D.b. Income Tax Appeal v. M/ S. Rajasthan Urban I Nfrastructure

{1} DB INCOME TAX APPEAL NO.235/2011 & THREE OTHER INCOME TAX APPEALS I N THE HI GH COURT OF JUDI CATURE FOR RAJASTHANBENCH AT JAI PUR JUDGMENT (1) D.B. INCOME TAX APPEAL NO.235/2011COMMI SSI ONER OF I NCOME TAX( TDS) , JAI PUR Vs.M/ s. RAJASTHAN URBAN I NFRASTRUCTURE WITH (2) D.B. INCOME TAX APPEAL NO.222/2011COMMI SSI ONER OF I NCOME TAX( TDS) , JAI PUR Vs.M/ s. RAJASTHAN URBAN I NFRASTRUCTUREWITH (3) D.B. INCOME TAX APPEAL NO.238/2011COMMI SSI ONER OF I NCOME TAX( TDS) , JAI PUR Vs. M/ s. RAJASTHAN URBAN I NFRASTRUCTURE & (4) D.B. INCOME TAX APPEAL NO.239/2011COMMI SSI ONER OF I NCOME TAX( TDS) , JAI PUR Vs.M/ s. RAJASTHAN URBAN I NFRASTRUCTURE DATE: 01. 07. 2013 HON'BLE MR. JUSTICE NARENDRA KUMAR JAINHON'BLE DR. JUSTICE SMT. MEENA V. GOMBER Ms. Par i ni t oo Jai n, f or t he appel l ant . * * * * Hear d t he l ear ned counsel f or appel l ant . 2.Si nce common f act s and l aw ar e i nvol ved i nt hese appeal s, t her ef or e, t hey wer e hear d t oget herand ar e bei ng di sposed of by t hi s common or der . 3.For conveni ence, t he f act s of D. B. I ncome TaxAppeal No. 235/ 2011 ar e bei ng t aken as l eadi ng f act s.The Assessi ng Of f i cer ,vi de i t s or der dat ed30. 01. 2009, r ai sed a demand of Rs. 1, 70, 881/ - al ong {2} DB INCOME TAX APPEAL NO.235/2011 & THREE OTHER INCOME TAX APPEALS wi t h i nt er est t her eon amount i ng t o Rs. 44, 776/ - , onaccount of TDS on t he amount pai d as ser vi ce t ax. Themat t er r el at es t o t he Fi nanci al Year 2005- 06. Theassessee pr ef er r ed an appeal , whi ch was al l owed byt he Commi ssi oner of I ncome Tax( Appeal s) - I I I , Jai pur( f or shor t ' t he Appel l at e Aut hor i t y' ) , set t i ng asi det he af or esai d demand. Bei ng aggr i eved wi t h t he same,t he Revenue pr ef er r ed an appeal bef or e t he I ncome TaxAppel l at e Tr i bunal , Jai pur Bench ' A' , Jai pur , but t hesame was di smi ssed. Hence, t he Revenue has pr ef er r edt hi s appeal .4.Submi ssi on oft he l ear ned counself orappel l ant i s t hat Appel l at e Aut hor i t y and I ncome TaxAppel l at e Tr i bunal ,bot h,have commi t t ed ani l l egal i t y i n r el yi ng upon t he Ci r cul ar dat ed28. 04. 2008, whi ch was i n r espect of Sect i on 194- I oft he I ncome Tax Act ( her ei naf t er r ef er r ed t o as ' t heAct ) , wher eas di sput e i n t he pr esent case was i nr espect of TDS, t o be deduct ed under Sect i on 194J oft he Act . I t was f ur t her ar gued t hat t he Ci r cul ardat ed 28. 04. 2008 was cl ar i f i ed by a subsequentCi r cul ar dat ed 30. 06. 2008, whi ch was wr ongl y hel d t obe i nappl i cabl e or cont r ar y t o l aw by t he Appel l at eAut hor i t y as wel l as Appel l at e Tr i bunal . She,t her ef or e, submi t t ed t hat or der s passed by t heAppel l at e Aut hor i t y as wel l as Appel l at e Tr i bunal ,ar e i l l egal and same ar e l i abl e t o be set asi de. {3} DB INCOME TAX APPEAL NO.235/2011 & THREE OTHER INCOME TAX APPEALS 5.We have consi der ed t he submi ssi ons of t hel ear ned counsel f or appel l ant and exami ned t heCi r cul ar s dat ed 28. 04. 2008 and 30. 06. 2008 and al sot he pr ovi si ons of Sect i ons 194- I and 194J and ot herpr ovi si ons of t he I ncome Tax Act . {3} DB INCOME TAX APPEAL NO.235/2011 & THREE OTHER INCOME TAX APPEALS 5.We have consi der ed t he submi ssi ons of t hel ear ned counsel f or appel l ant and exami ned t heCi r cul ar s dat ed 28. 04. 2008 and 30. 06. 2008 and al sot he pr ovi si ons of Sect i ons 194- I and 194J and ot herpr ovi si ons of t he I ncome Tax Act . 6.The assessee, Raj ast han Ur ban I nf r ast r uct ur eDevel opment Pr oj ect ( i n shor t ' RUI DP' ) , i s a pr oj ectof Gover nment of Raj ast han f or t he I nf r ast r uct ur eDevel opment and Ci vi c Ameni t i es i n t he speci f i edar eas/ ci t i es i n t he St at e of Raj ast han. The pr oj ecti s f i nanci al l y assi st ed by t he Loan f r om t he Asi anDevel opment Bank t hr ough t he Gover nment of I ndi a. Thepr oj ect i s wor ki ng under t he Ur ban Devel opmentDepar t ment of t he Gover nment of Raj ast han. Theaccount s ar e mai nt ai ned on cash basi s of account i ngand al so audi t ed by t he Char t er ed Account ant as pert he r equi r ement of t he Asi an Devel opment Bank andal so audi t ed by t he Depar t ment of Account ant Gener alof Raj ast han. The RUI DP appoi nt t he t echni cal andpr oj ect consul t ant s on open t ender basi s and t hel i mi t ed compani es as wel l as cor por at e consul t i ngf i r ms of r eput e ar e sel ect ed and appoi nt ed as per t hel ai d down pr ocedur e. The assessee deduct t he i ncome-t ax at sour ce f r om t he payment s made by i t anddeposi t t he same as per t he r el evant pr ovi si ons oft he I ncome Tax Act and t he r et ur n f or t he same i sf i l ed i n due t i me. I t appear s t hat mai n consul t ant sar e char gi ng t he ser vi ce t ax at t he pr evai l i ng r at es {4} DB INCOME TAX APPEAL NO.235/2011 & THREE OTHER INCOME TAX APPEALS on t he amount of f ee payabl e as per t he agr eement andt he same i s pai d by t he assessee/ RUI DP. The t ax i sdeduct ed on f ees and ot her payment s of expenses asbei ng par t of cont r act , however , no TDS has beendeduced on ser vi ce t ax i n vi ew of t he t er m ofcont r act . 7.The di sput e r el at es t o a poi nt as t o whet herTDS i s t o be deduct ed on t he amount payabl e onaccount of ser vi ce t ax or not ? The Tr i bunal hasconsi der ed t he agr eement and r ecor ded a f i ndi ng t hatas per t he t er m of cont r act , t he amount of ser vi cet ax was t o be pai d separ at el y, t her ef or e, t he samewas not subj ect t o TDS. The Appel l at e Aut hor i t ydeci ded t he appeal on t he basi s of r easoned or derdat ed 31. 03. 2009 passed i n Appeal No. 413/ Jai pur /2008- 09 of t he same assessee, whi ch i s t he subj ectmat t er of D. B. I ncome Tax Appeal No. 239/ 2011. Ther el evant par a 02. 3 of t he above r ef er r ed or der dat ed31. 03. 2009, passed by t he Appel l at e Aut hor i t y, i s r epr oduced as under : - r epr oduced as under : - " 02. 3 म�ने दोन� पािटर्य� के तक� का अवलोकन िकया एवंपाया िक माननीय सीबीडीटी के �प�ीकरण एफ नंबर275/ 73/ 2007- आईटी( बी) िदनांक 30. 06. 2008 के अनुसारतकनीकी एवं �यावसाियक गितिविधय� के बदले िकए जाने वाले, टीडीएसकुल भुगतान पर िजसम� सिवर्स टेक्स भी शािमल हैकी कटौती धारा 194 जे के तहत करनी चािहए। पर�तु यिद सेवा्ऺदाता एवं सेवा ्षिहता िनधार्िरितय� के बीच अनुबंध म� सेवा केबदले भुगतान की रािश का ही अनुबंध होता है तथा उस रािश, पर िनयमानुसार सिवर्स टेक्स देय होना माना जाता हैपर�तु, तो उससिवर्स टेक्स की रािश अनुबंध की रािश के अितिर्व होि�थित म� सिवर्स टेक्स को टीडीएस की कटौती योग्य नहीं मानाजा सकता । पर�तु यिद अनुबंध की कुल रािश म� सिवर्स टेक्सम�ने दोन� पािटर्य� के तक� का अवलोकन िकया एवंपाया िक माननीय सीबीडीटी के �प�ीकरण एफ नंबर275/ 73/ 2007- आईटी( बी) िदनांक 30. 06. 2008 के अनुसारतकनीकी एवं �यावसाियक गितिविधय� के बदले िकए जाने वाले, टीडीएसकुल भुगतान पर िजसम� सिवर्स टेक्स भी शािमल हैकी कटौती धारा 194 जे के तहत करनी चािहए। पर�तु यिद सेवा्ऺदाता एवं सेवा ्षिहता िनधार्िरितय� के बीच अनुबंध म� सेवा केबदले भुगतान की रािश का ही अनुबंध होता है तथा उस रािश, पर िनयमानुसार सिवर्स टेक्स देय होना माना जाता हैपर�तु, तो उससिवर्स टेक्स की रािश अनुबंध की रािश के अितिर्व होि�थित म� सिवर्स टेक्स को टीडीएस की कटौती योग्य नहीं मानाजा सकता । पर�तु यिद अनुबंध की कुल रािश म� सिवर्स टेक्स {5} DB INCOME TAX APPEAL NO.235/2011 & THREE OTHER INCOME TAX APPEALS भी शािमल है, तो उस ि�थित म� सिवर्स टेक्स को भी शािमलकरते हुए टीडीएस कटौती की जाने योग्य है । अपील की सुनवाईके दौरान िव. अ. ने िविभ�न पािटर्य� से िकए गए अनुबंध� की, ्ऺितयां पेश कीिजनके अवलोकन पर पाया िक सिवर्स टेक्स, अनुबंध की रािश म� शािमल नहीं हैबि�क अनुबंध की रािश के, टीडीएसअितिर्व सिवर्स टेक्स देय है । इसिलए सिवर्स टेक्स, की कटौती के योग्य नहीं हैबि�क अनुबंध की रािश टीडीएस: िन. अ. का दािय�व अपीलाथर् का है । अतके इस िनणर्य कोउिचत नहीं माना जाता हटाया जाता है । अपीलाथर् की अपील"इस मु�े पर �वीकार की जाती है । 8.The af or esai d f i ndi ng was di scussed andconsi der ed, i n det ai l , by t he I ncome Tax Appel l at eTr i bunal and vi de or der dat ed 30. 10. 2009, t heTr i bunal di smi ssed t he appeal of t he Depar t ment . Thesai d or der i s al so under chal l enge i n D. B. I ncome TaxAppeal No. 239/ 2011, pr ef er r ed on behal f of t heRevenue. 9.So f ar as submi ssi on of t he l ear ned counself or appel l ant , t hat t he Ci r cul ar dat ed 28. 04. 2008 wasnot appl i cabl e as i t was i n r espect of Sect i on 194- Iof t he Act r el at i ng t o r ent and not t echni cal f ees,t her ef or e, i t was wr ongl y r el i ed upon i s concer ned,we have consi der ed t he pr ovi si ons of Sect i on 194J oft he I ncome Tax Act , i n t he l i ght of Ci r cul ar s dat ed28. 04. 2008 and 30. 06. 2008. The wor ds, “ any sum pai d” ,used i n Sect i on 194J of t he Act , r el at e t o f ees f orpr of essi onalser vi ces,orf ees f ort echni calser vi ces. As per t he t er ms of agr eement , t he amountof ser vi ce t ax was t o be pai d separ at el y and was noti ncl uded i n t he f ees f or pr of essi onal ser vi ces orf ees f or t echni cal ser vi ces. I n t hese ci r cumst ances, {6} DB INCOME TAX APPEAL NO.235/2011 & THREE OTHER INCOME TAX APPEALS {6} DB INCOME TAX APPEAL NO.235/2011 & THREE OTHER INCOME TAX APPEALS we ar e sat i sf i ed t hat t he or der s passed by t heAppel l at e Aut hor i t y as wel las t he Appel l at eTr i bunal , ar e i n accor dance wi t h t he pr ovi si ons ofSect i on 194J of t he I ncome Tax Act . The ser vi ce t axwas t o be pai d separ at el y or not , i s pur el y aquest i on of f act and as per t he agr eement ent er ed i nt he pr esent case, i t was t o be pai d separ at el y andt her e i s a f i ndi ng of f act i n t hi s r egar d, r ecor dedby t he Appel l at e Aut hor i t y as wel l as t he Appel l at eTr i bunal al so. Even i f t he Ci r cul ar dat ed 28. 04. 2008,i s hel d t o be not appl i cabl e i n t he pr esent case, wef i nd t hat t he or der s passed by bot h t he aut hor i t i esbel ow, ar e i n accor dance wi t h t he pr ovi si ons ofSect i on 194J of t he I ncome Tax Act , l ooki ng t o t hef act s and ci r cumst ances of t he pr esent case.10.I n vi ew of above di scussi on, we f i nd t hat nosubst ant i al quest i ons of l aw ar e i nvol ved i n al lt hese appeal s. I t i s a set t l ed l aw t hat I ncome TaxAppeal bef or e t he Hi gh Cour t i s mai nt ai nabl e onl y ont he subst ant i al quest i ons of l aw, whi ch ar e noti nvol ved i n t he pr esent appeal s. 11.I n t hese ci r cumst ances, we f i nd no f or ce i nany of t he appeal s and t he same ar e, accor di ngl y,di smi ssed. 12.Regi st r y i s di r ect ed t o pl ace a copy of t hi sor der on r ecor d i n each connect ed f i l e. (DR.MEENA V. GOMBER),J. (NARENDRA KUMAR JAIN),J. / KKC/ {7} DB INCOME TAX APPEAL NO.235/2011 & THREE OTHER INCOME TAX APPEALS Certificate: All corrections made in the judgment/ order have been incorporated in thejudgment/ order being emailed. KAMLESH KUMARP.A.