Principal Commissioner of Income-tax, Jaipur-II, Jaipur v. Jaipur Vidyut Vitran Nigam Limited
[Citation -2017-LL-0912-18]

Citation 2017-LL-0912-18
Appellant Name Principal Commissioner of Income-tax, Jaipur-II, Jaipur
Respondent Name Jaipur Vidyut Vitran Nigam Limited
Court HIGH COURT OF RAJASTHAN
Relevant Act Income-tax
Date of Order 12/09/2017
Judgment View Judgment
Keyword Tags fees for technical services • hindu undivided family • agricultural income • suspense account • books of account • prescribed time • tds • contribution to provident fund • esi contribution • revenue expenditure
Bot Summary: 2.Whether on the facts and in the circumstances of the case and in law the ITAT has erred in holding that payment of Rs.2,81,23,73,125/- on account of transmission/wheeling/SLDC charges to RRVPN were not for technical services liable for making TDS under section 194J of the I.T. Act as such provisions of Section 40(ia) are not applicable. Where any sum referred to in sub-section is credited to any account, whether called Suspense account or by any other name, in the books of account of the person liable to pay such income, such crediting shall be deemed to be credit of such income to the account of the payee and the provisions of this section shall apply accordingly. ITA-67/2015 Where any sum is paid or credited for carrying out any work mentioned in sub-clause of clause of the Explanation, tax shall be deducted at source- on the invoice value excluding the value of material, if such value is mentioned separately in the invoice; or on the whole of the invoice value, if the value of material is not mentioned separately in the invoice. No individual or Hindu undivided family shall be liable to deduct income-tax on the sum credited or paid to the accountof the contractor where such sum is credited or paid exclusively for personal purposes of such individual or any member of Hindu undivided family. Learned counsel further relied upon decision in D.B. Income Tax Appeal No.278/2011 Commissioner of Income Tax, Jaipur-II, Jaipur vs. Jaipur Vidyut Vitran Nigam Ltd. Decided by Division Bench of this Court on 06.01.2014 wherein the issue was decided in favour of the assessee and against the department. Further the laws relied upon by the AR for the assessee are squarely applicable on it being identical issue, therefore we uphold the order of the learned CIT(A). All the issues are decided in favour of the assessee and against the department.


HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Income Tax Appeal No. 67 / 2015 PRINCIPAL COMMISSIONER OF INCOME TAX, JAIPUR-II ,JAIPUR Appellant Versus M/S. JAIPUR VIDYUT VITRAN NIGAM LIMITED, JANPATH, JYOTI NAGAR, PAN-AABCJ6373K Respondent For Appellant(s) : Mr. K.D. Mathur for Mr. R.B. Mathur For Respondent(s) : Mr. Gunjan Pathak HON'BLE MR. JUSTICE K.S. JHAVERI HON'BLE MR. JUSTICE VIJAY KUMAR VYAS Judgment 12/09/2017 1. By way of this this appeal, appellant has challenged judgment and order of Tribunal whereby Tribunal has dismissed appeal of department confirming order of CIT(A). 2. This Court while admitting appeal on 21.09.2015 framed following substantial questions of law: 1.Whether on facts and in circumstances of case and in law ITAT has erred in deleting addition of Rs.1,09,018/- made depositing employee s contribution to PF and ESI beyond prescribed time limit provided in respective Acts. 2.Whether on facts and in circumstances of case and in law ITAT has erred in holding that payment of Rs.2,81,23,73,125/- on account of transmission/wheeling/SLDC charges to RRVPN were not for technical services liable for making TDS under section 194J of I.T. Act as such provisions of Section 40 (a)(ia) are not applicable. (2 of 5) [ITA-67/2015] 3. Whether on facts and in circumstances of case and in law ITAT has erred in deleting addition of Rs.1,73,07,800/- on account of front end fees paid in HIDSCO for raising loan holding it to be revenue expenditure? 3. Learned counsel for respondent contended that issues No.1 and 2 are covered by decision of this Court passed on 19.10.2016, in D.B. Income Tax Appeal No.422/2011 Commissioner of Income Tax vs. Principal Officer JVVNL wherein Division Bench while considering matter observed as under:- Counsel for appellant relied on provisions of Section 194C and 194J which reads as under:- 194C (1) Any person responsible for paying any sum to any resident (hereafter in this section referred to as contractor) for carrying out any work (including supply of lobour for carrying out any work) in pursuance of contract between contractor and specified person shall at time of credit of such sum to account of contractor or at time of payment thereof in cash or by issue of cheque or graft or by any other mode, whichever is earlier, deduct amount equal to- (I) One per cent where payment is being made or credit is being given to individual or Hindu undivided family; (ii) two per cent where payment is being made or credit is being given to person other than individual or Hindu undivided family, of such sum as income-tax on income comprised therein. (2) Where any sum referred to in sub-section (1) is credited to any account, whether called Suspense account or by any other name, in books of account of person liable to pay such income, such crediting shall be deemed to be credit of such income to account of payee and provisions of this section shall apply accordingly. (3 of 5) [ITA-67/2015] (3) Where any sum is paid or credited for carrying out any work mentioned in sub-clause (e) of clause (iv) of Explanation, tax shall be deducted at source- (I) on invoice value excluding value of material, if such value is mentioned separately in invoice; or (ii) on whole of invoice value, if value of material is not mentioned separately in invoice. (4) No individual or Hindu undivided family shall be liable to deduct income-tax on sum credited or paid to accountof contractor where such sum is credited or paid exclusively for personal purposes of such individual or any member of Hindu undivided family. (5) No deduction shall be made from amount of any sum credited or paid or likely to be credited or paid to account of, or to, contractor, if such sum does not exceed [thirty] thousand rupees 194J. (1) Any person, not being individual or Hindu undivided family, who is responsible for paying to resident any sum by way of- (a) fees for professional services, or (b) fees for technical services, [or] [(ba) any remuneration or fees or commission by whatever name called, other than those on which tax is deductible under section 192, to director of company, or] (c) royalty, or (d) any sum referred to in clause (va) of section 28,] shall, at time of credit of such sum to account of payee or at time of payment thereof in cash or by issue of cheque or draft or by any other mode, whichever is earlier, deduct amount equal to [ten] percent of such sum as income-tax on income comprised therein. 3. assessee was bound to deduct TDS in lieu of services received by them and for services received by them was liable to pay tax within meaning of Explanation 2 to Section 9(1) (vii) of Act. (4 of 5) [ITA-67/2015] 4. However counsel for respondent Mr. Jhanwar contended that issue is concluded in view of following decisions: 1. Commission of Income Tax Vs. Bharti Cellular Ltd. (2011) 330 ITR 239 (SC), 2. Union of India Vs. Satish Panalal Shah (2001) 249 ITR 221 (SC), 3. Commissioner of Income Tax Vs. Jaipur Vidyut Vitran Nigam Ltd. D.B. ITA No. 579/2009, High Court of Judicature for Rajasthan, Jaipur 4. Commissioner of Income Tax Vs Bharti Cellular Ltd (2009) 319 ITR 139 (Del.) 5. Skycell communications Ltd. And Anr. Vs Deputy Commissioner of Income Tax and Ors. (2001) 251 ITR 53 (MAD.) 6. M.S. Jewellery Vs. Assistant Commissioner (ASSESSMENT) Agricultural Income Tax and Sales 7. CIT vs. Maharashtra State Electricity Distribution Co. Ltd., (2015) 119 DTR (BOM) 278, 8. Commissioner of Income Tax-II and Ors. Vs Delhi Transport Ltd. Manu/DE/2199/2015. 4. Learned counsel further relied upon decision in D.B. Income Tax Appeal No.278/2011 Commissioner of Income Tax, Jaipur-II, Jaipur vs. Jaipur Vidyut Vitran Nigam Ltd. Decided by Division Bench of this Court on 06.01.2014 wherein issue was decided in favour of assessee and against department. 5. Regarding third issue Tribunal in para 14 observed reads as under :- We have heard rival contentions of both parties and perusal material available on record. assessee has raised loan of Rs.300 crores for improvement in transmission, network and infrastructure. assessee paid this amount to HUDCO, which was pre-decided condition on loan sanctioned. learned CIT DR has not controverted findings by learned CIT(A) in his order. Further laws relied upon by AR for assessee are squarely applicable on it being identical issue, therefore we uphold order of learned CIT(A). (5 of 5) [ITA-67/2015] 6. Taking into consideration above we are of opinion that view taken by Tribunal is just and proper. No interference is called for. 7. All issues are decided in favour of assessee and against department. 8. However, it is made clear that issue No.1 will be subject to SLP. 9. appeal stands disposed of in above terms. (VIJAY KUMAR VYAS),J. (K.S. JHAVERI),J. Chouhan/80 Principal Commissioner of Income-tax, Jaipur-II, Jaipur v. Jaipur Vidyut Vitran Nigam Limited
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