Ita/76/2014 Of The Commissioner Of Income Tax v. The Executive Engineer

IN THR HIGH COURT OF KARNATAKADHARWAD BENCH DATED THIS THE 11 DAY OF AUGUST, 2015 PRESENT THE HON’BLE MR. SUBHRO KAMAL MUKHERJEE,THR ACTING CHIBF JUSTICE AND THR HON’BLE MR. JUSTICE ANAND BYRARBDDY Income Tax Appeal No. 75 of 2014 C/WIncome Tax Appeal Nos.76 of 2014, 77 of 2014, 78 of 2014,79 of 2014, 80 of 2014, 84 of 2014, 85 of 2014, 86 of 2014,88 of 2014, 89 of 2014, 91 of 2014, 98 of 2014 Income Tax Appeal No. 75 of 2014: Between: 1.The Commissioner of Income Tax,]Aayakar Bhavan,sedam Road,Gulbarga-585 105, 2.The Deputy Commissioner of Income Tax(TDS),Aayakar Bhavan,Staff Road, Fort,Bellary.Aayakar Bhavan,Staff Road, Fort,Bellary. ... Appellants (By Mr. Y.V Raviraj, Advocate) And : The Executive Engineer,O & M Division, (GESCOM), HOSPET. ... Respondent (By Mr. Anoop G Deshpande, Advocate) This Income Tax Appeal is filed under Section 260-A ofIncome Tax Act, 1961, for the assessment year 2006-07 praying to allow the appeal and set aside the orders passedby the Income Tax Appellate Tribunal, Bangalore in IncomeTax|AppealNo.917/Bang/2013dated:30/09/2013confirming the order of the Appellate Commissioner andconfirm the order passed by the Assistant Commissioner ofIncome Tax, TDS Circle, Bellary, Income Tax Appeal No./76 of 2014 Between : 1.The Commissioner of Income Tax,Aayakar Bhavan,sedam Road,Gulbarga-589 105,Aayakar Bhavan,sedam Road,Gulbarga-589 105, 2.The Assistant Commissioner of Income TaxTDS Circle,Aayakar Bhavan,staff Road, Fort,Bellary-583 102,... AppellantsTDS Circle,Aayakar Bhavan,staff Road, Fort,Bellary-583 102,... Appellants (By Mr. Y.V Raviraj, Advocate) And : The Executive Engineer,O & M Division, (GESCOM),HOSPET. ... Respondent (By Mr. : Anoop G Deshpande, Advocate) This Income Tax Appeal is filed under Section 260-A ofIncome Tax Act, 1961, for the assessment year 2009-2010praying to allow the appeal and set aside the orders passedby the Income Tax Appellate Tribunal, Bangalore in IncomeTax|AppealNo.|023/Bang/2013dated:|30.09.2013confirming the order of the Appellate Commissioner andconfirm the order passed by the Assistant Commissioner ofIncome Tax, TDS Circle, Bellary, Income Tax Appeal No.77/ of 2014: Between: 1.The Commissioner of Income Tax,Aayakar Bhavan,sedam Road, Gulbarga-985 105. 2.The Deputy Commissioner of Income Tax(TDS),Aayakar Bhavan,staif Road, Fort,Bellary.... AppellantsAayakar Bhavan,staif Road, Fort,Bellary.... Appellants (By Mr.Y.V Raviraj, Advocate) And: The Executive Engineer,O & M Division, (@ESCOM),HOSPET. ... Respondent (By Mr.Anoop G Deshpande, Advocate) This Income Tax Appeal is filed under Section 260-A ofIncome Tax Act, 1961, for the assessment year 2006-07praying to allow the appeal and set aside the orders passedby the Income Tax Appellate Tribunal, Bangalore in IncomeTax|AppealNo./64/Bang/2013|dated:30/09/2013confirming the order of the Appellate Commissioner andconfirm the order passed by the Assistant Commissioner ofIncome Tax, TDS Circle, Bellary, Income Tax Appeal No.78 of 2014: Between: 1.The Commissioner of Income Tax,Aayakar Bhavan,sedam Road,Gulbarga-589 105, 2.The Deputy Commissioner of Income Tax(TDS),Aayakar Bhavan,staff Road, Fort,Bellary.... AppellantsAayakar Bhavan,staff Road, Fort,Bellary.... Appellants (By Mr. Y.V Raviraj, Advocate) And :The Executive Engineer,O & M Division, (@ESCOM),HOSPET. ... Respondent (By Mr. Anoop G Deshpande, Advocate) This Income Tax Appeal is filed under Section 260-A ofIncome Tax Act, 1961, for the assessment year 2006-07praying to allow the appeal and set aside the orders passedby the Income Tax Appellate Tribunal, Bangalore in IncomeTax|AppealNo./60/Bang/2013|dated:30/09/2013confirming the order of the Appellate Commissioner andconfirm the order passed by the Assistant Commissioner ofIncome Tax, TDS Circle, Bellary, Income Tax Appeal No.79 of 2014: Between: 1.The Commissioner of Income Tax,Aayakar Bhavan,sedam Road,Gulbarga-585 105,Aayakar Bhavan,sedam Road,Gulbarga-585 105, (By Mr. Y.V Raviraj, Advocate) And :The Executive Engineer,O & M Division, (@ESCOM),HOSPET. ... Respondent (By Mr. Anoop G Deshpande, Advocate) This Income Tax Appeal is filed under Section 260-A ofIncome Tax Act, 1961, for the assessment year 2006-07praying to allow the appeal and set aside the orders passedby the Income Tax Appellate Tribunal, Bangalore in IncomeTax|AppealNo./60/Bang/2013|dated:30/09/2013confirming the order of the Appellate Commissioner andconfirm the order passed by the Assistant Commissioner ofIncome Tax, TDS Circle, Bellary, Income Tax Appeal No.79 of 2014: Between: 1.The Commissioner of Income Tax,Aayakar Bhavan,sedam Road,Gulbarga-585 105,Aayakar Bhavan,sedam Road,Gulbarga-585 105, 2.The Deputy Commissioner of Income Tax(TDS),Aayakar Bhavan,Staff Road, Fort,Bellary.Aayakar Bhavan,Staff Road, Fort,Bellary. ... Appellants (By Mr. Y.V Raviraj, Advocate) And :The Executive Engineer,O & M Division, (GESCOM),HOSPET. ... Respondent (By Mr. Anoop G Deshpande, Advocate) This Income Tax Appeal is filed under Section 260-A ofIncome Tax Act, 1961, for the assessment year 2007-08praying to allow the appeal and set aside the orders passedby the Income Tax Appellate Tribunal, Bangalore in IncomeTax|AppealNo./66/Bang/2013|dated:30/09/2013confirming the order of the Appellate Commissioner andconfirm the order passed by the Assistant Commissioner ofIncome Tax, TDS Circle, Bellary, Income Tax Appeal No.80 of 2014: Between: 1.The Commissioner of Income Tax,Aayakar Bhavan,sedam Road,Gulbarga-589 105,Aayakar Bhavan,sedam Road,Gulbarga-589 105, 2.The Deputy Commissioner of Income Tax(TDS),Aayakar Bhavan,Aayakar Bhavan, otaif Road, Fort, Bellary. ... Appellants (By Mr. Y.V Raviraj, Advocate) And : The Executive Engineer,O & M Division, (GESCOM),HOSPET. ... Respondent (By Mr. Anoop G Deshpande, Advocate) This Income Tax Appeal is filed under Section 260-A ofIncome Tax Act, 1961, for the assessment year 2007-08praying to allow the appeal and set aside the orders passedby the Income Tax Appellate Tribunal, Bangalore in IncomeTax|AppealNo./6/7/Bang/2013dated:30/09/2013confirming the order of the Appellate Commissioner andconfirm the order passed by the Assistant Commissioner ofIncome Tax, TDS Circle, Bellary, Income Tax Appeal No.84 of 2014: Between: 1.The Commissioner of Income Tax,Aayakar Bhavan,sedam Road,Gulbarga-589 105, 2.The Deputy Commissioner of Income Tax(TDS),Aayakar Bhavan,Aayakar Bhavan, otaif Road, Fort,Bellary.... Appellants (By Mr. Y.V Raviraj, Advocate) And: The Executive Engineer,O & M Division, (GESCOM),HOSPET. ... Respondent (By Mr. Anoop G Deshpande, Advocate) This Income Tax Appeal is filed under Section 260-A ofIncome Tax Act, 1961, for the assessment year 2005-06praying to allow the appeal and set aside the orders passedby the Income Tax Appellate Tribunal, Bangalore in IncomeTax|AppealNo./763/Bang/2013dated:30/09/2013confirming the order of the Appellate Commissioner andconfirm the order passed by the Assistant Commissioner ofIncome Tax, TDS Circle, Bellary, Income Tax Appeal No.8o9 of 2014 Between: 1.The Commissioner of Income Tax,Aayakar Bhavan,sedam Road,Gulbarga-585 105, 2.The Deputy Commissioner of Income Tax(TDS),Aayakar Bhavan,staff Road, Fort, Bellary.... Appellants (By Mr. Y.V Raviraj, Advocate) And :The Executive Engineer,O & M Division, (GESCOM),HOSPET. ... Respondent (By Mr. Anoop G Deshpande, Advocate) This Income Tax Appeal is filed under Section 260-A ofIncome Tax Act, 1961, for the assessment year 2006-07praying to allow the appeal and set aside the orders passedby the Income Tax Appellate Tribunal, Bangalore in IncomeTax|AppealNo.517/Bang/2013dated:30/09/2013confirming the order of the Appellate Commissioner andconfirm the order passed by the Assistant Commissioner ofIncome Tax, TDS Circle, Bellary, Income Tax Appeal No.86 of 2014: Between: 1.The Commissioner of Income Tax,Aayakar Bhavan,Sedam Road,Gulbarga-589 105,Aayakar Bhavan,Sedam Road,Gulbarga-589 105, (By Mr. Y.V Raviraj, Advocate) And :The Executive Engineer,O & M Division, (GESCOM),HOSPET. ... Respondent (By Mr. Anoop G Deshpande, Advocate) This Income Tax Appeal is filed under Section 260-A ofIncome Tax Act, 1961, for the assessment year 2006-07praying to allow the appeal and set aside the orders passedby the Income Tax Appellate Tribunal, Bangalore in IncomeTax|AppealNo.517/Bang/2013dated:30/09/2013confirming the order of the Appellate Commissioner andconfirm the order passed by the Assistant Commissioner ofIncome Tax, TDS Circle, Bellary, Income Tax Appeal No.86 of 2014: Between: 1.The Commissioner of Income Tax,Aayakar Bhavan,Sedam Road,Gulbarga-589 105,Aayakar Bhavan,Sedam Road,Gulbarga-589 105, 2.The Deputy Commissioner of Income Tax(TDS),Aayakar Bhavan,staff Road, Fort,Bellary.Aayakar Bhavan,staff Road, Fort,Bellary. ... Appellants (By Mr. Y.V Raviraj, Advocate) And : The Executive Engineer,O & M Division, (GESCOM),HOSPET. ... Respondent (By Mr. Anoop G Deshpande, Advocate) This Income Tax Appeal is filed under Section 260-A ofIncome Tax Act, 1961, for the assessment year 2007-08praying to allow the appeal and set aside the orders passedby the Income Tax Appellate Tribunal, Bangalore in IncomeTax|AppealNo.918/Bang/2013dated:30/09/2013confirming the order of the Appellate Commissioner andconfirm the order passed by the Assistant Commissioner ofIncome Tax, TDS Circle, Bellary, Income Tax Appeal No.88 of 2014: Between: 1.The Commissioner of Income Tax,Aayakar Bhavan,sedam Road,Gulbarga-589 105,Aayakar Bhavan,sedam Road,Gulbarga-589 105, 2.The Deputy Commissioner of Income Tax(TDS),Aayakar Bhavan,Aayakar Bhavan, otaif Road, Fort, Bellary. ... Appellants (By Mr. Y.V Raviraj, Advocate) And: The Executive Engineer,O & M Division, (GESCOM),HOSPET. ... Respondent (By Mr. Anoop G Deshpande, Advocate) This Income Tax Appeal is filed under Section 260-A ofIncome Tax Act, 1961, for the assessment year 2008-09praying to allow the appeal and set aside the orders passedby the Income Tax Appellate Tribunal, Bangalore in IncomeTax|AppealNo.520/Bang/2013|dated:30/09/2013confirming the order of the Appellate Commissioner andconfirm the order passed by the Assistant Commissioner ofIncome Tax, TDS Circle, Bellary, Income Tax Appeal No.89 of 2014: Between: 1.The Commissioner of Income Tax,Aayakar Bhavan,sedam Road,Gulbarga-589 105,Aayakar Bhavan,sedam Road,Gulbarga-589 105, 2.The Deputy Commissioner of Income Tax(TDS),Aayakar Bhavan,otaif Road, Fort, Bellary.... AppellantsAayakar Bhavan,otaif Road, Fort, Bellary.... Appellants (By Mr. Y.V Raviraj, Advocate) And : The Executive Engineer,O & M Division, (GESCOM),HOSPET. ... Respondent (By Mr. Anoop G Deshpande, Advocate) This Income Tax Appeal is filed under Section 260-A ofIncome Tax Act, 1961, for the assessment year 2008-09praying to allow the appeal and set aside the orders passedby the Income Tax Appellate Tribunal, Bangalore in IncomeTax|AppealNo.521/Bang/2013dated:30/09/2013confirming the order of the Appellate Commissioner andconfirm the order passed by the Assistant Commissioner ofIncome Tax, TDS Circle, Bellary, Income Tax Appeal No.91 of 2014: Between: 1.The Commissioner of Income Tax,Aayakar Bhavan,sedam Road,Gulbarga-585 105,Aayakar Bhavan,sedam Road,Gulbarga-585 105, 2.The Deputy Commissioner of Income Tax(TDS),Aayakar Bhavan,Staff Road, Fort,Bellary.Aayakar Bhavan,Staff Road, Fort,Bellary. ... Appellants (By Mr. Y.V Raviraj, Advocate) And : The Executive Engineer,O & M Division, (GESCOM),HOSPET. ... Respondent (By Mr. Anoop G Deshpande, Advocate) This Income Tax Appeal is filed under Section 260-A ofIncome Tax Act, 1961, for the assessment year 2009-2010praying to allow the appeal and set aside the orders passedby the Income Tax Appellate Tribunal, Bangalore in IncomeTax|AppealNo./771/Bang/2013dated:30/09/2013confirming the order of the Appellate Commissioner andconfirm the order passed by the Assistant Commissioner ofIncome Tax, TDS Circle, Bellary, Income Tax Appeal No.98 of 2014: 2.The Deputy Commissioner of Income Tax(TDS),Aayakar Bhavan,Staff Road, Fort,Bellary.Aayakar Bhavan,Staff Road, Fort,Bellary. ... Appellants (By Mr. Y.V Raviraj, Advocate) And : The Executive Engineer,O & M Division, (GESCOM),HOSPET. ... Respondent (By Mr. Anoop G Deshpande, Advocate) This Income Tax Appeal is filed under Section 260-A ofIncome Tax Act, 1961, for the assessment year 2009-2010praying to allow the appeal and set aside the orders passedby the Income Tax Appellate Tribunal, Bangalore in IncomeTax|AppealNo./771/Bang/2013dated:30/09/2013confirming the order of the Appellate Commissioner andconfirm the order passed by the Assistant Commissioner ofIncome Tax, TDS Circle, Bellary, Income Tax Appeal No.98 of 2014: Between: 1.The Commissioner of Income Tax,Aayakar Bhavan,sedam Road,Aayakar Bhavan,sedam Road, Gulbarga-585 105, 2.The Deputy Commissioner of Income Tax(TDS),Aayakar Bhavan,Aayakar Bhavan, otaif Road, Fort, Bellary.... Appellants (By Mr. Y.V Raviraj, Advocate) And : The Executive Engineer,O & M Division, (GESCOM),HOSPET. ... Respondent (By Mr. Anoop G Deshpande, Advocate) This Income Tax Appeal is filed under Section 260-A ofIncome Tax Act, 1961, for the assessment year 2005-06praying to allow the appeal and set aside the orders passedby the Income Tax Appellate Tribunal, Bangalore in IncomeTax|AppealNo./62/Bang/2013|dated:30/09/2013confirming the order of the Appellate Commissioner andconfirm the order passed by the Assistant Commissioner ofIncome Tax, TDS Circle, Bellary, These Income Tax Appeals coming on for Admission,this day, the Acting Chief Justice, delivered the following: JUDGMENT These appeals by the revenue are against thejudgment and order dated September 30, 2013, passed bythe Income-Tax Appellate Tribunal, C Bench, Bengaluru,affirming the order dated July 29, 2011, passed by theCommissioner of Income-tax (Appeals), Navanagar, Hubli. 2. We are informed that in all these thirteen appeals,similar questions of law and facts are involved. Therefore, byconsent of the parties, we take up all these appeals foranalogous hearing, 3. Gulbarga Electricity Supply Company Limited, theassessee in short, challenged demands of the jurisdictional Deputy Commissioner of Income-tax. Appeals were filedbefore the Commissioner of Income-tax (Appeals) and byorder dated July 29, 2011, the appeals were partly allowed.The revenue took the matter before the Income-tax AppellateTribunal, but the attempt of the revenue was abortive. 4. The first issue involved in these appeals is if on thepayment made against the supply of materials included incomposite contracts for executing Turn Key Projects,provisions under Section 194C of the Income-Tax Act, 1961(for short, ‘the Act’) would attract or not. Oo. The other issue is if payments made by theassessee to Bellary Computers and IT Solutions, Bellary,towards Bill Management Services are fees for professionaland technical services and, therefore, comes within thepurview of Section 194J of the Act or payments madetowards carrying out work come within the ambit of Section194C of the Act. 6. The Tribunal, in its detailed discussion, held thatthe issue regarding non-deduction/short deduction of taxdeducted at source on payments made on supply part ofcontracts awarded for execution of Turn Key Projects, has,already, been settled by the Jurisdictional High Court in thecase oftCommissioner of Income-tax and others vs. Karnataka Power TransmissionCorporation Limited,the respondent in ITA 337 of 2011.The issuewas decided by a Division Bench of this court on March 1o,2012. $§JIt is recorded that the decision of the coordinaBench is also binding on this Bench. 6. The Tribunal, in its detailed discussion, held thatthe issue regarding non-deduction/short deduction of taxdeducted at source on payments made on supply part ofcontracts awarded for execution of Turn Key Projects, has,already, been settled by the Jurisdictional High Court in thecase oftCommissioner of Income-tax and others vs. Karnataka Power TransmissionCorporation Limited,the respondent in ITA 337 of 2011.The issuewas decided by a Division Bench of this court on March 1o,2012. $§JIt is recorded that the decision of the coordinaBench is also binding on this Bench. 7. We are, also, of the opinion that the clauses of thecontract particularly, clause 3.5 of the contract agreement,make it clear that three separate contracts have beenentered into, but all the separate contracts were integralparts of a composite contract on single sale responsiblebasis. The invoices raised on the basis of the said composite}contract separately mentioning the value of the materialsupplied, no deduction is permissible under Section 194C ofthe Act. Section 194C of the Act cannot be pressed intoservice to deduct tax at source. The whole object ofintroduction of that Section is to deduct tax in respect ofpayments made for works contract. No division is, therefore,]permissible in respect of a contract for supply of materialsfor carrying out the work. It is in a case of distinctcontracts. The contract for supply of material being alseparate and distinct contract, no division is permissibleunder Section 194C of the Act. Section 194C has suffered!an amendment also with effect from October 1, 2009 and theprovision has been made very clear without any ambiguity. 8. Thus, we can conclude safely that if a personexecuting the work, purchases the materials from a personother than the customer, the same would not fall within thedefinition ot ‘work’ under Section 194C of the Act. 9. Now, we shall deal with the second issue. If theprovisions of Section 194J or Section 194C would apply inrespect of payments made by an assessee towards BillManagement Services. The services rendered by theagencies engaged by the assessees at Hospet, Bellary andRaichur are not professional services, and, therefore, Section194J is not attracted. The demand towards the alleged shortdeduction of tax deducted at source and interest, therefore,was improper. The contract was rightly held to be a servicecontract by the Tribunal and we, also, feel that it was acontract, which should be covered under Section 194C of theAct. 10. We do not find that these appeals involve anysubstantial question of law, which requires consideration bythis court. Therefore, all these appeals are dismissed.| �����3#�&$514#,�$5#�3!2#8#5�945# 1#9�1!�;#$5�13#455#,&# 148#� !,1,� ��+=�������������������� ���+=����� �8