILING ALL THE AFORESAID APPEALS IS PURELY TECHNICAL BECAUSE T HE REVENUE HAD ALREADY ITA NOS.896 TO 903 & 904 TO 906/BANG/11 AND 908 913/BANG/12 PAGE 3 OF 18 FILED APPEALS WITHIN TIME IN ITA NOS.904 TO 906/BAN G/2011. WE THEREFORE CONDONE THE DELAY IN FILING THE APPEALS BEING ITA N OS.908 TO 913/BANG/2012. THE APPEALS IN ITA NOS.904 TO 906/ BANG/2011 PROJECT THE SAME GRIEVANCE WHICH THE REVENUE HAS PROJECTED IN I TA NOS.908 TO 913/BANG/2012 THEREFORE THE APPEALS IN ITA NOS. 90 4 TO 906/BANG/2011 ARE DISMISSED AS INFRUCTUOUS. 3. THE DISPUTE RAISED IN THE APPEALS BY THE ASSESSE E AND THE REVENUE ARE WITH REGARD TO DEDUCTION OF TAX AT SOURCE IN RE SPECT OF TRANSMISSION CHARGES AND STATE LOAD DISPATCHING CENTRE (SLDC) CHARGES. 4. THE ASSESSEE IS A LIMITED COMPANY REGISTERED UND ER THE COMPANIES ACT 1956. IT IS ENGAGED IN THE BUSINESS OF BUYING AND SELLING OF ELECTRICITY. THE ASSESSEE PURCHASES ELECTRICITY FROM THE GENERAT ORS OF ELECTRICITY LIKE KARNATAKA POWER CORPORATION LTD. (KPCL) CENTRAL GENERATING STATIONS LIKE NTPC NLC MAPS AND NON-CONVENTIONAL ELECTRICIT Y GENERATORS LIKE JINDAL ENERGY LTD. BHAGYANAGAR BHOURUKHA ETC. AND SELLS THE SAME TO DIFFERENT CATEGORIES OF CONSUMERS IN ITS JURISDICTI ON. THE POWER FROM THE GENERATION POINT TO THE CONSUMERS IS TRANSMITTED TH ROUGH A TRANSMISSION NETWORK OF KARNATAKA POWER TRANSMISSION CORPORATION LTD. (KPTCL). 5. THERE WAS A SURVEY CONDUCTED U/S. 133A OF THE AC T ON 03.03.09 IN THE BUSINESS PREMISES OF THE ASSESSEE. IN THE COUR SE OF SURVEY THE REVENUE CAME ACROSS INSTANCES WHERE PAYMENTS WERE M ADE TO KPTCL & POWER GRID CORPORATION OF INDIA LTD. (PGCIL) FOR TRANSMISSION CHARGES. KPTCL AND PGCIL DEVELOP AND MAINTAIN TRANSMISSION L INES FOR SMOOTH FLOW OF ELECTRICITY FROM A GENERATING STATION TO TH E LOAD CENTRES BOTH WITH THE ITA NOS.896 TO 903 & 904 TO 906/BANG/11 AND 908 913/BANG/12 PAGE 4 OF 18 STATE AND INTRA-STATE. THE REVENUE WAS OF THE VIEW THAT THE PAYMENT FOR USING THE TRANSMISSION LINES FOR TRANSMISSION OF PO WER OWNED BY KPTCL AND PGCIL WAS A PAYMENT FOR TECHNICAL SERVICES REND ERED AND THE ASSESSEE WAS OBLIGED TO DEDUCT TAX AT SOURCE WHILE MAKING SUCH PAYMENT U/S. 194J OF THE ACT. SIMILARLY IN RESPECT OF TH E SLDC CHARGES PAID TO STATE LOAD DISPATCHING CENTRE (SLDC) WHICH IS AN AR M OF KPTCL THE REVENUE WAS OF THE OPINION THAT TAX AT SOURCE OUGHT TO HAVE BEEN DEDUCTED U/S. 194J OF THE ACT. THE FUNCTIONS OF SLDC ARE PR ESCRIBED UNDER SECTION 32 OF THE ELECTRICITY ACT 2003 ACCORDING TO WHICH IT WAS RESPONSIBLE FOR OPTIMUM SCHEDULING AND DISPATCH OF ELECTRICITY WITH IN A STATE IN ACCORDANCE WITH THE CONTRACTS ENTERED INTO WITH THE LICENSEES OR THE GENERATING COMPANIES OPERATING IN THAT STATE FOR MONITORING G RID OPERATIONS FOR KEEPING ACCOUNTS OF THE QUANTITY OF ELECTRICITY TRA NSMITTED THROUGH THE STATE GRID EXERCISING SUPERVISION AND CONTROL OVER THE I NTRA-STATE TRANSMISSIONS SYSTEMS; AND FOR CARRYING OUT REAL TIME OPERATIONS FOR GRID CONTROL AND DISPATCH OF ELECTRICITY WITHIN THE STATE. TO SECUR E AND ECONOMICS OF OPERATIONS OF THE STATE GRID IN ACCORDANCE WITH THE GRID STANDARDS AND THE STATE GRID CODE. THE ASSESSING OFFICER ACCORDINGLY HELD THAT THE ASSESSEE WAS AN ASSESSEE IN DEFAULT U/S. 201(1) OF THE ACT A ND ALSO LEVIED INTEREST ON TAXES U/S. 201(1A) OF THE ACT IN RESPECT OF TRAN SMISSION CHARGES AND SLDC CHARGES PAID AS AFORESAID. 6. ON APPEAL FILED BY THE ASSESSEE THE LD. CIT(APP EALS) WAS OF THE VIEW THAT SLDC CHARGES AND TRANSMISSION CHARGES WER E DISTINCT AND DIFFERENT FROM EACH OTHER. IN RESPECT OF SLDC CHAR GES THE LD. CIT(A) HELD THAT SLDC WAS NOT AN ARM OR WING OF KPTCL AND WAS A N INDEPENDENT ITA NOS.896 TO 903 & 904 TO 906/BANG/11 AND 908 913/BANG/12 PAGE 5 OF 18 STATUTORY BODY UNDER THE ELECTRICITY ACT 2003. HE FURTHER HELD THAT SLDC PERFORMED THE FUNCTIONS WHICH WERE MANAGERIAL AND T ECHNICAL IN NATURE AND RENDERED ONLY BY HUMANS. HE THEREFORE HELD THAT SL DC CHARGES ARE FEES FOR TECHNICAL SERVICES. THE FURTHER ARGUMENT OF TH E ASSESSEE WAS THAT U/S. 196 OF THE ACT THERE IS NO OBLIGATION TO DEDUCT TA X AT SOURCE ON PAYMENTS MADE TO GOVERNMENT AND PAYMENT TO SLDC WAS PAYMENT TO GOVERNMENT. ON THIS PLEA THE LD. CIT(A) HELD THAT SLDC CANNOT BE CONSIDERED AS GOVERNMENT AND THEREFORE IMMUNITY U/S. 196 OF THE A CT WAS NOT AVAILABLE. 7. WITH REGARD TO THE TRANSMISSION CHARGES PAID TO KPTCL THE LD. CIT(APPEALS) HELD THAT THE SAME WERE NOT IN THE NAT URE OF FEES FOR TECHNICAL SERVICES AND ACCORDINGLY THERE WAS NO OBLIGATION ON THE PART OF THE ASSESSEE TO DEDUCT TAX AT SOURCE AT THE TIME OF MAK ING PAYMENT OF TRANSMISSION CHARGES TO KPTCL. THE LD. CIT(A) FURT HER HELD THAT IN CASES WHERE THE RECIPIENT OF PAYMENT FROM THE ASSESSEE HA VE MADE PAYMENT OF TAXES THEN TO THAT EXTENT THE ASSESSEE CANNOT BE TREATED AS AN ASSESSEE IN DEFAULT. HE FURTHER HELD THAT INTEREST U/S. 201 (1A) OF THE ACT HAS TO BE WORKED OUT FROM THE DUE DATE OF REMITTANCE OF TDS T ILL THE DATE OF RETURN FILED BY THE RECIPIENTS OF THE PAYMENTS FROM THE AS SESSEE. IN THIS REGARD THE LD. CIT(A) RELIED ON THE DECISION OF THE HONBL E SUPREME COURT IN THE CASE OF HINDUSTAN COCA COLA BEVERAGES PVT. LTD. V. CIT 293 ITR 226 (SC) . 8. AGGRIEVED BY THE RELIEF ALLOWED BY THE CIT(APPEA LS) THE REVENUE HAS PREFERRED THE AFORESAID APPEALS FOR THE AYS 200 7-08 TO 2009-10; AGGRIEVED BY THE ACTION OF THE CIT(A) IN CONFIRMING THE ACTION OF THE AO ITA NOS.896 TO 903 & 904 TO 906/BANG/11 AND 908 913/BANG/12 PAGE 6 OF 18 WITH REGARD TO PAYMENT OF SLDC CHARGES THE ASSESSE E HAS PREFERRED THE AFORESAID APPEALS BEFORE THE TRIBUNAL. 9. AT THE TIME OF HEARING OF THESE APPEALS THE PAR TIES AGREED THAT THE QUESTION AS TO WHETHER TAX HAD TO BE DEDUCTED AT SO URCE ON PAYMENT OF TRANSMISSION CHARGES AND SLDC CHARGES HAS BEEN CONS IDERED BY THIS TRIBUNAL VIDE ORDER DATED 16.03.2012 IN THE CASE OF BANGALORE ELECTRICITY SUPPLY COMPANY V. ITO (TDS) WARD 16(1) BANGALORE IN ITA NO.530 TO 535/BANG/2011 546 TO 548/BANG/2010 541 TO 545/ BANG/2010 AND 256 TO 260/BANG/2011 WHEREIN THE TRIBUNAL HAS HELD AS FOLLOWS:- 5. WE HAVE CAREFULLY HEARD BOTH PARTIES PERUSED T HE MATERIAL ON RECORD AND THE JUDICIAL DECISIONS CITED AND RELIED UPON. THE TWO DECISIONS RELIED ON BY THE LEARNED DEPARTMENTAL REP RESENTATIVE ARE CLEARLY DISTINGUISHABLE ON FACTS AS LUCIDLY BRO UGHT OUT BY THE LEARNED AUTHORISED REPRESENTATIVE IN PARA 4.3 OF TH IS ORDER. THE DECISION OF JAIPUR VIDYUT VITRAQN NIGAM LTD. (SUPRA ) HAS BEEN PERUSED AND WE FIND THAT THE FACTS OF THE CASE AND ISSUES ARE IDENTICAL TO THAT OF THE ASSESSEES CASE AND IS SQU ARELY COVERED BY IT. THE HON'BLE TRIBUNAL IN THE CASE OF JVVNL HAS V ERY SUCCINCTLY DEALT WITH THE ISSUES AND THE RELEVANT C ASE LAWS WHICH BRING OUT THE MEANING OF THE EXPRESSION FEE FOR TE CHNICAL SERVICES AS USED IN SECTION 194J R.W. EXPLANATION 2 TO SECTION 9(1)(VII) OF THE ACT. WE FIND IT NECESSARY TO EXTRA CT RELEVANT PORTIONS OF THE JUDGEMENT THEREOF. PARA 9.2 : IN ABOVE CONNECTION IT IS RELEVANT TO E XTRACT THE RELEVANT PROVISIONS OF SECTION 194J WHICH ARE AS FO LLOWS : 194J. FEES FOR PROFESSIONAL OR TECHNICAL SERVICES --- (1) ANY PERSON NOT BEING AN INDIVIDUAL OR AN HUF WHO IS RESPONSIBLE FOR PAYING TO A RESIDENT ANY SUM BY WAY OF --- A) FEES FOR PROFESSIONAL SERVICES OR B) FEES FOR TECHNICAL SERVICES OR C) ROYALTY OR D) ANY SUM REFERRED TO IN CLAUSE (VA) OF SECTION 28 . SHALL AT THE TIME OF CREDIT OF SUCH SUM TO THE ACC OUNT OF THE PAYEE OR AT THE TIME OF PAYMENT THEREOF IN CASH OR BY ITA NOS.896 TO 903 & 904 TO 906/BANG/11 AND 908 913/BANG/12 PAGE 7 OF 18 ISSUE OF A CHEQUE OR DRAFT OR BY ANY OTHER MODE WH ICHEVER IS EARLIER DEDUCT AN AMOUNT EQUAL TO TEN PER CENT OF SUCH SUM AS INCOME-TAX ON INCOME COMPRISED THEREIN: PROVIDED THAT NO DEDUCTION SHALL BE MADE UNDER THIS SECTION ... (A) . (B) . (2)( ..) (3)(..) EXPLANATION : FOR THE PURPOSES OF THIS SECTION . (B) FEES FOR TECHNICAL SERVICES SHALL HAVE THE SAME MEANING AS IN EXPLN. 2 TO CLAUSE (VII) OF SUB-SECTION (1) OF SECTION 9; (C) . THE EXPRESSION FEES FOR TECHNICAL SERVICES HAS NO T BEEN DEFINED UNDER SECTION 194J OF THE ACT BUT EXPLN. (B) TO SECTION 194J OF THE ACT PROVIDES THAT THE SAID EXP RESSION SHALL HAVE THE SAME MEANING AS IN EXPLN. 2 TO CLAUS E (VII) OF SUB-SECTION (1) OF SECTION 9. THE SAID SECTION I S REPRODUCED HEREIN BELOW FOR READY REFERENCE: 9. INCOME DEEMED TO ACCRUE OR ARISE IN INDIA. (1) THE FOLLOWING INCOMES SHALL BE DEEMED TO ACCRUE OR ARISE IN INDIA: (VII) INCOME BY WAY OF FEES FOR TECHNICAL SERVICES PAYABLE BY EXPLANATION 2. FOR THE PURPOSES OF THIS CLAUSE FEES FOR TECHNICAL SERVICES MEANS ANY CONSIDERATION (INCLUDING ANY LUMP SUM CONSIDERATION) FOR THE RENDERING OF ANY MANAGERIAL TECHNICAL OR CONSULTANCY SERVICES (INCLUDING THE PROVISION OF SERVICES OF TECHNICAL OR OTHER PERSONNEL) BUT DOES NOT INCLUDE CONSIDERATION FOR ANY CONSTRUCTION ASSEMBLY MINING OR LIKE PROJECT UNDERTAKEN BY THE RECIPIENT OR CONSIDERATION WHICH WOULD BE INCOME OF THE RECIPIENT CHARGEABLE UNDER THE HEAD SALARIES. PARA 9.3. THE EXPRESSION FEES FOR TECHNICAL SERVIC E AS USED IN SECTION 194J OF THE ACT HAS BEEN EXHAUSTIVELY EX AMINED BY ITA NOS.896 TO 903 & 904 TO 906/BANG/11 AND 908 913/BANG/12 PAGE 8 OF 18 THE HONBLE DELHI HIGH COURT IN THE CASE OF BHARTI CELLULAR LTD. ( SUPRA) AND THE OBSERVATIONS ARE REPRODUCED AS UNDER: 13. WE HAVE ALREADY POINTED OUT THAT THE EXPRESSI ON FEES FOR TECHNICAL SERVICES AS APPEARING IN SECTI ON 194J OF THE SAID ACT HAS THE SAME MEANING AS GIVEN TO TH E EXPRESSION IN EXPLN. 2 TO SECTION 9(( VIZ) OF THE S AID ACT. IN THE SAID EXPLANATION THE EXPRESSION FEES FOR TECHN ICAL SERVICES MEANS ANY CONSIDERATION FOR RENDERING OF ANY MANAGERIAL TECHNICAL OR CONSULTANCY SERVICES. TH E WORD TECHNICAL IS PRECEDED BY THE WORD MANAGERIAL AN D SUCCEEDED BY THE WORD CONSULTANCY. SINCE THE EXPRE SSION TECHNICAL SERVICES IS IN DOUBT AND IS UNCLEAR TH E RULE OF NOSCITUR A SOCIIS IS CLEARLY APPLICABLE. THE SAID R ULE IS EXPLAINED IN MAXWELL ON THE INTERPRETATION OF STATU TES (TWELFTH EDITION) IN THE FOLLOWING WORDS: WHERE TWO OR MORE WORDS WHICH ARE SUSCEPTIBLE OF ANALOGOUS MEANI NG ARE COUPLED TOGETHER NOSCITUR A SOCIIS THEY ARE UNDERSTOOD TO BE USED IN THEIR COGNATE SENSE. THEY TAKE AS IT WERE THEIR COLOUR FROM EACH OTHER THE MEANING OF THE MORE GENERAL BEING RESTRICTED TO A SENSE ANALOGOUS TO THAT OF THE LESS GENERAL. THIS WOULD MEAN THAT THE WORD TECHNICAL WOULD TAKE COLOUR FROM THE WORDS MANAG ERIAL AND CONSULTANCY BETWEEN WHICH IT IS SANDWICHED. T HE WORD MANAGERIAL HAS BEEN DEFINED IN THE SHORTER O XFORD ENGLISH DICTIONARY FIFTH EDITION AS: OF PERTAINING TO OR CHARACTERISTIC OF A MANAGER OF OR WITHIN AN ORGANIZ ATION BUSINESS ESTABLISHMENT ETC. THE WORD MANAGER HA S BEEN DEFINED INTER ALIA AS: A PERSON WHOSE OFFICE IT I S TO MANAGE AN ORGANIZATION BUSINESS ESTABLISHMENT OR PUBLIC INSTITUTION OR PART OF ONE; A PERSON WITH THE PRIM ARILY EXECUTIVE OR SUPERVISORY FUNCTION WITHIN AN ORGANIZ ATION ETC.; A PERSON CONTROLLING THE ACTIVITIES OF A PERS ON OR TEAM IN SPORTS ENTERTAINMENT ETC. IT IS THEREFORE CLE AR THAT A MANAGERIAL SERVICE WOULD BE ONE WHICH PERTAINS TO O R HAS THE CHARACTERISTIC OF A MANAGER. IT IS OBVIOUS THAT THE EXPRESSION MANAGER AND CONSEQUENTLY MANAGERIAL SERVICE HAS A DEFINITE HUMAN ELEMENT ATTACHED TO I T. TO PUT IT BLUNTLY A MACHINE CANNOT BE A MANAGER. 14. SIMILARLY THE WORD CONSULTANCY HAS BEEN DEF INED IN THE SAID DICTIONARY AS THE WORK OR POSITION OF A CONSULTANT; A DEPARTMENT OF CONSULTANTS. CONSULTA NT ITSELF HAS BEEN DEFINED INTER ALIA AS A PERSON W HO GIVES PROFESSIONAL ADVICE OR SERVICES IN A SPECIALIZED FI ELD. IT IS OBVIOUS THAT THE WORD CONSULTANT IS A DERIVATIVE OF THE ITA NOS.896 TO 903 & 904 TO 906/BANG/11 AND 908 913/BANG/12 PAGE 9 OF 18 WORD CONSULT WHICH ENTAILS DELIBERATIONS CONSIDE RATION CONFERRING WITH SOMEONE CONFERRING ABOUT OR UPON A MATTER. CONSULT HAS ALSO BEEN DEFINED IN THE SAID DICTIONARY AS ASK ADVICE FOR SEEK COUNSEL OR A PROFESSIONAL OPINION FROM; REFER TO (A SOURCE OF INFORMATION); SEEK PERMISSION OR APPROVAL FROM FOR A PROPOSED ACTION. IT IS OBVIOUS THAT THE SERVICE AL SO NECESSARILY ENTAILS HUMAN INTERVENTION. THE CONSULT ANT WHO PROVIDES THE CONSULTANCY SERVICE HAS TO BE A H UMAN BEING. A MACHINE CANNOT BE REGARDED AS A CONSULTANT . 15. FROM THE ABOVE DISCUSSION IT IS APPARENT THAT BOTH THE WORDS MANAGERIAL AND CONSULTANCY INVOLVE A HUMA N ELEMENT. AND BOTH MANAGERIAL SERVICE AND CONSULTA NCY SERVICE ARE PROVIDED BY HUMANS. CONSEQUENTLY APPL YING THE RULE OF NOSCITUR A SOCIIS THE WORD TECHNICAL AS APPEARING IN EXPLN. 2 TO SECTION 9(L)(VIZ) WOULD AL SO HAVE TO BE CONSTRUED AS INVOLVING A HUMAN ELEMENT. BUT THE FACILITY PROVIDED BY MTNL/OTHER COMPANIES FOR INTERCONNECTION/PORT ACCESS IS ONE WHICH IS PROVIDE D AUTOMATICALLY BY MACHINES. IT IS INDEPENDENTLY PROV IDED BY THE USE OF TECHNOLOGY AND THAT TOO SOPHISTICATED TECHNOLOGY BUT THAT DOES NOT MEAN THAT MTNL/OTHER COMPANIES WHICH PROVIDE SUCH FACILITIES ARE RENDERI NG ANY TECHNICAL SERVICES AS CONTEMPLATED IN EXPLN. 2 TO S ECTION 9(1 )(VN) OF THE SAID ACT. THIS IS SO BECAUSE THE E XPRESSION TECHNICAL SERVICES TAKES COLOUR FROM THE EXPRESSI ONS MANAGERIAL SERVICES AND CONSULTANCY SERVICES WH ICH NECESSARILY INVOLVE A HUMAN ELEMENT OR WHAT IS NOW A DAYS FASHIONABLY CALLED HUMAN INTERFACE. IN THE FA CTS OF THE PRESENT APPEALS THE SERVICES RENDERED QUA INTERCONNECTION/PORT ACCESS DO NOT INVOLVE ANY HUMA N INTERFACE AND THEREFORE THE SAME CANNOT BE REGARD ED AS TECHNICAL SERVICES AS CONTEMPLATED UNDER SECTION 194J OF THE SAID ACT. 20. BEFORE CONCLUDING WE WOULD ALSO LIKE TO POINT O UT THAT THE INTERCONNECTION/PORT ACCESS FACILITY IS ONLY A FACILITY TO USE THE GATEWAY AND THE NETWORK OF MTNL/OTHER COMPANIES. MTNL OR OTHER COMPANIES DO NOT PROVIDE A NY ASSISTANCE OR AID OR HELP TO THE RESPONDENTS/ASSESS EE IN MANAGING OPERATING SETTING UP THEIR INFRASTRUCTUR E AND NETWORKS. NO DOUBT THE FACILITY OF INTERCONNECTION AND PORT ACCESS PROVIDED BY MTNL/OTHER COMPANIES IS TECHNICAL IN THE SENSE THAT IT INVOLVES SOPHISTIC ATED TECHNOLOGY. THE FACILITY MAY EVEN BE CONSTRUED AS A ITA NOS.896 TO 903 & 904 TO 906/BANG/11 AND 908 913/BANG/12 PAGE 10 OF 18 SERVICE IN THE BROADER SENSE SUCH AS A COMMUNICA TION SERVICE. BUT WHEN WE ARE REQUIRED TO INTERPRET THE EXPRESSION TECHNICAL SERVICE THE INDIVIDUAL MEAN ING OF THE WORDS TECHNICAL AND SERVICE HAVE TO BE SHED . AND ONLY ONE MEANING OF THE WHOLE EXPRESSION TECHNICAL SERVICES HAS TO BE SEEN. MOREOVER THE EXPRESSION TECHNICAL SERVICE IS NOT TO BE CONSTRUED IN THE A BSTRACT AND GENERAL SENSE BUT IN THE NARROWER SENSE AS CIRCUMSCRIBED BY THE EXPRESSIONS MANAGERIAL SERVIC E AND CONSULTANCY SERVICE AS APPEARING IN EXPLN. 2 TO SECTION 9(1)(VII) OF THE SAID ACT. CONSIDERED IN TH IS LIGHT THE EXPRESSION TECHNICAL SERVICE COULD HAVE REFER ENCE TO ONLY TECHNICAL SERVICE RENDERED BY A HUMAN. IT WOUL D NOT INCLUDE ANY SERVICE PROVIDED BY MACHINES OR ROBOTS. PARA 9.4. THE HONBLE MADRAS HIGH COURT IN THE CASE OF SKYCELL COMMUNICATIONS LTD (SUPRA) HAS HELD AS UNDER: 4. FEES FOR TECHNICAL SERVICES IS NOT DEFINED IN SECTION L94J. EXPLANATION (B) IN THAT SECTION PROVIDES THAT EXPRESSION SHALL HAVE THE SAME MEANING AS IN EXPLN. 2 TO CLAUSE (VII) OF SUB-S.( OF SECTION 9. THAT EXPLN. 2 IN SECTION 9(L)(VII) READS THUS: FOR THE PURPOSES OF THIS CLAUSE FEES FOR TECHNIC AL SERVICES MEANS ANY CONSIDERATION (INCLUDING ANY LUMP SUM CONSIDERATION) FOR RENDERING OF ANY MANAGERIAL TECHNICAL OR CONSULTANCY SERVICES (INCLUDING THE PROVISION OF SERVICES OF TECHNICAL O R OTHER PERSONNEL) BUT DOES NOT INCLUDE CONSIDERATION FOR ANY CONSTRUCTION ASSEMBLY MINING OR LIKE PROJECT UNDERTAKEN BY THE RECIPIENT OR CONSIDERATION WHICH WOULD BE INCOME OF THE RECIPIENT CHARGEABLE UNDER THE HEAD SALARIES. THIS DEFINITION SHOWS THAT CONSIDERATION PAID FOR T HE RENDERING OF ANY MANAGERIAL TECHNICAL OR CONSULTAN CY SERVICE AS ALSO THE CONSIDERATION PAID FOR THE PRO VISION OF SERVICES OF TECHNICAL OR OTHER PERSONNEL WOULD BE REGARDED AS FEES PAID FOR TECHNICAL SERVICES. THE DEFINITI ON EXCLUDES FROM ITS AMBIT CONSIDERATION PAID FOR CONSTRUCTION ASSEMBLY OR MINING OR LIKE PROJECT UNDERTAKEN BY THE RECIPIENT AS ALSO CONSIDERATION WHICH WOULD CONSTITUTE INCOME OF THE RECIPIENT CHARGEABLE UNDER THE HEAD SALARIES. THUS WHILE STATING THAT TECHN ICAL SERVICE WOULD INCLUDE MANAGERIAL AND CONSULTANCY SERVICE THE LEGISLATURE HAS NOT SET OUT WITH PRECI SION AS TO ITA NOS.896 TO 903 & 904 TO 906/BANG/11 AND 908 913/BANG/12 PAGE 11 OF 18 WHAT WOULD CONSTITUTE TECHNICAL SERVICE TO RENDER IT TECHNICAL SERVICE. THE MEANING OF THE WORD TECHN ICAL AS GIVEN IN THE N EW OXFORD DICTIONARY IS ADJECTIVE 1 OF OR RELATING TO A PARTICULAR SUBJECT ART OR CRAFT OR I TS TECHNIQUES; TECHNICAL TERMS (ESPECIALLY OF A BOOK O R ARTICLE) REQUIRING SPECIAL KNOWLEDGE TO BE UNDERSTO OD; A TECHNICAL REPORT 2 OF INVOLVING OR CONCERNED WITH APPLIED AND INDUSTRIAL SCIENCES: AN IMPORTANT TECHNICAL ACHIEVEMENT 3. RESULTING FROM MECHANICAL FAILURE: A TECHNICAL FAULT 4. ACCORDING TO A STRICT APPLICATI ON OR INTERPRETATION OF THE LAW OR THE RULES: THE ARREST WAS A TECHNICAL VIOLATION OF THE TREATY. HAVING REGARD TO THE FACT THAT THE TERM IS REQUIRED TO BE UNDERSTOOD IN THE CONTEXT IN WHICH IT IS USED FEE FOR TECHNICAL SERVICES COULD ONLY BE MEANT TO COVER SU CH THINGS TECHNICAL AS ARE CAPABLE OF BEING PROVIDED B Y WAY OF SERVICE FOR A FEE. THE POPULAR MEANING ASSOCIATE D WITH TECHNICAL IS INVOLVING OR CONCERNING APPLIED AND INDUSTRIAL SCIENCE. 5. IN THE MODERN DAY WORLD ALMOST EVERY FACET OF O NES LIFE IS LINKED TO SCIENCE AND TECHNOLOGY INASMUCH A S NUMEROUS THINGS USED OR RELIED UPON IN EVERYDAY LIF E IS THE RESULT OF SCIENTIFIC AND TECHNOLOGICAL DEVELOPMENT. EVERY INSTRUMENT OR GADGET THAT IS USED TO MAKE LIFE EASI ER IS THE RESULT OF SCIENTIFIC INVENTION OR DEVELOPMENT AND I NVOLVES THE USE OF TECHNOLOGY. ON THAT SCORE EVERY PROVIDE R OF EVERY INSTRUMENT OR FACILITY USED BY A PERSON CANNO T BE REGARDED AS PROVIDING TECHNICAL SERVICE. WHEN A PE RSON HIRES A TAXI TO MOVE FROM ONE PLACE TO ANOTHER HE USES A PRODUCT OF SCIENCE AND TECHNOLOGY VIZ. AN AUTOMOB ILE. IT CANNOT ON THAT GROUND BE SAID THAT THE TAXI DRIVER WHO CONTROLS THE VEHICLE ARID MONITORS ITS MOVEMENT IS RENDERING A TECHNICAL SERVICE TO THE PERSON WHO USE S THE AUTOMOBILE. SIMILARLY WHEN A PERSON TRAVELS BY TRA IN OR IN AN AEROPLANE IT CANNOT BE SAID THAT THE RAILWAYS O R AIRLINES IS RENDERING A TECHNICAL SERVICE TO THE PASSENGER A ND THEREFORE THE PASSENGER IS UNDER AN OBLIGATION TO DEDUCT TAX AT SOURCE ON THE PAYMENTS MADE TO THE RAILWAY O R THE AIRLINE FOR HAVING USED IT FOR TRAVELLING FROM ONE DESTINATION TO ANOTHER. WHEN A PERSON TRAVELS BY BU S IT CANNOT BE SAID THAT THE UNDERTAKING WHICH OWNS THE BUS SERVICE IS RENDERING TECHNICAL SERVICE TO THE PASSE NGER AND THEREFORE THE PASSENGER MUST DEDUCT TAX AT SOURCE ON THE PAYMENT MADE TO THE BUS SERVICE PROVIDER FOR HAVIN G USED ITA NOS.896 TO 903 & 904 TO 906/BANG/11 AND 908 913/BANG/12 PAGE 12 OF 18 THE BUS. THE ELECTRICITY SUPPLIED TO A CONSUMER CAN NOT ON THE GROUND THAT GENERATORS ARE USED TO GENERATE ELE CTRICITY TRANSMISSION LINES TO CARRY THE POWER TRANSFORMERS TO REGULATE THE FLOW OF CURRENT METERS TO MEASURE THA T CONSUMPTION BE REGARDED AS AMOUNTING TO PROVISION OF TECHNICAL SERVICES TO THE CONSUMER RESULTING IN THE CONSUMER HAVING TO DEDUCT TAX AT SOURCE ON THE PAYMENT MADE FOR THE POWER CONSUMED AND REMIT THE SAME TO THE REVENUE. SATELLITE TELEVISION HAS BECOME UBIQUITOUS AND IS SPREADING ITS AREA AND COVERAGE AND COVERS MILL IONS OF HOMES. WHEN A PERSON RECEIVES SUCH TRANSMISSION OF TELEVISION SIGNALS THROUGH THE CABLE PROVIDED BY TH E CABLE OPERATOR IT CANNOT BE SAID THAT THE HOME OWNER WHO HAS SUCH A CABLE CONNECTION IS RECEIVING A TECHNICAL SE RVICE FOR WHICH HE IS REQUIRED TO DEDUCT TAX AT SOURCE ON THE PAYMENTS MADE TO THE CABLE OPERATOR. INSTALLATION A ND OPERATION OF SOPHISTICATED EQUIPMENTS WITH A VIEW T O EARN INCOME BY ALLOWING CUSTOMERS TO AVAIL OF THE BENEFI T OF THE USER OF SUCH EQUIPMENT DOES NOT RESULT IN THE PROVI SION TO TECHNICAL SERVICE TO THE CUSTOMERS FOR A FEE. 6. WHEN A PERSON DECIDES TO SUBSCRIBE TO A CELLULAR TELEPHONE SERVICE IN ORDER TO HAVE THE FACILITY OF BEING ABLE TO COMMUNICATE WITH OTHERS HE DOES NOT CONTRACT TO RECEIVE A TECHNICAL SERVICE. WHAT HE DOES AGREE TO IS TO PAY FOR THE USE OF THE AIRTIME FOR WHICH HE PAYS A CHAR GE. THAT FACT THAT THE TELEPHONE SERVICE PROVIDER HAS INSTAL LED SOPHISTICATED TECHNICAL EQUIPMENT IN THE EXCHANGE T O ENSURE CONNECTIVITY TO ITS SUBSCRIBER DOES NOT ON THAT SCORE MAKE IT PROVISION OF A TECHNICAL SERVICE TO THE SUBSCRIBER. THE SUBSCRIBER IS NOT CONCERNED WITH TH E COMPLEXITY OF THE EQUIPMENT INSTALLED IN THE EXCHAN GE OR THE LOCATION OF THE BASE STATION. ALL THAT HE WANTS IS THE FACILITY OF USING THE TELEPHONE WHEN HE WISHES TO AND BEING ABLE TO GET CONNECTED TO THE PERSON AT THE NU MBER TO WHICH HE DESIRES TO BE CONNECTED. WHAT APPLIES TO C ELLULAR MOBILE TELEPHONE IS ALSO APPLICABLE IN FIXED TELEPH ONE SERVICE. NEITHER SERVICE CAN BE REGARDED AS TECHNI CAL SERVICE FOR THE PURPOSE OF SECTION 194J OF THE ACT . 7. THE USE OF THE INTERNET AND THE WORLD WIDE WEB I S INCREASING BY LEAPS AND BOUNDS AND THERE ARE HUNDR EDS OF THOUSANDS IF NOT MILLIONS OF SUBSCRIBERS TO THAT FACILITY. THE INTERNET IS VERY MUCH A PRODUCT OF TECHNOLOGY AND WITHOUT THE SOPHISTICATED EQUIPMENT INSTALLED BY TH E INTERNET SERVICE PROVIDERS AND THE USE OF THE TELEP HONE ITA NOS.896 TO 903 & 904 TO 906/BANG/11 AND 908 913/BANG/12 PAGE 13 OF 18 FIXED OR MOBILE THROUGH WHICH THE CONNECTION IS ESTABLISHED THE SERVICE CANNOT BE PROVIDED. HOWEVE R ON THAT SCORE EVERY SUBSCRIBER OF THE INTERNET SERVIC E PROVIDER CANNOT BE REGARDED AS HAVING ENTERED INTO A CONTRAC T FOR AVAILING OF TECHNICAL SERVICES FROM THE PROVIDER OF THE INTERNET SERVICE AND SUCH SUBSCRIBER REGARDED AS B EING OBLIGED TO DEDUCT TAX AT SOURCE ON THE PAYMENT MADE TO THE INTERNET SERVICE PROVIDER. 8. AT THE TIME THE IT ACT WAS ENACTED IN THE YEAR 1 961 AS ALSO AT THE TIME WHEN EXPLN. 2 TO SECTION 9(L)(VII) WAS INTRODUCED BY THE FINANCE (NO. 2) ACT W.E.F. 1 ST APRIL 1977 THE PRODUCTS OF TECHNOLOGY HAD NOT BEEN IN SU CH WIDE USE AS THEY ARE TODAY. ANY CONSTRUCTION OF THE PROVISIONS OF THE ACT MUST BE IN THE BACKGROUND OF THE REALITIES OF DAY-TO-DAY LIFE IN WHICH THE PRODUCTS OF TECHNOLOGY PLAY AN IMPORTANT ROLE IN MAKING LIFE SM OOTHER AND MORE CONVENIENT. SEC. 194J AS ALSO EXPLN. 2 IN SECTION 9(L)(VIX) OF THE ACT WERE NOT INTENDED TO C OVER THE CHARGES PAID BY THE AVERAGE HOUSEHOLDER OR CONSUMER FOR UTILIZING THE PRODUCTS OF MODERN TECHNOLOGY SUCH A S USE OF THE TELEPHONE FIXED OR MOBILE THE CABLE TV THE INTERNET THE AUTOMOBILE THE RAILWAY THE AEROPLAN E CONSUMPTION OF ELECTRICAL ENERGY ETC. SUCH FACILITIES WHICH WHEN USED BY INDIVIDUALS ARE NOT CAPABLE OF B EING REGARDED AS TECHNICAL SERVICE CANNOT BECOME SO WHEN USED BY FIRMS AND COMPANIES. THE FACILITY REMAINS THE SA ME WHOEVER THE SUBSCRIBER MAY BE INDIVIDUAL FIRM OR COMPANY. 9. TECHNICAL SERVICE REFERRED IN SECTION 9(1)(VII) CONTEMPLATES RENDERING OF A SERVICE TO THE PAYER OF THE FEE. MERE COLLECTION OF A FEE FOR USE OF A STANDA RD FACILITY PROVIDED TO ALL THOSE WILLING TO PAY FOR IT DOES NO T AMOUNT TO THE FEE HAVING BEEN RECEIVED FROM TECHNICAL SERV ICES. THUS HONBLE COURT WHILE DEALING WITH THE CASE OF TRANSMISSION OF VOICE HAS EQUATED THE SAME WITH T HE TRANSMISSION OF THE ELECTRICITY AND HELD THAT THE SAME DOES NOT AMOUNT TO PROVIDING THE TECHNICAL SERVICE. PARA 9.5. IN THE CASE OF PARASRAMPURIA SYNTHETICS LTD. (SUPRA) IT WAS HELD AS UNDER: THERE MAY BE USE OF SERVICES OF TECHNICALLY QUALIF IED PERSON TO RENDER THE SERVICES BUT THAT ITSELF DO NO T BRING THE AMOUNT PAID AS FEES FOR TECHNICAL SERVICES WI THIN THE ITA NOS.896 TO 903 & 904 TO 906/BANG/11 AND 908 913/BANG/12 PAGE 14 OF 18 MEANING OF EXPLN 2 TO SECTION 9(1)(VIT). THE AMOUN T PAID ARE TOWARDS ANNUAL MAINTENANCE CONTRACT OF CERTAIN MACHINERY OR FOR CONVERTING PARTIALLY ORIENTED YARD (POY) INTO TEXTURISED/TWISTED YARN. THE TECHNOLOGY OR TEC HNICAL KNOWLEDGE OF PERSONS IS NOT MADE AVAILABLE TO THE A SSESSEE BUT ONLY BY USING SUCH TECHNICAL KNOWLEDGE SERVICES ARE RENDERED TO THE ASSESSEE. IN SUCH A CASE IT CANNOT BE SAID THAT THE AMOUNT IS PAID AS FEES FOR TECHNICAL SERV ICES. RENDERING SERVICES BY USING TECHNICAL KNOWLEDGE OR SKILL IS DIFFERENT THAN CHARGING FEES FOR TECHNICAL SERVI CES! IN THE LATER CASE THE TECHNICAL SERVICES ARE MADE AVAI LABLE DUE TO WHICH ASSESSEE ACQUIRED CERTAIN RIGHT WHICH CAN BE FURTHER USED. ACCORDINGLY WHERE THE PERSONS RENDERI NG CERTAIN SERVICES HAS ONLY MAINTAINED MACHINERY OR CONVERTED YARN BUT THAT KNOWLEDGE IS NOT VESTED WIT H THE ASSESSEE BY WHICH ITSELF IT CAN DO RESEARCH WORK T HE AMOUNT PAID CANNOT BE CONSIDERED AS FEES FOR TECHNI CAL SERVICES WITHIN THE MEANING OF SECTION 194J OF THE ACT. PARA 9.6. AN ANALYSIS OF ABOVE CASES LAYS DOWN THE PROPOSITION THAT SECTION 194J WOULD HAVE APPLICATIO N ONLY WHEN THE TECHNOLOGY OR TECHNICAL KNOWLEDGE OF A PER SON IS MADE AVAILABLE TO OTHERS AND NOT WHERE BY USING TEC HNICAL SYSTEMS SERVICES ARE RENDERED TO OTHERS. RENDERING OF SERVICES BY ALLOWING USE OF TECHNICAL SYSTEM IS DIF FERENT THAN CHARGING FEES FOR RENDERING TECHNICAL SERVICES. THE APPLICABILITY OF SECTION 194J WOULD COME INTO EFFEC T ONLY WHEN BY MAKING PAYMENT OF FEE FOR TECHNICAL SERVICE S ASSESSEE ACQUIRED CERTAIN SKILL/KNOWLEDGE/INTELLECT WHICH CAN BE FURTHER USED BY HIM FOR ITS OWN PURPOSE/RESEARCH . WHERE FACILITY IS PROVIDED BY USE OF MACHINE/ROBOT OR WHE RE SOPHISTICATED EQUIPMENTS ARE INSTALLED AND OPERATED WITH A VIEW TO EARN INCOME BY ALLOWING THE CUSTOMERS TO AV AIL OF THE BENEFIT BY USER OF SUCH EQUIPMENT THE SAME DOES NO T RESULT IN THE PROVISION OF TECHNICAL SERVICE TO THE CUSTOMER FOR A FEE. SIMILAR IS THE PROPOSITION LAID DOWN IN OTHER CASES RELIED BY THE LEARNED AUTHORISED REPRESENTATIVE SUPRA. PARA 9.7. THE ARGUMENTS OF THE LEARNED DEPARTMENTAL REPRESENTATIVE THAT HUMAN ELEMENT IS INVOLVED IN PR OVIDING SUCH SERVICE MAKING THE PAYMENT OF WHEELING/SLDC CH ARGES LIABLE FOR DEDUCTION OF TAX AT SOURCE AS TECHNICAL SERVICE HAS NO MERIT AS THE TECHNICAL SERVICE IS NOT PROVIDED T O THE PERSONNEL OF THE ASSESSEE. WE ARE ALSO UNABLE TO PU RSUE (SIC) OURSELF WITH THE CONTENTION OF THE LEARNED DEPARTME NTAL ITA NOS.896 TO 903 & 904 TO 906/BANG/11 AND 908 913/BANG/12 PAGE 15 OF 18 REPRESENTATIVE THAT OTHER PERSONS ARE MAKING DEDUCT ION AT SOURCE ON SUCH PAYMENT UNDER SECTION 194C/ L94J/194 H. THE TRIBUNAL THEN IN PARA 9.10 THEREOF WENT ON TO H OLD THAT THE ASSESSEE M/S. JAIPUR VIDYUT VITRAN NIGAM LTD. WAS NOT LIABLE FOR DEDUCTION OF TAX AT SOURCE ON PAYMENT OF TRANSMISSION / SLDC CHARGES TO RAJASTHAN VIDYUT PRASARAN NIGAM LTD. THE TRANSMISSION COMPAN Y AS UNDER : 9.10. WE ALSO FIND FORCE IN ALTERNATE ARGUMENT OF THE LEARNED AUTHORISED REPRESENTATIVE THAT THE PAYMENT OF TRANSMISSION/WHEELING/SLDC CHARGES IS REIMBURSEMENT OF THE COST. THEREFORE THE PROVISIONS OF CHAPTER XVII-B AR E NOT APPLICABLE SINCE THERE IS NO PAYMENT OF INCOME/REVE NUE BY THE ASSESSEE. WE FIND THAT THE TARIFF IS FIXED BY AN IN DEPENDENT REGULATORY BODY I.E. RAJASTHAN ELECTRICITY REGULAT ORY COMMISSION. THE TRANSMISSION COMPANY IS NOT ALLOWED ANY RETURN ON ITS CAPITAL; THE TARIFF IS DETERMINED ON THE PRINCIPLE OF NO PROFIT NO LOSS. FROM THE TARIFF ORDER (PAPER BOOK 9 0-93) WE FIND THAT TARIFF IS FIXED BY ESTIMATING THE ACTUAL COST OF OPERATION OF RVPN. IN CASE ON THE BASIS OF SUCH TARIFF ANY SUR PLUS IS LEFT WITH THE RVPN THEY GIVE CREDIT OF THE SAME TO THE ASSES SEE AS EVIDENT FROM THE EXTRACT OF THE MINUTES OF THE BOARD AND TH E COPY OF THE JOURNAL VOUCHER BY WHICH SUCH CREDIT IS GIVEN TO TH E ASSESSEE (PAPER BOOK 136-138). THUS WHEN NO INCOME IS PAID B Y ASSESSEE TO TRANSMISSION COMPANY THE QUESTION OF DEDUCTION O F TAX AT SOURCE DO NOT OTHERWISE ARISE EVEN WHEN UNDER CERTA IN SECTION OF CHAPTER XVII-B LIABILITY OF TDS IS ON PAYMENT OF AN Y SUM AND UNDER CERTAIN SECTIONS IT IS ON PAYMENT OF INCOME A S ULTIMATELY THE TAX IS ON THE INCOME AND DEDUCTION OF TAX AT SO URCE IS ONLY ONE OF THE MODES OF COLLECTION AND RECOVERY OF THE TAX. ON ACTUAL REIMBURSEMENT PROVISION OF DEDUCTION OF TAX AT SOU RCE WOULD NOT APPLY AS HELD IN CASE OF DR. WILLRNAR SCHWABE INDIA (F) LTD. (SUPRA) (PAPER BOOK 124-125) HEAD-NOTE OF WHICH RE ADS AS UNDER: AS AGREED BY AND BETWEEN THE ASSESSEE COMPANY AND ITCL A VEHICLE WAS TO BE PROVIDED BY THE ASSESSEE COMPANY TO THE SAID CONSULTANT FOR ATTENDING TO ITS WORK AND THUS THE ASSESSEE COMPANY WAS TO BEAR THE VEHI CLE EXPENSES ACTUALLY INCURRED BY THE SAID PARTY. BILLS FOR SUCH EXPENSES INCURRED BY THE SAID CONSULTANT WERE SEPAR ATELY RAISED BY THEM ON THE ASSESSEE COMPANY IN ADDITION TO BILLS FOR FEES PAYABLE ON ACCOUNT OF TECHNICAL SERV ICES AND SINCE THE AMOUNT OF BILLS SO RAISED WAS TOWARDS THE ACTUAL EXPENSES INCURRED BY THEM THERE WAS NO ELEMENT OF ANY PROFIT INVOLVED IN THE SAID BILLS. IT WAS THUS A CL EAR CASE OF REIMBURSEMENT OF ACTUAL EXPENSES INCURRED BY THE AS SESSEE ITA NOS.896 TO 903 & 904 TO 906/BANG/11 AND 908 913/BANG/12 PAGE 16 OF 18 AND THE SAME THEREFORE WAS NOT OF THE NATURE OF P AYMENT COVERED BY S 194J REQUIRING THE ASSESSEE TO DEDUC T TAX AT SOURCE THEREFROM. THE CBDT CIRCULAR NO. 715 DT. 8T H AUG. 1995 [(1995) 127 CTR (ST) 131 RELIED UPON BY THE A0 IN SUPPORT OF HIS CASE ON THIS ISSUE WAS APPLICA BLE ONLY IN THE CASES WHERE BILLS ARE RAISED FOR THE GROSS A MOUNT INCLUSIVE OF PROFESSIONAL FEES AS WELL AS REIMBURSE MENT OF ACTUAL EXPENSES AND THE SAME THEREFORE WAS NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE WHERE B ILLS WERE RAISED SEPARATELY BY THE CONSULTANTS FOR REIMBURSEM ENT OF ACTUAL EXPENSES INCURRED BY THEM. AS SUCH CONSIDER ING ALL THE FACTS OF THE CASE THE PROVISIONS OF SECTION 19 4J WERE NOT APPLICABLE TO THE REIMBURSEMENT OF ACTUAL EXPEN SES AND THE ASSESSEE COMPANY WAS NOT LIABLE TO DEDUCT T AX AT SOURCE FROM SUCH REIMBURSEMENT. UNDER THESE CIRCUMSTANCES WE HOLD THAT THE LOWER A UTHORITIES WERE NOT JUSTIFIED IN HOLDING THAT THE ASSESSEE IS LIABLE FOR DEDUCTION OF TAX AT SOURCE ON THE PAYMENT OF TRANSM ISSION /SLDC CHARGES TO RVPN. FROM THE RELEVANT PORTIONS OF THE TRIBUNAL DECISION IN THE CASE OF J.V.V.N.L. REPRODUCED (SUPRA) WE ARE OF THE OPINIO N THAT IT IS CLEAR THAT THE FACTS AND ISSUES ARE IDENTICAL TO TH E ASSESSEES CASE AND THAT THE DECISION THEREIN IS SQUARELY APPLICABL E TO THE ASSESSEES CASE. WE THEREFORE RESPECTFULLY FOLLOW ING THE DECISION OF THE JAIPUR BENCH OF ITAT IN THE CASE OF JVVNL (SUPRA) UPHOLD THE FINDING OF THE LEARNED CIT(A) T HAT THE ASSESSEE BESCOM WAS NOT LIABLE TO DEDUCT TAX AT SO URCE ON PAYMENTS OF TRANSMISSION CHARGES TO KPTCL AS THE PR OVISIONS OF SECTION 194J OF THE ACT ARE NOT ATTRACTED THEREON. 10. WITH REGARD TO SLDC CHARGES THE TRIBUNAL HELD AS FOLLOWS:- 8.3 WE HAVE HEARD BOTH PARTIES PERUSED THE MATER IAL ON RECORD AND THE JUDICIAL DECISIONS CITED. ADMITTEDLY THE SL DC IS A STATUTORY BODY CONSTITUTED BY THE STATE GOVERNMENT IN PURSUANCE TO THE MANDATE TO THE ELECTRICITY ACT 2003 AND IS AN INDEPENDENT BODY. THIS CONSTITUTION IS IN ACCORDANCE WITH SECTI ON 31(2) THEREOF AND THE FUNCTIONS TO BE PERFORMED ARE AS PE R SECTIONS 32 AND 32 VIZ. FOR OPTIMUM SCHEDULING AND DISPATCH OF ELECTRICITY WITHIN THE STATE. WHILE IT IS TRUE THAT IN THE RELE VANT PERIOD MANY OF ITS PERSONNEL MAY BE ON DEPUTATION FROM KPTCL A ND OTHER ORGANIZATIONS THEY WORK EXCLUSIVELY FOR SLDC. IT I S SEEN THAT ITA NOS.896 TO 903 & 904 TO 906/BANG/11 AND 908 913/BANG/12 PAGE 17 OF 18 THOUGH THE FUNCTIONS THESE PERSONNEL OF SLDC PERFOR M MAY BE OF MANAGERIAL AND TECHNICAL NATURE THE ASSESSEE B ESCOM OR ITS EMPLOYEES DO NOT RECEIVE OR DERIVE ANY BENEFIT IN T HEIR SPHERE OF WORK I.E. DISTRIBUTION AND RETAILING OF ELECTRICITY AND NEITHER DO THEY PERFORM ANY OF BESCOMS WORK. WHAT IS PAID BY BESCOM AS SLDC CHARGES ARE ONLY REIMBURSEMENT OF AC TUAL EXPENSES AS PER THE DIRECTION IN KARNATAKA GAZETTE NOTIFICATION ON 18.11.2004 AND THE SAME ARE IN ACCORDANCE WITH T HE PROCEDURE ADOPTED FOR ACCOUNTING OF CHARGES BY THE KPTCL CIRC ULARS DT.3.12.2005 AND 28.11.2005 SLDC CHARGES ARE NOT AC COUNTED AS KPTCLS INCOME. THE VERY SAME QUESTION/ISSUE OF WHE THER ON PAYMENT OF SLDC CHARGES THE ASSESSEE WAS LIABLE TO MAKE TDS IN ACCORDANCE WITH THE PROVISIONS OF SECTION 194J W AS BEFORE THE JAIPUR TRIBUNAL IN THE CASE OF JVVNL (SUPRA) AND TH E TRIBUNAL AFTER CONSIDERING THE ISSUE IN DETAIL HAS COME TO T HE FINDING IN PARA 9.10 OF ITS ORDER (REPRODUCED SUPRA) THAT THE PROVISIONS OF SECTION 194J WERE NOT APPLICABLE TO SLDC CHARGES PA ID AND THEREFORE NO DEDUCTION OF TAX WAS TO BE MADE THEREO N. WE FIND THAT THIS ISSUE IS DECIDED AND COVERED IN FAVOUR OF THE ASSESSEE- COMPANY BY THE DECISION OF THE ITAT JAIPUR BENCH I N THE CASE OF JVVNL (SUPRA) AND THEREFORE HOLD THAT ON SLDC CHARG ES PAID BY THE ASSESSEE NO DEDUCTION OF TAX IS TO BE MADE AT SOURCE AS THE PROVISIONS OF SECTION 194J ARE NOT ATTRACTED OR APP LICABLE. ACCORDINGLY THE IMPUGNED DEMAND RAISED U/S.201(1) R.W.S. 194J AND 201(1A) ARE CANCELLED. THE ASSESSEE GETS RELIEF ACCORDINGLY. 11. THE PARTIES AGREED BEFORE US THAT THE FACTS AND CIRCUMSTANCES AND THE BASIS OF THE CONCLUSIONS ARRIVED BY THE REVENUE AUTHORITIES ARE IDENTICAL IN THE CASES DECIDED BY THE TRIBUNAL AND THE PRESEN T APPEALS. IN THE CIRCUMSTANCES RESPECTFULLY FOLLOWING THE DECISION OF THE TRIBUNAL IN THE CASE OF BANGALORE ELECTRIC SUPPLY COMPANY LTD. SUPRA WE UPHOLD THE ORDER OF THE LD. CIT(A) SO FAR AS IT RELATES TO TRA NSMISSION CHARGES AND REVERSE THE ORDER OF THE LD. CIT(A) WITH REFERENCE TO SLDC CHARGES. IN VIEW OF THE ABOVE CONCLUSION THE ISSUES REGARDING LEVY OF INTEREST THE QUESTION WHETHER (SLDC) WAS GOVERNMENT WITHIN THE MEANING O F SECTION 196 OF THE ACT AND THE QUESTION WHETHER THE LIABILITY OF THE P ERSON MAKING PAYMENT WILL ITA NOS.896 TO 903 & 904 TO 906/BANG/11 AND 908 913/BANG/12 PAGE 18 OF 18 STAND EXTINGUISHED ON PAYMENT OF TAXES BY THE RECIP IENT OF THE PAYMENT AND THE QUESTION OF PERIOD OF LEVY OF INTEREST U/S. 201(1A) OF THE ACT DO NOT REQUIRE ANY CONSIDERATION. 12. IN THE RESULT ITA NOS.896 TO 903/BANG/11 ARE A LLOWED ITA NOS.904 TO 906/BANG/2011 ARE DISMISSED AND ITA NOS.908 TO 9 13/BANG/2012 ARE DISMISSED. PRONOUNCED IN THE OPEN COURT ON THIS 31 ST DAY OF JULY 2012. SD/- SD/- ( N. BARATHVAJA SANKAR ) ( N.V. VASU DEVAN ) VICE PRESIDENT JUDICIAL MEMB ER BANGALORE DATED THE 31 ST JULY 2012. DS/- COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ITAT BANGALORE. 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY ITAT BANGALORE.